Electricity pylon. Photo: AFP
Mercury Energy reported a strong lift in underlying profit for the first half, reflecting the bigger business after its takeover of Trustpower's retail operations.
Key numbers for the six months ended December compared with a year ago:
- Net profit $230m vs $427m
- Revenue $1.3b vs $873m
- Underlying profit $451m vs $242m
- Generation (GWh) 4817 vs 3745 gigawatt hours
- Interim dividend 8.7 cents per share vs 8 cps
Net profit fell $197 million, reflecting the previous period's one-off gain made from the sale of the company's 19.9 percent Tilt Renewables shareholding.
Underlying profit was up $209m, largely due to the acquisition of Trustpower's retail business.
The company also acquired the outstanding shares in the broadband company Now NZ in December 2022.
"Mercury is a much larger business than it was this time last year, and it shows strongly in our result. We added 440,000 more connections from those two transactions alone," chief executive Vince Hawkswarth said.
The previous period's underlying profit was also affected by the early exit of a foundation hedge with Norske Skog.
Hawksworth said wet weather defined the period, compared to a dry 2022.
Hydro production was up 852 gigawatt hours to 2735 GWh after Lake Taupō experienced its highest ever inflows for the July to December period.
Wind production was also up, which reflected a full six months of generation across Mercury's wind farms, including the newly commissioned Turitea North farm.
Mercury said generating assets largely escaped damage from recent severe weather.
Its chair Prue Flacks said resilience of critical infrastructure should be one of New Zealand's biggest priorities.
"We know that weather events will become increasingly severe, and we need to adapt," Flacks said.
The result came in a high cost of living environment, Flacks said.
Mercury said last year mass market customers' prices increased by an average of 2 percent across lines and energy, and would be limited to between 3 and 5 percent for the coming year.
"This is despite costs to our business increasing over and above this, which we are absorbing on behalf of our customers," she said.
Mercury would also delay price changes for at least six months for those adversely affected by recent weather, in addition to targeted support.
Mercury's full year underlying profit guidance remained unchanged at $795m, with an increase on the previous year expected due to the forecast lift in hydro production.
