Meridian reports solid result for December '09

Meridian reports solid result for December 09 half-year

State-owned power generator and retailer Meridian has reported a solid performance for the six months to 31 December 2009, recording a net profit after tax of $142.5 million and an underlying profit of $118.7 million.

Meridian Chief Executive Tim Lusk says the half-year to December 2009 represents a significant increase in earnings from the same period the previous year, which was severely impacted by adverse hydrological conditions. In the six months to December 2008 the company recorded a net loss after tax of $20.5 million, and an underlying profit of $84.6 million.

Mr Lusk says the improvement was largely the result of improved hydrology and hydro storage which allowed increased generation, albeit at lower prices.

“While we have not had the problems of previous years we have had our challenges this year, with a wet winter and a much more competitive retail environment, and to have achieved this result which is line with our targets is very encouraging indeed.”

The improved performance was also achieved at a time when Meridian was undergoing significant internal change following a review of the company structure and its way of doing business.

“This has been a necessary adjustment after the first ten years of Meridian’s existence, and we are well on the way to re-shaping the company organisationally and culturally to ensure it is fit-for-purpose for the period ahead.”

The most significant development during the period was the announcement of the decisions from the Ministerial Review of the electricity industry, which will see ownership of the Tekapo A and Tekapo B hydro stations transfer from Meridian to Genesis, with Meridian receiving the thermal reserve plant at Whirinaki.

“Meridian has always supported the overall objectives of the Ministerial Review to improve the electricity market in New Zealand. We are engaging fully with all of the relevant stakeholders to ensure the successful implementation of the Review decisions.”

Other highlights of the period included the full commissioning of the West Wind wind farm near Wellington, and the commencement of construction of the Te Uku wind farm near Raglan, while a set-back had been the rejection by the Environment Court of the resource consent for the Project Hayes wind farm development in Central Otago. This is now being appealed to the High Court.

Mr Lusk says the company is confident that its strategic focus on renewable energy remains a sound basis for its future growth.

Looking ahead for the rest of the year Mr Lusk says implementation of the Ministerial Review outcome will be a major focus.

“We will also be focusing very hard on lifting our customer game and we are encouraged by the rapidly-improving standard of service from our Christchurch-based contact centre which we brought in-house last year. The performance of our on-line retail subsidiary Powershop which now exceeds 10,000 customers is an additional demonstration of our determination to bring innovation and choice to consumers.”

Mr Lusk says Meridian is confident it is on track to achieve its targets, which would see underlying profit for the full year exceeding last year’s result under most hydrology conditions.

ENDS

© Scoop Media