Meridian Energy (MEL) H2 2025 earnings summary

Executive summary

• FY 2025 was marked by two unprecedented 1-in-90-year droughts, low wind, and declining gas availability, resulting in the lowest earnings in a decade and the lowest hydro generation since 2013.

• Despite these challenges, customer supply was maintained, customer connections grew 10% year-over-year to over 405,000, and a stable dividend of NZD 0.21 per share was declared, supported by drawing on over NZD 300 million of debt headroom.

• Major renewable projects were delivered, including the NZD 450 million Harapaki Wind Farm and NZD 186 million Ruakākā Battery, with five new consents obtained for future developments.

• Strategic progress included retail business transformation, increased asset capacity, and two acquisitions.

• The business remains focused on accelerating renewable generation, enhancing customer offerings, and investing in digital transformation.

Financial highlights

• Operating cash flows fell 52% year-over-year to NZD 318 million, the lowest since 2009.

• EBITDA/EBITDAF dropped 32% to NZD 611 million, driven by a NZD 294 million fall in energy margin.

• Net profit after tax fell by NZD 881 million, with a statutory loss of NZD 452 million, mainly due to a NZD 1.247 billion fair value loss on energy hedges.

• Underlying NPAT was NZD 56 million, down from NZD 359 million in FY24.

• Net debt increased 18% to NZD 1.505 billion; net debt to EBITDA/EBITDAF ratio rose to 2.5x.

Outlook and guidance

• FY 2026 OpEx is guided at NZD 311–316 million, up to 9% higher, mainly due to investment in retail platform transformation and expected incentive payments.

• CapEx for FY 2026 is forecast at NZD 330–360 million, with $230M–$250M for growth and $100M–$110M for stay-in-business, driven by completion of Ruakākā Solar Farm and ongoing asset maintenance.

• A NZD 300 million green bond issue is under consideration to support strategic investment.

• The business targets NZD 2 billion in capital spend over the next three years and NZD 3 billion by 2030 for growth projects.

• Key targets include construction of three new generation projects and 27,000 new customer connections.