Meridian Energy Limited · NZX:MEL
Meridian Energy — FY2009 Earnings Presentation
18 slides from Meridian Energy's earnings presentation, Sep 29, 2009
Slide 1: Annual Financial Results
Annual Financial Results 12-Month Period to 30 June 2009 © 2009 Meridian Energy Limited | Commercial in Confidence 29th September 2009 1
Slide 2: Tim Lusk, Neal Barclay
Tim Lusk Neal Barclay Chief Executive Chief Financial Officer © 2009 Meridian Energy Limited | Commercial in Confidence 29th September 2009 2
Slide 3: State of the Market
State of the Market ● Constrained HVDC (Pole 1 out) and North Island transmission constraints ● 180 MW demand reduction at Tiwai Point from transformer failure from November ● Softening demand due to the economic slowdown ● Recovering from Winter 2008 then “The Deluge” ● Price separation between the
Slide 4: We Have a Sound Strategy in Place
We Have a Sound Strategy in Place ● Sustainably improve our earnings / optimise our portfolio ● Lift the financial, service performance and product offerings of our Retail business ● Quality development options to deliver more renewable generation growth ● Invest in new disruptive technologies relat
Slide 5: 2008/09 – Key Achievements
2008/09 – Key Achievements ● Pleasing financial result for the year – bounced back from Winter 2008 ● Declared $143.9m normal dividend (75% of underlying profit) and $150M special dividend ● Strong competition in Retail – we have grown West Wind Facts customer numbers by 2.5% year-on-year ● Land are
Slide 6: Quality Development Options
Quality Development Options ● Consent applications before the Environment Court: – The 220-280 MW North Bank Tunnel hydro concept (water-use consent) – The up to 630 MW Project Hayes wind farm in Central Otago – The 120 MW Central Wind wind farm project in the central North Island – The 67 MW Mill C
Slide 7: Lifting Our Performance
Lifting Our Performance ● We acknowledged the need to lift our financial performance ● Late in 2008, we embarked on our “Fit for Purpose” programme to implement changes ● Key initiatives: – Smaller, more effective corporate capability – Significant reductions in our retail cost-to-serve Fit for – Cu
Slide 8: Earnings Summary
Earnings Summary Better / (Worse) Underlying Profit (Loss) After Tax ($m) $m Year-on-Year FY FY 80 $M 2009 2008 $M % 60 Energy Operating Margin 741.4 646.0 95.4 15% 61 60 40 49 44 49 Other Operating Costs (10.5) (50.7) 40.2 79% 40 36 20 Employee & Other Expenses (218.5) (221.4) 2.9 1.3% 0 EBITDAF 51
Slide 9: Operating Conditions
Operating Conditions $ / MWh Storage (GWh) Pukaki and Tekapo Storage (GWh) 2008/2009 Weekly Average Spot Price ($ per MWh) 3,000 400 1991/1992 Benmore 2003/2004 350 Haywards 2,500 2005/2006 2006/2007 300 2007/2008 Price Separation – 2,000 2008/2009 Historical average 250 North vs. South Islands 1,50
Slide 10: Statement of Corporate Intent Performance
Statement of Corporate Intent Performance This Year Last Year 2009 Compared to Year-on-Year Measure Units Target Result Target 2008 Change Equity to Total Assets % 59.9 59.7 ● 58.4 + 1.3 Return on Average Equity % 3.3 2.1 ● 3.0 - 0.9 Underlying Return on Average Equity % 4.0 4.6 ● 2.4 + 2.2 Net Debt
Slide 11: Financial Position
Financial Position $M 30 June 2009 30 June 2008 $m Term Borrowings ($m) 2,000 Current Assets 267 605 Debt (at current value) $1.25B Non-Current Assets 6,910 6,593 1,500 Total Assets 7,177 7,198 1,392 1,252 1,000 Current Liabilities * 234 596 943 Term Borrowings 1,252 943 755 500 630 Derivative Finan
Slide 12: Capital Expenditure Profile
Capital Expenditure Profile ● $2.6 billion investment 800 NZ Hydro Capital Expenditure Outlook ($m) over next five years Australia Wind Total NZ Wind Other 107 ● 5-year investment profile 600 Base and IT Asset Refurbishment 27 comprised of: Committed – Asset refurbishment $250m 400 (10%) 515 510 392
Slide 13: Regulatory Issues and Outlook for 2010
Regulatory Issues and Outlook for 2010 ● Ministerial Review – Committed to engaging in the issues identified in the Ministerial Review – Support for recommended changes to industry governance, security of supply and retail competition Regulatory – Suggested a proposal for a liquid wholesale hedge ma
Slide 14: www.meridian.co.nz
www.meridian.co.nz © 2009 Meridian Energy Limited | Commercial in Confidence 29th September 2009 14
Slide 15: Notes
Notes This presentation may contain projections or forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement
Slide 16: Supplementary Information
za meridian Supplementary Information
Slide 17: Income Statement Summary
Income Statement Summary Year-on-Year Change $M $M Better / % Better / FY 2009 FY 2008 (Worse) (Worse) Energy Sales and Related Services Revenue 1,892.4 2,600.1 (707.7) (27%) Other Revenue 20.5 19.8 0.7 3.5% Total Operating Revenue 1,892.4 2,600.0 (707.6) (27%) Energy-Related Costs (788.5) (1591.0)
Slide 18: Generation Trends
Generation Trends GWh Waitaki Hydro Generation (GWh) GWh Manapouri Hydro Generation (GWh) 9,000 9,000 7,500 7,500 7,861 7,399 6,789 6,892 7,010 6,000 6,000 4,500 4,500 5,241 4,954 4,538 4,711 4,176 3,000 3,000 1,500 1,500 - - 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 GWh Wind Generation (GWh