Meridian Energy (MEL) H2 2024 earnings summary

Executive summary

• Achieved record operating cash flow of $667 million and EBITDAF of $905 million for FY24, driven by strong retail performance, higher prices, and timely hydro inflows.

• Net profit after tax surged to $429 million, supported by $249 million in net gains on hedge instruments.

• Delivered the Harapaki Wind Farm on time and budget, adding 176MW capacity, with early yields exceeding expectations.

• Secured a 20-year contract with NZAS, providing sector certainty and enabling a reset of dividend policy and renewable investment plans.

• Paused the Southern Green Hydrogen project due to global inflationary pressures and unfavorable economics.

Financial highlights

• EBITDAF increased 16% year-over-year to $905 million, primarily from higher energy margins and retail growth.

• Net profit after tax was $429 million, up from $95 million, with underlying net profit after tax at $359 million.

• Operating cash flow up 31% to $667 million, and energy margin increased to $1,276 million.

• Full-year dividend lifted 25% to 21.00 cents per share, with a 2% discount on the dividend reinvestment plan.

• Net debt increased due to a $300 million green bond issuance, but net debt to EBITDAF improved to 1.4x, supporting BBB+ credit rating.

Outlook and guidance

• FY25 operating cost guidance: $302–308 million; capex: $295–325 million.

• Challenging start to FY25 with record dry winter, low hydro storage, and ongoing gas shortages; hedging and demand response to manage volatility.

• Focus for FY25 includes progressing development projects, transformer replacements, and enhancing digital and operational capabilities.

• Stay-in-business CapEx to remain elevated through 2026 due to major system upgrades, then revert to historical levels by 2027–2028.

• Targeting delivery of 7 renewable projects by 2030, with $3 billion in new generation investment planned.