Meridian, which sources much of its energy from the South Island, reported earnings before interest, tax, depreciation, amortisation, change in fair value (ebitdaf) of $476.6 million in the year ended June 30, compared to $659.9 million in the previous corresponding period (pcp).
In the period, operating revenue rose 26% to $2.57 billion from $2.05 billion in the pcp.
The reported profit after tax fell 76% to $74.6 million from $303.1 million in the pcp. Last year's reported profit was boosted by the sale of the Tekapo hydro stations to Genesis Energy, 11 months of generation revenue from the Tekapo station and proceeds received following the settlement with New Zealand Aluminium Smelters.
Meridian is one of the state-owned energy companies earmarked for a partial sell-down by the Government - probably next year. During the year, the company paid the Government a $140.7 million dividend.
Chief executive Mark Binns said it was an unprecedented year in terms of hydrology conditions, the lowest inflows in 79 years.
The integrated nature of the wholesale and retail business had been key to improving performance compared to 2008.
"We've managed the situation well through conservative generation and by actively hedging our position against contract load."
The accounts showed the company's energy-related costs climbed to nearly $1.4 billion in the June year from $703 million in the pcp. Distribution expenses rose to $404 million from $367 million and transmission expenses rose to $86.7 million from $84.2 million.
Mr Binns said the record low inflows and impairments realised during the year had driven the fall in the reported profit.
Impairments reflected the decisions taken to rationalise the company's generation development portfolio and non-core investments.
Since Mr Binns started in January, Meridian had rationalised its non-core investments. That included the announcements of the decisions to construct Mill Creek and exit both Project Hayes and Mokihinui.
The company's overseas renewable development projects were progressing well, he said.
In Victoria, the joint venture with Macarthur wind farm project was due to start generating first power next month and a solar farm for the Tongan Government was delivered under the New Zealand Government aid programme.
Last week, Meridian advised it has been approached by Pacific Aluminium, a business unit of Rio Tinto Ltd, the majority shareholder of New Zealand Aluminium Smelters Ltd (NZAS), to discuss potential changes to the electricity contract with the smelter.
In 2007, Meridian renegotiated the contract conditions with NZAS and signed a new electricity supply agreement, which takes effect in January 2013.
Under the new contracts, which run to 2030, Rio's take or pay obligations will rise from 543.75MW annually now to 572MW annually. The electricity price will be calculated on a formula taking into account exchange rates and global aluminium prices.
The smelter bought an extra 81MW of electricity last year on the wholesale electricity spot market, taking total consumption to 625MW.
Mr Binns described as "a concern" the London-listed multinational metals firm's desire to renegotiate contracts representing about one-seventh of electricity consumed in the country.
The issue has the capacity to delay the planned partial privatisation of Meridian.
