The energy SOEs produced mixed results for the half-year to December 31, 2008, reflecting a combination of high wholesale electricity prices, expanded generation portfolios and the variable impact of new international accounting standards on the bottom line. Meridian, Genesis, MightyRiverPower (MRP), and the national grid company, Transpower, all tabled their half-year financial results in Parliament last Friday.

Meridian was the most affected by the dry 2008 winter, recording reduced profits on all key measures of trading performance, and a bottom-line loss of $20.5m after unrealised losses on future contracts and financial derivatives. “Underlying” profit - a measure produced by Meridian but not other SOE’s - for the half was $85.0m, down $14.9m on the $99m recorded in the equivalent prior half.

MightyRiverPower recorded a $121.4m hit to the bottom line from unrealised losses on the fair value of its un-hedged interest rate derivatives, and a net profit of $30.7m, compared with $82.9m for the first half of 2007/08. The MRP result was a record for the half in EBITDAF terms, with earnings at $234.5m, compared with $175.1m in the same period a year earlier. This was mainly due to the new 100MW Kawerau geothermal plant starting production. MRP displaced Contact Energy as the country’s largest geothermal generator during the half, and Kawerau helped boost total generation by 23% over the comparable period. Genesis Energy was least affected by changes in fair value of financial derivatives, recording improved EBITDAF of $121.9m ($104.7m in the same period a year earlier), and a net profit of $48.9m ($31.4m). Meridian split out its wholesale and retail segments for the first time in the latest results. They showed strong performance in the wholesale side of the business with EBITDAF of $309.1 m, reflecting rocketing wholesale market prices relating to the dry 2008 winter, and a trading loss of $23.6m on its retail side.

Transpower’s high exposure to large-scale financial instruments also pushed the company into a bottom line loss of $108.5m, reflecting unrealised losses of $251.5m caused by the IFRS accounting rules. Earnings before these unrealised losses were counted stood at $89.9m for the half-year, compared with $80.2m a year earlier.

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