Meridian Energy (MEL) H2 2024 earnings summary

Executive summary

• Achieved record operating cash flow of $667 million and EBITDAF of $905 million for FY24, driven by strong retail performance, higher prices, and successful delivery of the Harapaki Wind Farm on time and budget, adding 176MW capacity.

• Secured new 20-year contracts with NZAS, providing sector certainty and enabling a reset of dividend policy and renewable build program.

• Significant progress on renewable pipeline, with $3 billion investment planned through the decade, grid-scale battery projects advancing, and nearly 700 MW of new projects at advanced design stages.

• Paused Southern Green Hydrogen project due to global inflationary pressures, unfavorable economics, and slow market development; partnership with Woodside concluded.

• Navigated unprecedented low hydro inflows and storage, leveraging demand response agreements and hedging to manage supply security.

Financial highlights

• EBITDAF up 16% year-over-year to $905 million, primarily from increased energy margin and retail pricing improvements.

• Net profit after tax surged to $429 million (FY23: $95 million), with underlying NPAT up 14% to $359 million, driven by $249 million in net gains on hedge instruments.

• Operating cash flow up 31% to $667 million.

• Capital expenditure for FY24 was $349 million, mainly for growth projects, at the lower end of forecast.

• Declared a final ordinary dividend of 14.85cps (+25%), with full-year dividends at 21.00cps (+17%), and a 2% discount on the Dividend Reinvestment Plan.

Outlook and guidance

• FY25 will focus on navigating ongoing drought impacts, restoring hydro storage, and delivering transformer replacements, with operating costs expected at $302–308 million and capex at $295–325 million.

• Focus on delivering 7 renewable projects by 2030, with $3 billion new generation investment planned.

• Stay-in-business CapEx to remain elevated until 2027–2028 due to major system replacements.

• Wholesale prices expected to moderate as more renewables come online, but near-term volatility remains due to gas scarcity and low hydro inflows.