Meridian Energy (MEL) Q1 2025 earnings summary

Executive summary

• Severe winter drought led to record low hydro storage, but late August and September brought abundant precipitation, raising national storage to 115% of average and reversing drought conditions.

• Retail customer connections increased by over 8,000 in the quarter, with a 2.2% year-over-year rise, and average retail sales prices rose 8.5%.

• Retail sales volumes and total generation declined year-over-year, with residential and large business segments up, but agricultural and corporate segments down.

• Demand response agreement with NZAS reduced system demand by 3% year-over-year, supporting system security.

• National electricity demand in September 2024 was 5.2% lower year-over-year.

Financial highlights

• Quarterly wind generation volume increased 40% due to full commissioning of Harapaki Wind Farm.

• Q1 total inflows were 147% of historical average, 30% higher than Q1 last year.

• Generation for Q1 was 15% lower year-over-year, but the average price received was 157.3% higher.

• Operating costs rose 16.6% year-over-year, in line with full-year guidance of NZD 302–308 million, slightly elevated by provisions for retail business changes.

• Q1 capital expenditure was $46m, down 28.1% year-over-year, with guidance for the year at NZD 295–325 million including battery and solar projects.

Outlook and guidance

• Spring outlook forecasts above-average temperatures and normal to above-normal rainfall, with a 50–70% chance of La Niña developing by late spring or December.

• Retail business reset underway, expected to reduce headcount and introduce new customer products and services.

• CapEx forecasts may be revisited due to appeal on Ruakaka solar project consent.