Mercury raises earnings outlook again as Taupo rain boosts generation
By Paul McBeth
June 14 (BusinessDesk) - Mercury NZ has raised its earnings guidance for a fourth time as more rain around Taupo keeps
the power company's North Island generation pumping out more electricity.
The Auckland-based electricity generator-retailer expects earnings before interest, tax, depreciation, amortisation, and
fair value adjustments of $555 million in the year ending June 30, up from a previous forecast of $540 million which had
already been upgraded three times on the inclement weather. Mercury reported ebitdaf of $523 million in 2017.
"This is due to an expected 200 GWh (gigawatt hours) 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 4,900
GWh for the financial year, or 900 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 contended with lower lake
levels than normal. Things have improved for the South Island hydro lakes since the dry spring with dams back at more
Separately, Meridian Energy, the country's biggest electricity generator, said its South Island hydro storage was at 117
percent of average and its North Island storage was at 138 percent as at Jun 13. National hydro storage was 120 percent
of the historical average, it said.
Meridian's May monthly inflow was 105 percent of the average in a mixed month where dry conditions were followed by
unsettled weather later in the month. The company's hydro generation climbed 18 percent to 1,037 GWh in May from a year
earlier, offsetting earlier declines which have seen year-to-date total generation 11,301 GWh, down 8.9 percent from a
Mercury shares last traded at $3.38 and have increased 0.3 percent so far this year having recently completed a $50
million share buyback. Meridian stock last traded at $3.165 and has gained 9.1 percent so far this year.