Mercury boosts forecast

Mercury has revised its FY2021 EBITDAF guidance upwards by $30 million from $505m to $535m.

This reflects strong trading and an expected 200GWh increase in full year hydro generation to 3900GWh, it says.

“Guidance may change and remains subject to any material events, significant one-off expenses or other unforeseen circumstances including changes to hydrological conditions.”

In its operational update for the three months ended December 31, 2020, Mercury says elevated spot prices persist due to low South Island inflows and thermal fuel constraints.

It notes the Tiwai Point aluminium smelter contract extending to the end of 2024 which saw a lift in FY2022 futures prices.

Sales volumes and yields generally lifted, while national demand increased slightly (0.3% on a temperature-adjusted basis).

Mercury says its focus on customer value saw sales yields in the mass market segment increase by 7.7% from $129/MWh to $139/MWh and in the commercial and industrial segment by 9.1% from $79/MWh to $86/MWh.

Customer connections decreased by 6000 to 336,000 across the quarter – 20,000 lower compared to the end of FY2020-Q2.

Hydro generation was flat for the last quarter versus the prior comparable period, Mercury lifting hydro storage at Lake Taupo leading into the historically dry January quarter. Geothermal generation was higher although the previous comparable period was affected by shutdowns for maintenance.

Mercury chief executive Vince Hawksworth has announced changes to his executive structure, effective February 2.

The renewable electricity generator and electricity retailer will realign its business with seven executive roles reporting to the chief executive; three current roles of chief financial officer (William Meek), chief marketing officer (Julia Jack), and general manager people and performance (Marlene Strawson); and newly created roles of general manager generation, general manager portfolio (Phil Gibson, currently general manager hydro/wholesale), general manager sustainability and general manager customer – most subject to a recruitment process.

Disestablished executive roles are general manager retail and digital, general manager hydro/wholesale, general manager geothermal and safety, and general manager corporate affairs.

General manager retail and digital Kevin Angland, general manager geothermal and safety Nick Clarke, and general manager corporate affairs Tony Nagel have chosen to leave Mercury after assisting with transition planning.