Second Mercury earnings upgrade as summer storms fill northern hydro storage
By Paul McBeth
Jan. 24 (BusinessDesk) - Mercury NZ, formerly MightyRiverPower, has raised its annual earnings guidance for a third time
as a spell of wet summer weather around Taupo has the power company anticipating increased generation at its North
Island hydro stations.
Earnings before interest, tax, depreciation, amortisation, and fair value adjustments are expected to be $530 million in
the year ending June 30, up from a previous forecast of $515 million, which was itself an upgrade. The Auckland-based
company reported earnings of $523 million in 2017.
"This is due to an expected 150 GWh (gigawatt hour) increase in full-year 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 4,550 GWh for the
financial year, of 550 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 a larger South Island footprint have contended with lower lake
levels than normal.
The company reported record second quarter generation of 1,848 GWh sold at a volume-weighted average price of $89.84 per
megawatt hour, up from 1,827 GWh at a wholesale price of $46.87/MWh in the same period a year earlier. Of that, 1,172
GWh was hydro generation at an average price of $91.34/MWh, compared to 1,112 GWh at an average price of $49.28/MWh.
Mercury's curstomer numbers rose to 393,000 in the December quarter from 387,000 a year earlier.
The shares last traded at $3.32 and have gained 7.1 percent over the past 12 months.
(BusinessDesk)
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