Mercury revises FY2025 EBITDAF guidance down $60m

Mercury has revised its FY2025 EBITDAF guidance from $820 million to $760m – a $60m drop.

This reflects an expected 150GWh decrease in full year hydro generation to 3400GWh owing to continued dry weather in the Taupō catchment, and projected below mean hydro inflows and lake levels through to June 30, 2025, says Mercury.

It says FY2025 ordinary dividend guidance remains unchanged at 24 cents per share and stay-in-business capital expenditure guidance remains unchanged at $150m.

Meanwhile, Mercury’s quarterly operational update for the three months ended March 31, 2025, includes a long-term On(10-year) agreement with Fonterra for about 260GWh for Fonterra’s Waitoa and Edgecumbe sites, and the start of a long term supply agreement with New Zealand Aluminium Smelters (NZAS) from January 25, 2025, initially for 50MW and stepping up to 75MW in 2027.

Mercury says national hydrological inflows were the lowest on record during the quarter, resulting in high spot electricity prices averaging $225/MWh in Auckland.

“Forward prices remain high at $205/MWh in Auckland for financial years 2025 to 2027 as of March 31, 2025,” it says.

“Normalised national demand was 3.5% lower for the quarter relative to PCP, mainly impacted by irrigation and industrial demand response.”

Mercury says decreased wind and record low Q3 Waikato catchment inflows saw lower generation output.

1 News reports power prices are rising because regulators are increasing charges for the use of pylons, substations, poles and wires, earlier covered by EVs and Beyond

Electricity Networks Aotearoa (ENA) says there’s another reason for power price rises too.