Meridian Energy has reported a massive surge in its financial performance, with net profit after tax skyrocketing to $429 million for the year ending 30 June 2024—more than quadrupling from $95 million the previous year.
The increase was accompanied by a significant rise in operating cash flows, which climbed to $667 million, up from $509 million.
A key factor in the profit increase was net gains on hedge instruments, which amounted to $249 million for the 2024 financial year.
This marks a sharp reversal from the previous year, when Meridian recorded net losses on hedge instruments totaling $351 million.
The improved financial performance was also evident in the company’s EBITDAF (Earnings Before Interest, Tax, Depreciation, Amortization, and Fair value adjustments), which rose by 16% to $905 million. Additionally, Meridian’s underlying net profit increased by 14% to $359 million.
“This is a strong and improved operating result that allowed us to invest $349 million in new and existing generation assets during the year,” said Neal Barclay, Chief Executive of Meridian Energy.
However, despite record profits, the company said it was facing new challenges due to a dramatic shift in the operating environment.
Since May 2024, Meridian had been dealing with an emerging drought that has led to record low inflows into its hydro catchments, combined with a shortage of gas and unusually low wind.
“Record low inflows have combined with a shortage of gas and unseasonably low wind, causing wholesale prices to lift materially,” Barclay said. “As a result, Meridian called on hedge arrangements to ensure our hydro lakes were managed within consent conditions to maintain security of supply.”
Despite the soaring wholesale prices, Barclay said less than 0.01% of Meridian’s customers were directly impacted.
The Board has declared a final ordinary dividend of 14.85 cents per share, bringing the total ordinary dividends for FY24 to 21.00 cents per share.
The Dividend Reinvestment Plan will continue at a 2% discount, indicating Meridian’s strong financial position and commitment to returning value to its shareholders.
