Thursday 20 April 2017 09:01 AM
Mercury nudges up earnings guidance on increased hydro generation
By Paul McBeth
April 20 (BusinessDesk) - Mercury Energy, the electricity generator-retailer formerly known as MightyRiverPower,
increased annual earnings guidance 2 percent as unseasonably strong inflows in the Waikato catchment lifted the power
company's hydro generation.
Auckland-based Mercury expects earnings before interest, tax, depreciation, amortisation and fair value adjustments to
be $510 million in the 12 months ending June 30, up from $493 million a year earlier. The $10 million increase in
guidance is Mercury's second upgrade, with the gentailer raising its annual forecast when posting its first-half result
in February due to increased hydro generation.
"This is due to a forecast 250 GWh (gigawatt hours) increase in full year hydro generation to 4,500 GWh resulting from
unseasonably strong inflows to the Waikato catchment," the company said in a statement. "Other FY2017 guidance remains
Above-average rainfall through the latter half of last year helped bolster Mercury's first-half earnings, and the
company today said those conditions continued in the March quarter. Of the increased generation forecast, 170 GWh
reflected inflows into the Waikato catchment.
Still, the company's quarterly operating report showed national demand for electricity remained subdued, down 0.2
percent from the same period a year earlier as lower industrial use offset an increase in demand from dairy processors.
Mercury had 390,000 electricity customers at the end of March, up from 377,000 a year earlier, Its annualised churn rate
of 17.6 percent was the lowest among the major retailers and below the market average of 20.5 percent, it said.
The shares last traded at $3.12 and have gained 5.4 percent so far this year.