Meridian lifts first-half profit to $227m

Meridian Energy has rebounded strongly from last year’s winter drought, posting a net profit after tax of $227 million for the six months to December 31, compared with a $121m loss in the same period a year earlier.

The result was driven by record wind generation and the second-highest lake inflows on record, which lifted earnings and pushed wholesale electricity prices sharply lower.

Operating cash flows rose to $336m for the half year, up from $50m in the prior corresponding period, when the company’s performance was hit by the cost of hedge and demand response contracts used to support customers and electricity security during winter 2024.

EBITDAF increased to $506m from $257m, while underlying net profit after tax rose to $143m from a $5m loss.

Energy margin climbed 59% year-on-year, up $264m to $708m. Daily wholesale spot prices averaged $84 per megawatt hour over the six months, falling to an average of $12 per MWh in December amid strong hydro inflows and wind output. Retail sales volumes were up 12%, reaching record levels.

Meridian chief executive Mike Roan says the result marks a welcome turnaround.

“A core part of our business is to manage weather variability, so we were pleased Mother Nature came to the party in the first half of the year. These conditions helped deliver a strong financial result and a period of extremely low wholesale prices. This is a sign of a market that continues to function well.”

He says the company remains focused on strengthening the electricity system and improving affordability.

“That’s why we continue to work hard to improve the electricity system and what it offers consumers. Over the past six months we have advanced our development pipeline, enhanced the performance of existing assets, maintained our pursuit of contingent storage and taken steps towards making electricity more affordable for Kiwi homes and businesses.”

The board declared an interim ordinary dividend of 6.4 cents per share, up from 6.15c a year earlier. The dividend reinvestment plan will apply at a 2% discount.

Pipeline momentum

Meridian says it is progressing toward its target of having seven projects construction-ready between 2023 and 2030.

Harapaki Wind Farm and the Ruakākā battery energy storage system (BESS) are now operational, while construction continues on the Ruakākā and Te Rāhui solar farms.

Ruakākā is on schedule for first power in November, and the first stage of Te Rāhui – a 50/50 joint venture with Nova – is due for completion by mid-2027.

Final investment decisions are targeted this year for Mt Munro Wind Farm in the Wairarapa, the repowering of Te Rere Hau Wind Farm in the Manawatū, and the second stage of Te Rāhui solar. The company also expects consenting outcomes by mid-2026 for Swannanoa Solar (200MW), Waikato Solar (100MW), Manawatū Solar (100MW) and the reconsenting of the Waitaki Power Scheme.

Roan says Meridian now holds 8.0 terawatt hours of secured development options and a further 7.3TWh of advanced prospects — more than a third of New Zealand’s current electricity demand.

However, he says more firming capacity is needed to offset declining domestic gas supply.

“While we have made significant progress in advancing generation developments to offset the reduction of domestic gas, we need more firming capacity to restore the energy balance that New Zealand has historically enjoyed.”

Meridian is exploring hydro development options for the first time in decades as part of that shift.

Retail growth and technology investment

Retail volumes were boosted by the acquisition of Flick customers last August, lifting Meridian’s residential market share from 17.5% to 19.5%.

More than 75,000 customers have now migrated to the company’s new Kraken billing platform, with mass-market migrations expected to be completed mid-year and remaining corporate and industrial accounts by late 2026.

Roan says investment in technology is critical in a competitive retail market.

“People want more affordable energy and an increasing range of options for how and when they use it. We’re already ramping up the rollout of our Smart Hot Water product, which gives discounts to customers for allowing us to control when their cylinder heats so we can take pressure off the grid in peak periods.”

He says competitive solar buyback rates and electric vehicle plans are also helping customers reduce bills.

Meridian also highlighted strong generation performance, including major maintenance work at Ōhau C and Manapōuri, and increased use of AI to maximise plant availability.

The company achieved a Top 10% global score in its sector in the S&P Global Corporate Sustainability Assessment, scoring 83 out of 100 and securing a place in the S&P Global Sustainability Yearbook 2026.