MCY Mercury NZ ( MRP Mighty River Power)

[Norwest]

Operating earnings, (EBITDAF) of $494 million were down $12 million on the prior year – a strong result given the 2020 financial year was the first full year without earnings from the Metrix smart metering business which was sold in FY2019.

MCY previously announced that the annualised reduction to EBITDAF from the sale of Metrix was forecast to be $28m. Thus if we extrapolate this previously announced reduction, we can assume that same year on year EFBITDAF is actually up $16 million - is there anything else material that would have affected EBITDAF ?

I still think it's well overpriced at present, especially now its $5.09 at time of me posting this.

[bull....]

MCY previously announced that the annualised reduction to EBITDAF from the sale of Metrix was forecast to be $28m. Thus if we extrapolate this previously announced reduction, we can assume that same year on year EFBITDAF is actually up $16 million - is there anything else material that would have affected EBITDAF ?

I still think it's well overpriced at present, especially now its $5.09 at time of me posting this.

in your valuation you need to factor in that rates are going even lower next year ( the risk free rate) , also mcy has just proved they have stable earnings in a bad year which even looks like next year could be better.
Even if you find them overvalued just remember as rates go even lower there are not many places to park money with stable dividend returns at the moment.
dyor

[King1212]

MCY previously announced that the annualised reduction to EBITDAF from the sale of Metrix was forecast to be $28m. Thus if we extrapolate this previously announced reduction, we can assume that same year on year EFBITDAF is actually up $16 million - is there anything else material that would have affected EBITDAF ?

I still think it's well overpriced at present, especially now its $5.09 at time of me posting this.

If u are looking for yield,,,,it is better off with GNE...with recent Kupe upgrade...yield at 6-7 persen.

[bull....]

If u are looking for yield,,,,it is better off with GNE...with recent Kupe upgrade...yield at 6-7 persen.

gne will be adversly affected by smelter closure more than mcy. also some huntly units are nearing there end of life. mcy is much better proposition for ongoing div

[King1212]

Near end of life..mmmm like tomorrow?

[tango]

I can’t work out how to ask questions on the webcast of the AGM. I wanted to ask about the proposed pumped hydro at Lake Onslow and get Mercury’s take on the feasibility of it and the impact on their business.
Is anyone on the call able to propose this question???
TIA

[tango]

Did anyone else listen to the analyst briefing that mercury put on this morning? It was very interesting. I just wish I had been able to ask that question. I didn’t have a phone number to call to do the *1 to ask about Lake Onslow

[Norwest]

Tango you had to be on the Teleconference to ask questions, not on the webinar. Sorry I didn't your question until after it ended.
It was however talked about "pumped storage either in South Island or the North Island" i.e. maybe they think there are options, not just Lake Onslow.

Slides from Teleconference:
https://issuu.com/mercurynz/docs/mer...r=sMWQ4Mjk3MDI

$55M capital return from Tilt in July 2020
Potential for further de-industrialization e.g. NZ Steel/NZ Refining. note: no mention of Tiwai as a potential, implying a done deal?

My notes I took:

Vince:
Company transitioned well as part of Covid-19, challenges regarding wind farm construction and drilling at geothermal's, all back up and running as per normal now.
Really Strong Result in Challenging conditions.
Utilize Waikato River as NZ's best peaking station - he said this twice.
Judicious use of the Lake Taupo Battery.
In the post Tiwai world, we have to be careful that we (assuming NZ inc.) don't end up a series of major investments to shift generation around that doesn't benefit the common user. (Answer to question from Jarden) - Obvious benefits MCY for this to not happen or be delayed, so no surprise with this comment.

William:
"... as we deal with the exit of Tiwai" - Even though William has a dulcet tone, that comment just rolled off his Tounge, to me that implies MCY think its a done deal.
Lake Taupo is only 600GWH storage which is quite small compared to some of the South Island Lakes.
8,000 Farm Source customer loss was a deliberate decision.
Electricity Market Supply/Balance back in place by FY25 (Answer to Question from Forsyth Barr)

[bull....]

Tango you had to be on the Teleconference to ask questions, not on the webinar. Sorry I didn't your question until after it ended.
It was however talked about "pumped storage either in South Island or the North Island" i.e. maybe they think there are options, not just Lake Onslow.

Slides from Teleconference:
https://issuu.com/mercurynz/docs/mer...r=sMWQ4Mjk3MDI

$55M capital return from Tilt in July 2020
Potential for further de-industrialization e.g. NZ Steel/NZ Refining. note: no mention of Tiwai as a potential, implying a done deal?

My notes I took:

Vince:
Company transitioned well as part of Covid-19, challenges regarding wind farm construction and drilling at geothermal's, all back up and running as per normal now.
Really Strong Result in Challenging conditions.
Utilize Waikato River as NZ's best peaking station - he said this twice.
Judicious use of the Lake Taupo Battery.
In the post Tiwai world, we have to be careful that we (assuming NZ inc.) don't end up a series of major investments to shift generation around that doesn't benefit the common user. (Answer to question from Jarden) - Obvious benefits MCY for this to not happen or be delayed, so no surprise with this comment.

William:
"... as we deal with the exit of Tiwai" - Even though William has a dulcet tone, that comment just rolled off his Tounge, to me that implies MCY think its a done deal.
Lake Taupo is only 600GWH storage which is quite small compared to some of the South Island Lakes.
8,000 Farm Source customer loss was a deliberate decision.
Electricity Market Supply/Balance back in place by FY25 (Answer to Question from Forsyth Barr)

that was my thinking no material affect even if smelter closes to long term supply/balance in the market. interesting about your smelter comments gne head didnt think smelter would close either

[tango]

Tango you had to be on the Teleconference to ask questions, not on the webinar. Sorry I didn't your question until after it ended.
It was however talked about "pumped storage either in South Island or the North Island" i.e. maybe they think there are options, not just Lake Onslow.

Slides from Teleconference:
https://issuu.com/mercurynz/docs/mer...r=sMWQ4Mjk3MDI

$55M capital return from Tilt in July 2020
Potential for further de-industrialization e.g. NZ Steel/NZ Refining. note: no mention of Tiwai as a potential, implying a done deal?

My notes I took:

Vince:
Company transitioned well as part of Covid-19, challenges regarding wind farm construction and drilling at geothermal's, all back up and running as per normal now.
Really Strong Result in Challenging conditions.
Utilize Waikato River as NZ's best peaking station - he said this twice.
Judicious use of the Lake Taupo Battery.
In the post Tiwai world, we have to be careful that we (assuming NZ inc.) don't end up a series of major investments to shift generation around that doesn't benefit the common user. (Answer to question from Jarden) - Obvious benefits MCY for this to not happen or be delayed, so no surprise with this comment.

William:
"... as we deal with the exit of Tiwai" - Even though William has a dulcet tone, that comment just rolled off his Tounge, to me that implies MCY think its a done deal.
Lake Taupo is only 600GWH storage which is quite small compared to some of the South Island Lakes.
8,000 Farm Source customer loss was a deliberate decision.
Electricity Market Supply/Balance back in place by FY25 (Answer to Question from Forsyth Barr)

Thank you so much for the notes. I did miss part of the webcast so it may have been discussed when I was out of the room. I love having access to these updates. I learned a lot.

Yes, I got the same impression about the NZAS being a done deal. Also, the fact that they aren’t part of the discussion and that they didn’t see any value in being part of it. Obviously, they are less affected, but still…

It was interesting to see the breakdown of users and to see how big a user the dairy industry is, particularly as there is a possibility that Fonterra could switch to electricity for their milk drying plants. That could increase electricity usage considerably and be a partial replacement for Tiwai. That would appear to be a much better use of their time and resources then chasing an extension to the Tiiwai point contract.

I was pleased to hear mercury being so positive about tilt technology, as I hold shares in that company too. Unfortunately tilt technology and Serko are both holding their meetings at the same time so I can’t watch both web casts!