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Meridian Energy is New Zealand's largest owner of hydro and wind generation assets.

KIRK HARGREAVES/Stuff

Meridian Energy is New Zealand’s largest proprietor of hydro and wind technology property.

Meridian Energy reported a 27 per cent fall in underlying full-year profit as drought situations dented hydro technology and it was hurt by a less expensive energy contract with the Tiwai Point aluminium smelter.

Underlying profit fell to $232 million within the 12 months ended June 30, from $316m the earlier 12 months. Net profit, which incorporates modifications within the worth of electrical energy hedges, rose 145 per cent to $428m.

Meridian, New Zealand’s largest electrical energy generator, suffered difficult drought situations by a lot of the second half of its monetary 12 months, with influx into its hydro catchments the third lowest on document between November 2020 and April 2021.

The firm was additionally impacted by a less expensive energy contract it struck with the aluminium smelter in January to allow the plant to maintain working till the top of 2024.

READ MORE:
* Commerce Commission enquires over hedging agreement between Meridian and Contact
* Aluminium smelter issues assurance over clean-up after Government shelves talks
* Meridian suggests fresh Government talks on smelter under way as it contemplates $1.3b write-down

“We certainly experienced some challenges,” mentioned chief govt Neal Barclay.

“Drought conditions during the second half of the financial year dampened our cash earnings by reducing generation and increasing hedge costs but that is just part and parcel of being a hydro generation company in New Zealand.

“Also, the price we negotiated with the owners of Tiwai Point Aluminium Smelter to extend operations to 2024 reduced during the second half of the year.”

Whilst each occasions have been vital and impacted monetary efficiency, the underlying drivers of future enterprise worth remained sturdy, he mentioned.

Meridian is New Zealand’s largest proprietor of hydro and wind technology property.

The previous two years the corporate has reported document outcomes from sturdy technology and rising retail gross sales volumes. In the newest 12 months, retail volumes have been up 14 per cent, it mentioned.

Meridian, which is 51 per cent owned by the federal government, pays a ultimate dividend of 11.2 cents a share, unchanged from the earlier 12 months.

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