Morningstar

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Equity Bottom-Up

Narrow-moat Meridian Energy had a strong first-half fiscal 2019, as expected. EBITDA rose 18% to NZD 389 million and underlying NPAT rose 38% to NZD 144 million. The result was driven by strong increases in hydroelectric generation and wholesale prices. We make minor changes to near-term earnings forecasts but longer-term forecasts are largely unchanged. We maintain our NZD 3.20 fair value estimate and consider the stock marginally overvalued at current prices.
Analyst: Adrian Atkins

We retain our NZD 3.20 fair value estimate for narrow moat rated Meridian Energy following the release of monthly operating statistics for November. After dry conditions last year, fiscal year-to-date rainfall into Meridian's catchments is back to nearly average levels, and Meridian's catchments boast better-than-average levels of storage. Generation volumes are up, year to date, and on track to grow at our forecast of 6% over fiscal 2019. We expect this momentum to continue, and good levels of…

Narrow-moat Meridian Energy reported fiscal 2018 EBITDA of NZD 666 million, up 1.4% on the previous corresponding period, or pcp, and slightly ahead of our forecast of flat earnings. Better hydrology volumes towards the end of the fiscal year have partially offset the first half's dry spell. Lake storage levels are once again above long-term averages, boding well for near-term earnings. We expect hydroelectric generation, the vast majority of Meridian's energy production, to continue to improve…

Narrow-moat Meridian Energy reported first-half fiscal 2018 EBITDA of NZD 329 million, down 7% on the previous corresponding period, or pcp, amid poor hydrology conditions in the firm’s catchments. We downgrade our fiscal 2018 EBITDA forecast 7% to NZD 619 million. Nevertheless, we expect hydroelectric generation, which comprises the vast majority of Meridian’s energy production, will improve as weather conditions normalise. This, combined with favourable changes to transmission pricing and a…

Trustpower reached conditional agreement to sell its small Australian hydroelectric assets to fellow New Zealand gentailer Meridian Energy for AUD 168 million. Trustpower will book a large profit on the sale, having bought the assets and a couple of small wind farms, which subsequently transferred to Tilt renewables, in 2014 for AUD 72 million. Since acquisition, the earnings for these assets have benefited from good rainfall and higher electricity prices. The sale will significantly strengthen…

New Zealand

Meridian Energy Ltd. operates as a state-owned electricity generator. The Company produces hydro-electric power and supplies electricity to residential, business, and rural customers. Meridian Energy provides services throughout New Zealand.

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