Meridian Energy (MEL) H1 2025 earnings summary

Executive summary

• Interim results for the six months to 31 December 2024 were significantly impacted by record low hydro inflows, extreme weather, and a rapid decline in gas availability, resulting in a net loss after tax of $121 million compared to a net profit of $191 million in the prior year.

• Total comprehensive loss for the period was $120 million, down from income of $186 million year-over-year.

• Despite operational headwinds, strategic momentum continues with a strengthened renewables pipeline, multiple projects nearing investment decisions, and a record retail market share of 16.58%.

• Retail transformation reduced workforce by 10%, enhanced digital capability, and increased retail connections by 4–5% since June 2024.

• Leadership transition is underway, with the CFO set to become CEO from 30 June 2025.

Financial highlights

• Operating cash flows fell by $253 million to $50 million, an 83% drop year-over-year.

• EBITDAF dropped 42% to $257 million from $443 million, reflecting lower hydro generation and higher supply and hedge costs.

• Net profit after tax was -$121 million, with underlying NPAT at -$5 million, compared to $191 million and $175 million profit in the prior year.

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

• Operating revenue increased to $2,255 million from $2,111 million year-over-year.

Outlook and guidance

• Full-year operating cost guidance reduced to $298–304 million, and FY25 capital expenditure guidance lowered to $220–250 million due to project delays.

• Over $1 billion in new capital commitments expected in the current year, with 680MW of development projects now consented.

• Dividend policy remains focused on stability and long-term payout ratios, with flexibility to exceed 100% payout in exceptional years.

• Recovery in financial performance is contingent on improved hydrology, gas market resolution, and regulatory changes.

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