MEL - Meridian Energy

[Louloubell]

Does todays finish point to a pleasant surprise tomorrow?

[Master98]

Does todays finish point to a pleasant surprise tomorrow?

maybe cash bonus from Australia business sale?

[Sideshow Bob]

Nope, no special.


Meridian Energy Limited 2022 Interim Results - NZX, New Zealand’s Exchange

Meridian Energy has reported net profit after tax of $145 million from continuing operations for the six months ended 31 December 2021, $82 million (36%) lower than the same period last year, mainly reflecting negative changes in the value of hedge instruments. Excluding these hedge value movements, Meridian reported a $1 million decrease in EBITDAF1 and a $5 million decrease in underlying net profit after tax2.

Meridian’s Board has declared an interim ordinary dividend of 5.85 cents per share, 2.6% higher than for the same period last year. The company’s Dividend Reinvestment Plan will apply to this year’s interim dividend, at no discount to the average market price over a five-day period ending on 23 March 2022. The interim dividend will be paid, and new shares issued under the reinvestment plan on 8 April 2022.

Meridian’s Chief Executive Neal Barclay says that operating performance in the first half of this financial year includes a reduction in revenue received from the Tiwai Point Aluminium Smelter, so the on-par performance with last year reflects continued strong momentum in the company’s operating business.“It’s pleasing to see continued growth in retail sales, which reflects an enduring commitment to excellent customer service and support.

Our retail performance has helped offset the impact of NZAS exit pricing, and we’re making sound progress on our strategy to develop new sources of South Island demand following the Tiwai contract end in 2024,” Mr Barclay says.Meridian completed the sale of MEA (which includes Powershop Australia) on 31 January 2022. The final sale price was A$740 million including interest and intercompany funding movements since 1 July 2021.

With completion of the MEA sale having occurred on 31 January 2022, Meridian’s investment in MEA has been classified as held for sale and a discontinued operation at 31 December 2021. Meridian expects to recognise a gain on sale in the order of $240 million in its full year accounts for 2022. “This transaction is an outstanding result for Meridian’s shareholders and a testament to the quality of the Meridian Energy Australia business and the employees who have been dedicated to its success,” says Mr Barclay.

Meridian has commenced bulk earthworks at its Harapaki wind farm development in Hawke’s Bay and has been actively working to increase its renewable development pipeline. This includes the company’s November 2021 announcement of the development of Ruākākā Energy Park.

This project will house a battery energy storage system (BESS) at least 100MW in capacity, as well as a utilityscale solar farm.F

our potential partners have been selected for the next phase of the Southern Green Hydrogen project, a joint venture between Meridian Energy and Contact Energy to investigate the feasibility of developing the world’s first large-scale green hydrogen plant in Southland.A process is now underway to assess proposals from each of the four counterparties to develop the production and export facility in Southland.

“We’re excited to move forward with the RFP and bring the project closer to fruition,” adds Mr Barclay.The electricity sector has been the focus of a number of regulatory reviews, including the Electricity Authority’s Wholesale Market Review and reviews of the 9 August 2021 power outages.

“While we have some concerns with some of the preliminary findings from the Electricity Authority’s most recent Wholesale Market Review, there is no doubt that as an industry we need to move faster to help New Zealand achieve its climate goals. We always support ways that the sector can provide better outcomes to consumers, and we’re committed to working with the sector, businesses, government, and consumers to ensure we achieve these goals

[Master98]

Nope, no special.

Last few days good run seems market too optimistic about today's results.

[Dlownz]

Nothing stands out as impressive in this one. Guess they have to wait till 2025 and they put the price up on tiwai

[Marilyn Munroe]

Aluminium is often refered to as electricity in solid form.

The price of aluminium is going gang busters, and could go even higher if aluminium sanctions are placed on Czar Putin.

Rio Tinto know the intimidation they used on the Government and Meridian last time won't work in the future. This hopefully will mean more jingling in Meridians cash register.

Boop boop de do
Marilyn

[buy_high_sell_lo]

Hello everyone, from my stance looking at the report I can get the following take away.
Retail, wholesale and commercial businesses are growing which is a positive however the poorer margins from the NZAS has been weighing overall topline, cashflow and EBITDAF1 down.
This is somewhat expected however with aluminum prices rising there is an opportunity to improve the energy margins going forward.

What I am hoping someone would help me with is understand is whether or not there is any material impact of the drop in the value of hedge instruments?
Please see from above report
"Meridian Energy has reported net profit after tax of $145 million from continuing operations for the six months ended 31 December 2021, $82 million (36%) lower than the same period last year, mainly reflecting negative changes in the value of hedge instruments."

When I look at the income statement I can see the main culprit is:
Net change in fair value of energy hedges - (68) vs previous period 73

Going into the notes under D1 I have found that they are a combination of:
1. Total Treasury Hedges - Assets 82 vs previous period Assets 88
2. Foreign Exchange hedges and swaps - Assets 24 Liabilities (84) vs previous period Assets 24 Liabilities (207)
3. Energy Hedges - Assets 256 Liabilities (52) vs previous period Assets 194 Liabilities (64)

Net Position Assets 362 Liabilities (136) vs previous period Assets 306 Liabilities (271)

Unfortunately I was not able to make sense of the notes enough to make this section balance the income statement...
However going back to my initial question, does this have any material impact on the actual profitability of the business?
Also if anyone would like to assist in making this balance I would very much appreciate it.

[dreamcatcher]

Thanks Meridian & NZ for helping us achieve this profit..........

"Rio Tinto has reported its best-ever annual profit and a record full-year dividend of US$16.8bn"

[stoploss]

Thanks Meridian & NZ for helping us achieve this profit..........

"Rio Tinto has reported its best-ever annual profit and a record full-year dividend of US$16.8bn"

I can't understand why they didn't link the price Rio paid for electricity to the price of Aluminium on the spot market.
They complained about the low prices and it not being viable for them to operate . MEL look like they wrote a one way deal , very poor for shareholders.

[Cyclical]

I can't understand why they didn't link the price Rio paid for electricity to the price of Aluminium on the spot market.
They complained about the low prices and it not being viable for them to operate . MEL look like they wrote a one way deal , very poor for shareholders.

NZ Inc. is pretty good at that tbf...push overs.