Meridian posts an increased dividend

Meridian Energy experienced low inflow into its key South Island hydro lakes but still managed to increase its dividend when it reported its first-half financial results this week.

The company reported an operating profit of $329million for the six months ended December, down 6.5% on the $352million reported in the previous corresponding period.

The profit before tax was down 8% at $154million and normalised reported profit was down 13% at $109million from $124million in the pcp.

Earnings per share (eps) fell from 5.1c in the pcp to 3.7c.

The interim ordinary dividend was 5.38 cents per share. A further special dividend of 2.44cps under the company's capital management programme would also be paid.

Meridian chief executive Neal Barclay said in a statement despite the persistently low South Island Hydro inflows which had characterised the New Zealand market over the past six months, it was pleasing to see the company had achieved strong customer-led growth across multiple segments and geographies.

''We have also secured three hydro stations in New South Wales and signed a further three power purchase agreements to ensure we can continue to support Powershop growth in Australia.

''We're finding there is a strong and growing desire from Australian electricity consumers to support a 'green' energy retailer.''

Meridian was also committed to continuing to support its customers in New Zealand who were wanting to take advantage of this country's renewable energy profile, he said.

The company had launched a nationwide electric car plan which gave its customers with an electric car a 20% discount off their electricity bill.

To encourage customers to embrace sustainable technology, Meridian was also going to cover the cost of charging their customers' electric cars for a year.

Craigs Investment Partners broker Chris Timms said the result highlighted the company's good risk mitigation.

The New Zealand energy margin came in at $452million with the 16% generation decline being offset materially by risk mitigation, in line with forecasts.

The international performance was up $6million at $36million, driven by stronger generation and pricing up $7million. Powershop revenue was keeping up with growth-driven cost.

''Management did not provide guidance. January was a poor inflow month but February had improved. Dam levels were at 97% of historic averages yesterday before Gita and is likely to be above average now.''

Craigs remained confident the company could achieve profit of $636million for the year.

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