By David Winning


SYDNEY--Mercury NZ Ltd. said its first-half net profit fell by 46% after a large gain on the sale of its stake in Tilt Renewables wasn't repeated, but its operating earnings jumped on a large increase in hydro generation.

Mercury NZ reported a net profit of 230 million New Zealand dollars (US$145.4 million) for the six months through December, down from NZ$427 million a year earlier. Revenue, however, rose by 49% to NZ$1.3 billion. Directors of the company declared an interim dividend of 8.7 New Zealand cents per share.

Mercury NZ said earnings before interest, tax, depreciation, amortization and fair value adjustments--or ebitdaf--totaled NZ$451 million in the half-year period, up 86%.

"Wet weather has defined the period, in sharp contrast to a dry FY 2022," said Mercury Chief Executive Vince Hawksworth. "In addition to producing the highest hydro generation volume in our company's history, another 675GWh was spilled to maintain lakes within Resource Consent operating limits."

The result also reflects a larger retail business following Mercury NZ's acquisition of that division of Trustpower. The early exit of a long-term hedge with Norske Skog a year ago, which reduced revenue by NZ$65 million in that period, contributed to higher Ebitdaf in this period.

Mercury NZ said its annual Ebitdaf guidance remains at NZ$795 million.

"The uplift in forecasted Ebitdaf compared to prior year reflects a lift in the FY 2023 hydro production forecast to 4,900GWh (from 4,500GWh), with additional hydro mostly generated at a time of low spot electricity prices and the active management of Lake Taup? within consented operating limits," the company said.


Write to David Winning at david.winning@wsj.com


(END) Dow Jones Newswires

02-20-23 1500ET