Corporate

Mercury Energy hits new record profit

This article was originally published on RNZ and re-published with permission.

Mercury Energy has made a record annual profit as it generated more geothermal power and charged higher spot prices.

The power company's net profit rose 53 percent for the year ended June to $357 million, boosted by a gain on the sale of its smart meter Metrix business and lower interest rate costs.

Chief executive Fraser Whineray said the result was achieved despite unusual weather and market conditions.

"Making the most of the challenging hand dealt by Waikato catchment inflows and elevated spot pricing required a very strong performance from generation and wholesale markets teams."

"High geothermal availability, as the only renewable energy source that is not weather dependent, maximised the opportunity of historically high spot prices."

Revenue rose 11 percent to $2 billion, while underlying earnings fell by the same amount to $505m.

It did not disclose the company's level of customer loss - the churn rate - however, said competition was strong.

"[Mercury] focused on customer value and loyalty as retail margins contracted with elevated spot prices and ongoing high levels of retail competition," he said.

Mercury earlier this year unveiled plans to build a new wind farm close to Palmerston North and also has a near 20 percent stake in Australian based wind farm operator Tilt Renewables.

"We will continue to explore inspiring ways to encourage the transition to electrified transport for the long-term benefit of the country as well as our owners," Whineray said.

Whineray said the restart of New Zealand Aluminium Smelter's fourth potline at Tiwai Point has lifted annual demand by about half a percent.

It expected underlying earnings to be lower this financial year, at $485m.

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