Meridian CE reports “satisfactory” profit

Media release

Embargoed release: 3pm Tuesday 29th September 2009

Meridian Energy has announced a net profit of $89.3 million for the year ended June 2009.

Underlying profit for the year was $195 million, compared with the last year’s $104.5 million.

Meridian will pay a final dividend of $113.9 million, following an interim dividend of $30 million paid in October 2008.

Announcing the result today Chief Executive Tim Lusk described the outcome as satisfactory, given the extraordinary challenges of the year.

“We began the year with our storage lakes at record lows and ended in almost the opposite situation, with the company managing a series of large inflows.

“This financial result was achieved in the face of extreme operational volatility. It is largely due to the close attention we paid to managing the company’s net contracted position. While we can never eliminate the impact of weather or external conditions, we have worked hard to mitigate their impact.”

A $150 million special dividend will also be paid to the company’s government shareholder.

“This is possible due to the better than planned underlying profit – driven by improved Net Energy revenues and lower interest costs – and a review of our capital structure and financial ratios,” said Mr Lusk.

Meridian completed the roll-out of around 112,000 smart meters in its main Canterbury market – now the largest smart meter platform in Australasia.

“The transformation that smart meters will eventually enable will be one of the most significant changes the industry has seen – delivering change on this scale as an industry takes time.

“Getting it right for our customers is a key focus for us right now. This year we are committed to working with and understanding what our customers want from their electricity retailer so we can produce products and services that will deliver true value.”

Mr Lusk said customers can expect to see new offers off the smart meter platform in the marketplace in the coming weeks.

“We have also frozen residential prices to the end of this financial year,” added Mr Lusk.

Mr Lusk said Meridian was pleased with the progress of its online retail subsidiary Powershop that launched in early 2009.

“Powershop has brought a new and innovative retail channel to the electricity market which offers unprecedented choice for electricity consumers.”

“The 2008-09 year was not just a story of confronting and overcoming a challenging set of conditions, it was the year Meridian began and progressed construction on the capital’s first renewable generation project West Wind,” said Tim Lusk.

In April 2009 Meridian celebrated first power from the 143 megawatt (MW), 62-turbine West Wind wind farm, near Wellington.

“West Wind anchors the lower North Island and relieves transmission constraints – it is already shaping up to be one of the country’s most important power projects.”

Some key projects in Meridian’s renewable development programme are in the consenting process and comprise more than 900MWs of generation options in hydro and wind.

“We intend to be in a strong position to build new generation capacity when the time is right.”

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ENDS

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