Meridian Energy reported a 39 percent increase in first-half profit, boosted by improved generation and sustained high prices in October and November.

The country’s biggest power generator had a net profit of $152 million in the six months through December, from $109 million a year earlier. Earnings before interest, tax, depreciation, amortisation and changes in financial instruments rose 18 percent to a record $389 million, from $329 million a year earlier.

Meridian, which operates the country’s biggest hydro dams on the South Island and some of its largest wind farms, benefited late last year when maintenance work at the Pohokura gas field reduced supplies just as hydro storage was also declining and other generators had plants shut for maintenance.

It has also benefited from the Tiwai Point aluminium smelter – its largest single customer – restarting its fourth potline after a six-year break and from the expansion of its generation business in Australia early last year.

“Good hydro storage has seen our New Zealand generation volumes increase 10 percent on the prior period, supporting higher contracted sales,” chief executive Neal Barclay says.

“The purchase of the Greenstate hydro assets in Australia led to higher generation volumes in Australia and UK customer sales have also increased on the corresponding period.”

The firm’s New Zealand generation volumes climbed to 6,546 gigawatt-hours in the period, with increased hydro production offsetting lower wind generation. It received an average generation price of $124.20/MWh, about 33 percent more than a year earlier.

That saw ebitdaf from the wholesale arm climb to $325 million from $262 million a year earlier. Transmission costs were about $3 million higher, while operating costs were about $4 million higher, including upgrade spending at the Te Apiti wind farm and the company’s Ohau hydro stations.

New Zealand retail earnings fell to $37 million from $49 million, reflecting a 4.5 percent fall in volumes to 2,999 GWh. Corporate volumes fell 5 percent, while lower irrigation demand reduced agri-sales by 25 percent. Sales to large businesses were down slightly, while sales to homes and small businesses rose.

Meridian described its current hydro storage as good and noted that January generation and wholesale prices had been strong, with irrigation and air conditioning load driving demand.

The restart of the fourth potline at the smelter had also increased national demand by about 1 percent.

In Australia, generation volumes during the first-half were 37 percent higher than a year earlier at 419 GWh. The firm acquired three New South Wales hydro plants from Trustpower a year ago. It also entered power purchase agreements with wind and solar providers Tilt Renewables, CWP Renewables and Total Eren to help supply its Powershop business there.

Retail electricity sales there were about 3.2 percent lower than a year earlier at 280 GWh for the December half year. The company had almost 99,400 retail power accounts at the end of December, about 2,000 more than a year earlier. It has also amassed 12,500 gas connections in the past year.

Australian ebitdaf rose 14 percent to $41 million, despite a $6 million increase in operating costs. Costs rose with the increased customer count, and the introduction of Powershop’s gas offering in Victoria.

The company noted that persistent drought in New South Wales has led to lower than expected hydro generation volumes this year and potentially into the 2020 financial year as well.

Revenue from the Flux operation in the UK, where the firm has licenced its Powershop product to npower, rose to $6 million from $4 million a year earlier.

Meridian said the UK business made a “growing” contribution to group ebitdaf in the period.

Meridian will pay an interim dividend of 5.7 cents and a special dividend of 2.44 cents on April 17. That is up from 5.38 cents and 2.44 cents respectively a year earlier.

It shares were unchanged at $3.72, having gained almost 31 percent the past year.

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