Meridian Energy (MEL) H1 2025 earnings summary

Executive summary

• The six months to 31 December 2024 saw a net loss after tax of $121 million, compared to a $191 million profit in the prior year, driven by record low hydro inflows, severe weather, and gas shortages, which led to high hedge costs and operational headwinds.

• EBITDAF dropped 42% to $257 million from $443 million year-over-year, reflecting lower hydro generation, higher supply and hedge costs, and negative fair value hedge movements.

• Operating cash flows fell to $50 million from $303 million, and total comprehensive loss was $120 million, down from $186 million income year-over-year.

• Despite challenging conditions, strategic progress continued with significant renewable project consents, retail transformation, and leadership transition underway.

• Interim dividend maintained at 6.15 cents per share, imputed at 85%, with a 2% discount for the dividend reinvestment plan.

Financial highlights

• Operating revenue increased to $2,255 million from $2,111 million year-over-year, but EBITDAF fell to $257 million from $443 million.

• Net profit after tax was -$121 million, with underlying NPAT at -$5 million, and earnings per share fell to a loss of 4.7 cents.

• Net cash from operating activities decreased to $50 million from $303 million.

• Energy margin dropped to $444 million from $629 million, mainly due to weather-driven demand response and swaption costs.

• Net change in fair value of energy hedges was a $143 million loss, compared to an $11 million gain last year.

Outlook and guidance

• FY25 operating cost guidance revised to $298–$304 million, and CapEx lowered to $220–$250 million due to project delays.

• Over $1 billion of CapEx expected to be committed to new developments in 2024.

• Additional hedge and demand response costs of $25 million+ expected in Q3 FY25.

• Board remains focused on providing appropriate shareholder returns while maintaining a robust capital structure.

• Focused on managing risks to winter 2025 security, including new agreements for demand reduction and advocating for hydro storage rule changes.