Meridian Energy Limited · NZX:MEL
Meridian Energy — H1 FY2009 Earnings Presentation
23 slides from Meridian Energy's earnings presentation, Mar 13, 2009
Slide 1: Interim Results Announcement
Interim Results Announcement For the Six Months Ended 31 December 2008 13th March 2009 Page 1 Embargoed until 2:30pm 13 March 2009 (Final)
Slide 2: Agenda
Agenda • Highlights • Results Overview • Financial Summary / Overview • Segment Results • Balance Sheet Strength • Capital Spending • Development Environment & Regulatory Update • Development Portfolio Update • RTANZ • Strategic Focus 13th March 2009 Page 2 Embargoed until 2:30pm 13 March 2009 (Fina
Slide 3: Highlights
Highlights • $20.5M reported loss after-tax and $85M underlying earnings after-tax reflecting our recovery from the challenges from Winter 2008 • Earnings improving and ahead of target due to unprecedented recovery of fuel stocks • Segment information introduced to improve financial reporting transp
Slide 4: Results Overview
Results Overview $M Dec 08 change Reported Net (Loss) / Profit after Tax 1 $M (20.5) down 122% Underlying Profit After Tax 2 $M 85.0 down 15% EBITDAF $M 237.4 down 6.7% EBITDAF per MWh $ per MWh 42.30 up 1% Number of Retail Customers # 187,700 up 3.5% Notes 1. Reported Net (Loss) / Profit After Tax
Slide 5: Financial Results - Reported
Financial Results - Reported $M Dec 08 Dec 07 % Change Revenue 1,112.6 914.6 21.6 Total Operating Costs (875.2) (660.2) (32.6) EBITDAF 237.4 254.4 (6.7) Unrealised Gains (Losses) on Financial Instruments (150.8) (8.9) (1,694.4) Depreciation and Amortisation (78.9) (75.1) (5.1) Equity Accounted Earni
Slide 6: Financial Results - Underlying
Financial Results - Underlying $M Dec 08 Dec 07 % change Reported Net Profit (Loss) After Tax (20.5) 93.7 - Adjustments: Unrealised Gains / Losses on Electricity Derivatives 79.8 10.6 752.8 Unrealised Gains / Losses on Financial Instruments 71.0 (1.7) - Adjustments Before Tax 150.8 8.9 1,694.4 Tax E
Slide 7: Emerging from the Dry Winter of 2008
Emerging from the Dry Winter of 2008 Lakes Lakes Pukaki Pukaki and and Tekapo Tekapo -- Storage Storage (GWh) (GWh) Weekly Weekly Average Average Spot Spot Price Price in in 2008 2008 ($ ($ per per MWh) MWh) 3,000 3,000 500 500 Storage Storage 2003 2005 2006 2008 Average 2003 2005 2006 2008 Average
Slide 8: Operating Results - Wholesale
Operating Results - Wholesale $M Dec 08 Dec 07 % change Wholesale Revenues 601.7 465.6 29.2 Wholesale Electricity Purchases & Other Energy Costs (221.6) (139.6) (58.7) Transmission, Distribution and Levies (45.5) (58.1) 21.7 Employee Costs and Other Costs (25.5) (29.6) 13.9 (excludes unallocated cor
Slide 9: Operating Results - Retail
Operating Results - Retail $M Dec 08 Dec 07 % change Retail Revenues 504.6 441.4 14.3 Retail Electricity Purchases (342.2) (199.9) (71.1) Transmission, Distribution and Levies (155.7) (146.8) (6.1) Employee Costs and Other Costs (30.3) (24.9) (21.7) (excludes unallocated corporate costs) Total Opera
Slide 10: Operating Results – Other Segments
Operating Results – Other Segments $M Dec 08 Dec 07 % change Total Revenues 11.3 10.8 4.6 Total Operating Expenses 21.9 25.6 14.4 Other Segments EBITDAF (10.6) (14.8) 28.4 • $170M invested to date in a portfolio of companies at various stages of incubation and development: ― Arc Innovations (smart m
Slide 11: Balance Sheet Strength - How is Meridian Placed
Balance Sheet Strength - How is Meridian Placed $M Dec 08 Dec 07 % change Net Debt (Fair Value) 1,077.7 716.5 50.4 Net Debt / (Net Debt + Equity) 20.6% 13.9% (48.2) EBITDAF Interest Cover (# of Times) 5.1 8.8 (42.0) • S&P BBB+ credit rating re-confirmed • $405M of surplus committed bank facilities a
Slide 12: Funding and Liquidity
Funding and Liquidity 450 Debt Facility Maturity Profile $M 400 Available Facilities 350 Drawn Debt 300 250 200 150 272 225 100 200 150 147 50 50 61 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 • Increased borrowings during the period by drawing down a further $100M from committed bank f
Slide 13: Capital Spending
Capital Spending 900 900 Capital Capital Expenditure Expenditure Outlook Outlook $M $M 800 800 Other Other Growth Growth && Subsidiaries Subsidiaries Hydro Hydro 700 700 Wind Wind 600 Base Base Capex Capex 600 321 Committed 321 Committed 500 500 400 400 120 120 300 300 381 381 345 345 200 200 192 19
Slide 14: Long Run Cost of Generation Capacity
Long Run Cost of Generation Capacity Alternative CCGT Coal Wind Hydro Geothermal Technology $160 ? $140 ? $120 LRMC (2009 $/MWh) CO2 $50 $100 CO2 $25 Additional $80 O&M Fuel $60 Capex $40 $20 $- New Geothermal - Standard Wind Good Tier 1 100MW Wind Good Tier 2 300MW Wind Average Tier 2 100MW 1,000MW
Slide 15: Regulatory Update
Regulatory Update • Phase 1 amendments before Select Committee to be implemented by Aug Resource Management Act 09 – includes priority consenting and creation of EPA Amendments • Phase 2 to be announced in Aug 09 – to deal with substantial reform of water management (move to market allocation signal
Slide 16: Transmission
Transmission • Pole 1 unexpectedly removed from service November 2007 ― Constrains how much power can be moved between the South and North Islands (both ways) on the HVDC Cook Strait cable ― Resulted in price separation between the two islands – the two islands now operate like separate markets • Tr
Slide 17: Development Portfolio
Development Portfolio Development Project Type Capacity Status West Wind 143 MW Under construction Ross Island (Antarctica) 1 MW Under construction Te Uku 65 MW Consent received – in detailed design Project Hayes WIND Up to 630 MW Environment Court Appeal closed, decision pending Central Wind 120 MW
Slide 18: Wind Development – Projects Under Construction
Wind Development – Projects Under Construction West Wind (Wellington) • Well on our way to completing our 62 turbine wind farm development at Makara in Wellington • West Wind will put Meridian on the global stage in terms of its generation capability • Will generate enough power for the equivalent o
Slide 19: Renewable Generation Projects – Consent Stage
Renewable Generation Projects – Consent Stage Project Hayes (Otago) North Bank Tunnel Concept Hunter Downs Irrigation • Up to 176 turbines • Innovation with • Partnership with the • Maximum capacity of Waitaki hydro to South Canterbury 630MW increase our Irrigation Trust generation capacity • Up to
Slide 20: Renewable Generation Projects – Consent Stage
Renewable Generation Projects – Consent Stage Mill Creek (Wellington) Central Wind (North Island) Mokihinui Hydro (West Coast) • In statutory appeal • Consent granted and • Proposed Hydro period, after having in appeal Dam received consent for • Capacity for up to 52 • Capacity to meet the 29 of 31
Slide 21: RTANZ
RTANZ Background • Rio Tinto Alcan Power NZ Limited (RTANZ) is Meridian’s largest customer ― Meridian provides physical delivery of electricity under the current contract which expires in 2012 • New Pricing agreement entered into 18 months ago: ― Commences January 2013 for a period of up to 18 years
Slide 22: Strategic Focus
Strategic Focus • Outlook for the Full Year: ― On track to meeting full-year Statement of Corporate Intent targets ― Demand dropping off as economic slowdown effects are felt ― Current hydrology conditions are favourable but still some risk • Meeting the Market: ― Pure renewable generation play ― St
Slide 23: Interim Results Announcement
Interim Results Announcement For the Six Months Ended 31 December 2008 13th March 2009 Page 23 Embargoed until 2:30pm 13 March 2009 (Final)