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21 Apr 2018 21:50
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  •   Home > News > Business

    Big wet spurs Mercury earnings upgrade

    Electricity generator Mercury NZ raised annual earnings guidance as persistent wet weather swelled the electricity generator-retailer's hydro scheme.


    Electricity generator and retailer Mercury NZ raised annual earnings guidance for a third time as persistent wet weather in the central North Island swelled the electricity generator-retailer's hydro scheme.

    Earnings before interest, tax, depreciation, amortisation and fair value movements are expected to be $540 million in the year ending June 30, up from a previous forecast of $530m, which had already been upgraded on the favourable weather.

    Mercury reported ebitdaf of $523m in 2017.

    "This is due to an expected 150 GWh (gigawatt hour) increase in full year forecast hydro generation due to continued wet weather in the Taupo area," the company said in a statement.

    "Annual hydro generation is now forecast to be 4700 GWh for the financial year, or 700 GWh above average."

    Mercury and Trustpower have enjoyed improved earnings outlooks for the 2018 financial year with rain patterns benefiting their North Island generation, while their rivals with large South Island hydro catchments have contended with lower lake levels than normal.

    The company's hydro generation rose 8.5 per cent to 1035 GWh in the three months ended March 31 from a year earlier, while the volume weighted average price jumped 58 per cent to $87.34 per megawatt hour.

    Geothermal generation dropped 5.9 per cent to 591 GWh and Mercury's share of the Tuaropaki Power co-generation venture fell 17 per cent to 45 GWh, while volume weight average prices climbed 53 per cent to $75.39/MWh and 55 per cent to $78.21/MWh respectively.

    "Mercury continued to benefit from high inflows into the Waikato catchment with hydro generation in the quarter reaching 114 per cent of average," it said.

    "The increased hydro contribution offset a reduction in geothermal output at Kawerau due to a planned two-yearly maintenance outage."

    Mercury's retail electricity customer numbers edged up 1000 to 391,000 in the March quarter from a year earlier, while retail sales slipped 3.5 per cent to 1266 GWh on a 64 per cent increase in average price to $87.92/MWh.

    The shares last traded at $3.305 and have gained 4.6 per cent so far this year.


    NZN




    © 2018 NZN, NZCity


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