Meridian Energy Limited 2019 Interim Results

PG 1

Meridian Energy continues earnings growth
20 February 2019
Meridian Energy saw its earnings (EBITDAF) for the six months ended 31 December 2018 increase 18%
compared to the prior corresponding period.
Meridian’s Chief Executive Neal Barclay says, “Good hydro storage has seen our New Zealand
generation volumes increase 10% on the prior period, supporting higher contracted sales”.
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 Board are pleased to announce an increase to the interim dividend of 6% over last year.
Meridian has also declared an interim special dividend of 2.44 cents per share ($62.5 million) under the
Company’s capital management programme to return $875 million to shareholders through to 2022.
$500 million has now distributed since the capital management programme commenced in August 2015.
Meridian continues to experience good customer growth with connection numbers up by 14,000 and
2,000 in the last year in both New Zealand and Australia respectively.
ENDS
Neal Barclay
Chief Executive
Meridian Energy Limited


For investor relations queries, please contact:
Owen Hackston
Investor Relations Manager
021 246 4772
For media queries, please contact:
Polly Atkins
External Communications Specialist
021 174 1715

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MERIDIAN ENERGY LIMITED
CONDENSED
INTERIM FINANCIAL
STATEMENTS
FOR THE SIX MONTHS TO 31 DECEMBER 2018

CONDENSED INTERIM FINANCIAL STATEMENTS
Income Statement ..............................................................2
The income earned and operating expenditure incurred
by the Meridian Group during the six months.
Comprehensive Income Statement ........................................2
Items of income and operating expense that are not recognised
in the income statement and hence taken to reserves in equity.
Balance Sheet ......................................................................3
A summary of the Meridian Group assets and liabilities
at the end of the six months.
Changes in Equity ...............................................................4
Components that make up the capital and reserves of the
Meridian Group and the changes of each component during
the six months.
Cash Flows ..........................................................................5
Cash generated and used by the Meridian Group.
NOTES TO THE CONDENSED
INTERIM FINANCIAL STATEMENTS
About this report .................................................................6
Significant matters in the six months ....................................7
A. Financial performance
A1. Segment performance ....................................................8
A2. Income ........................................................................10
A3. Expenses .....................................................................11
A4. Ta xation ......................................................................11
B. Assets used to generate and sell electricity
B1. Property, plant and equipment .......................................12
B2. Intangible assets ..........................................................12
B3. Customer contract assets..............................................12
C. Managing funding
C1. Capital management .....................................................13
C2. Earnings per share ........................................................13
C3. Dividends ....................................................................13
C4. Borrowings ..................................................................14
D. Financial instruments
D1. Financial instruments ....................................................16
E. Group structure and other
E1. Group structure ............................................................19
E2. Commitments ..............................................................19
E3. Contingent assets and liabilities .....................................19
E4. Subsequent events .......................................................19
E5. Changes in financial reporting standards ........................19
SIGNED REPORT
Independent auditor’s review Report ..................................20
MERIDIAN ENERGY LIMITED
CONDENSED INTERIM FINANCIAL STATEMENTS
AS AT AND FOR THE SIX MONTHS TO 31 DECEMBER 2018
KEY
KEY JUDGEMENTS
AND ESTIMATES
FINANCIALS
00:01

INCOME STATEMENT FOR THE SIX MONTHS TO 31 DECEMBER 2018
NOTE
UNAUDITED
2018
$M
UNAUDITED
2017
$M
Operating revenueA2 1,691 1,441
Operating expensesA3(1,302) (1,112)
Earnings before interest, tax, depreciation, amortisation,
changes in fair value of hedges and other significant items (EBITDAF) 389 329
Depreciation and amortisationB1, B2(137) (134)
Impairment of assetsA3 – (2)
Gain on sale of assetsA2 – 6
Net change in fair value of electricity and other hedgesD1 20 (2)
Operating profit 272 197
Finance costsA3(4 3) (41)
Net change in fair value of treasury instrumentsD1(15) (2)
Net profit before tax 214 154
Income tax expenseA4(62) (45)
Net profit after tax attributed to the shareholders of the parent company 152 109
Profit attributed to the shareholders of the parent company 152 109
Earnings per share (EPS) attributed to ordinary equity holders of the parent Cents Cents
Basic and diluted earnings per shareC25.94.3
COMPREHENSIVE INCOME
STATEMENT FOR THE SIX MONTHS TO 31 DECEMBER 2018
UNAUDITED
2018
$M
UNAUDITED
2017
$M
Net profit after tax 152 109
Items that will not be reclassified to profit or loss:
Net gain on cash flow hedges –
1
Exchange differences arising from translation of foreign operations(19)
15
Other comprehensive income for the period, net of tax(19)
16
Total comprehensive income for the period, net of tax
attributed to shareholders of the parent company 133 125
The notes to the condensed interim financial statements form an integral part of these financials statements.
Meridian Interim Report for the six months ended 31 December 2018
00:02

BALANCE SHEET AS AT 31 DECEMBER 2018
NOTE
UNAUDITED
31 DEC 2018
$M
UNAUDITED
31 DEC 2017
$M
AUDITED
30 JUN 2018
$M
Current assets
Cash and cash equivalents 78 108 60
Trade receivables 259 304 261
Customer contract assetsB3 20 19 19
Financial instrumentsD1 106 92 77
Other assets 35 30 32
Total current assets 498 553 449
Non-current assets
Property, plant and equipmentB1 7,809 7,8 7 1 7,9 41
Intangible assetsB2 59 58 60
Deferred tax 38 46 46
Financial instrumentsD1 162 166 136
Total non-current assets 8,068 8,141 8,183
Total a ssets 8,566 8,694 8,632
Current liabilities
Payables and accruals 293 317 267
Employee entitlements 11 11 16
Customer contract liabilities 15 11 14
Current portion of term borrowingsC4 512 190 450
Finance lease payable 1 1 1
Financial instrumentsD1 52 75 52
Current tax payable 30 19 43
Total current liabilities 914 624 843
Non-current liabilities
Term borrowingsC4 1,049 1,176 1,023
Deferred tax 1,668 1,700 1,683
Provisions 9 9 9
Finance lease payables 45 47 47
Financial instrumentsD1 151 121 129
Term payables 66 84 75
Total non-current liabilities 2,988 3,137 2,966
Total liabilities 3,902 3,761 3,809
Net assets 4,664 4,933 4,823
Shareholders’ equity
Share capital 1,598 1,597 1,598
Reserves 3,066 3,336 3,225
Total shareholders’ equity 4,664 4,933 4,823
For and on behalf of the Board of Directors who authorised the issue of the condensed interim financial statements on 19 February 2019.
CHRIS MOLLER, Board Chair JAN DAWSON, Chair, Audit and Risk Committee
The notes to the condensed interim financial statements form an integral part of these financials statements.
FINANCIALS
00:03

CHANGES IN EQUITY FOR THE SIX MONTHS TO 31 DECEMBER 2018
AUDITED
$MNOTE
SHARE
CAPITAL
SHARE
OPTION
RESERVE
REVALUATION
RESERVE
FOREIGN
CURRENCY
TRANSLATION
RESERVE
CASH
FLOW
HEDGE
RESERVE
RETAINED
EARNINGS
SHAREHOLDER
EQUITY
Balance at 1 July 2017 1,598 1 4,249 (27) (1) (725) 5,095
Net profit for the year – – – – – 201 201
Other comprehensive income
Net gain on cash flow hedges – – – – 2 – 2
Exchange differences from translation
of foreign operations – – – 11 – – 11
Total comprehensive income for the year,
net of tax – – – 11 2 201 214
Dividends paid – – – – – (486) (486)
Balance at 30 June 2018 and 1 July 2018 1,598 1 4,249 (16) 1 (1,010) 4,823
UNAUDITED
Net profit for the period – – – – – 152 152
Other comprehensive income
Exchange differences from translation
of foreign operations – – – (19) – – (19)
Total comprehensive income for the period,
net of tax – – – (19) – 152 133
Dividends paidC3 – – – – – (292) (292)
Balance at 31 December 2018
1,598 1 4,249 (35) 1 ( 1,150) 4,664
UNAUDITED
$MNOTE
SHARE
CAPITAL
SHARE
OPTION
RESERVE
REVALUATION
RESERVE
FOREIGN
CURRENCY
TRANSLATION
RESERVE
CASH
FLOW
HEDGE
RESERVE
RETAINED
EARNINGS
SHAREHOLDER
EQUITY
Balance at 1 July 2017 1,598 1 4,249 (27) (1) (725) 5,095
Net profit for the period – – – – – 109 109
Other comprehensive income
Net gain on cash flow hedges – – – – 1 – 1
Exchange differences from translation
of foreign operations – – – 15 – – 15
Total comprehensive income for the year,
net of tax – – – 15 1 109 125
Share-based transactions(1) – – – – – (1)
Dividends paidC3 – – – – – (286) (286)
Balance at 31 December 2017 1,597 1 4,249 (12) – (902) 4,933
The notes to the condensed interim financial statements form an integral part of these financials statements.
Meridian Interim Report for the six months ended 31 December 2018
00:04

CASH FLOWS FOR THE SIX MONTHS TO 31 DECEMBER 2018
NOTE
UNAUDITED
2018
$M
UNAUDITED
2017
$M
Operating activities
Receipts from customers 1,695 1,374
Payments to suppliers and employees(1,310) (1,101)
Interest paid(41) (38)
Income tax paid(82) (73)
Operating cash flows 262 162
Investment activities
Sale of property, plant and equipment – 12
Purchase of property, plant and equipment(23) (18)
Purchase of intangible assets(12) (10)
Investing cash flows(35) (16)
Financing activities
Term borrowings drawn 89 170
Term borrowings repaid(5) (5)
Dividends C3(292) (286)
Financing cash flows(208) (121)
Net increase in cash and cash equivalents 19 25
Cash and cash equivalents at beginning of the six months 60 80
Effect of exchange rate changes on net cash(1) 3
Cash and cash equivalents at end of the six months
78 108
The notes to the condensed interim financial statements form an integral part of these financials statements.
FINANCIALS
00:05

Meridian Energy Limited is a for-profit entity domiciled and
registered under the Companies Act 1993 in New Zealand. It is
an FMC reporting entity for the purposes of the Financial Markets
Conduct (FMC) Act 2013. Meridian’s core business activities
are the generation, trading and retailing of electricity and the
sale of complementary products and services. The registered
office of Meridian is 33 Customhouse Quay, Wellington.
Meridian Energy Limited is dual listed on the New Zealand
Stock Exchange (NZX) and the Australian Securities Exchange
(ASX). As a Mixed Ownership Company, majority owned by
Her Majesty the Queen in Right of New Zealand, it is bound
by the requirements of the Public Finance Act 1989.
These unaudited condensed interim financial statements for
the six months ended 31 December 2018 have been prepared:
• using Generally Accepted Accounting Practice (NZ GAAP)
in New Zealand, accounting policies consistent with
International Financial Reporting Standards (IFRS) and the
New Zealand equivalents (NZ IFRS) and in accordance with
IAS 34: Interim Financial Reporting and NZ IAS 34: Interim
Financial Reporting, as appropriate for a for-profit entity;
• in accordance with the requirements of the Financial
Markets Conduct Act 2013;
• on the basis of historical cost, modified by revaluation
of certain assets and liabilities; and
• in New Zealand dollars (NZD). The principal functional
currency of international subsidiaries is Australian
dollars. The closing rate at 31 December 2018 was 0.9529
(December 2017: 0.9084, 30 June 2018: 0.9138).
All values are rounded to millions ($M) unless otherwise stated.
ACCOUNTING POLICIES. The accounting policies, methods
of computation and classification set out in the Group financial
statements for the year ended 30 June 2018 have been applied
consistently to all periods presented in the condensed interim
financial statements with the exception that NZ IFRS 9 Financial
Instruments has been adopted during the Period.
Under NZ IFRS 9, the measurement of our provision for doubtful
debts has changed from an incurred loss model to an expected
credit loss model.
This approach has not changed the overall level of the doubtful
debt provision.
No other adjustments or restatements were required as a result
of adopting NZ IFRS 9 and there was no impact to the primary
statements on pages 2 to 5.
The application of further new or amended standards has no
material impact on the amounts recognised in the condensed
interim financial statements.
JUDGEMENTS AND ESTIMATES. The basis of key
judgements and estimates have not changed from those used
in preparing the financial statements for the year ended
30 June 2018.
BASIS OF CONSOLIDATION. The condensed interim
Group financial statements comprise the financial statements
of Meridian Energy Limited and its subsidiaries and
controlled entities.
IN THIS SECTION. The summary notes to the condensed interim financial statements include information which is
considered relevant and material to assist the reader in understanding changes in Meridian’s financial position or performance.
Information is considered relevant and material if:
• the amount is significant because of its size and nature;
• it is important for understanding the results of Meridian;
• it helps to explain changes in Meridian’s business; or
• it relates to an aspect of Meridian’s operations that is important to future performance.
ABOUT THIS REPORT
Meridian Interim Report for the six months ended 31 December 2018
00:06

HYDRO INFLOWS. The first half of the financial year
began with above average hydro storage, but a combination
of drier conditions and strong winter demand meant these
levels deteriorated. In October the combination of continued
low storage levels, gas restrictions and the highest October
demand ever saw wholesale prices rise to extraordinary
levels and resulted in calling of the electricity swaption.
Hydro inflows picked up in November and December
and coincided with significantly lower irrigation demand,
however prices remained high as a result of restricted
gas supply. This has a positive impact on revenues
received from New Zealand generation production but
negatively impacts the cost to supply contracted physical
and financial electricity sales.
NON-GAAP MEASURES. Meridian refers to non-GAAP
financial measures within these condensed interim financial
statements and accompanying notes. The limited use of
non-GAAP measures is intended to supplement GAAP measures
to provide readers with further information to broaden their
understanding of Meridian’s financial performance and position.
They are not a substitute for GAAP measures. As these measures
are not defined by NZ GAAP, IFRS, or any other body of accounting
standards, Meridian’s calculations may differ from similarly titled
measures presented by other companies. The measures are
described below, including page references for reconciliations
to the condensed interim financial statements.
EBITDAF. Earnings before interest, tax, depreciation,
amortisation, change in fair value of hedges and other
significant items.
EBITDAF is reported in the income statement allowing the
evaluation of Meridian’s operating performance without the
non-cash impact of depreciation, amortisation, fair value
movements of hedging instruments and other one off
and/or infrequently occurring events as well as the effects
of Meridian’s capital structure and tax position. This allows
a better comparison of operating performance with that of
other electricity industry companies than GAAP measures
that include these items.
ENERGY MARGIN. Energy margin provides a measure
of financial performance that, unlike total revenue, accounts
for the variability of the wholesale electricity market and the
broadly offsetting impact of the wholesale prices on the cost
of Meridian’s retail electricity purchases and revenue from
generation. Meridian uses the measure of energy margin
within its segmental financial performance in note A1
Segment performance on page 8.
NET DEBT. Net debt is a metric commonly used by investors
as a measure of Meridian’s indebtedness that takes account
of liquid financial assets. Meridian uses this measure within
its capital management and this is outlined in note C1 Capital
management on page 13.
IN THIS SECTION. This section outlines significant matters which have impacted Meridian’s financial performance
and an explanation of non-GAAP measures used within the notes to the condensed interim financial statements.
SIGNIFICANT MATTERS
IN THE SIX MONTHS
FINANCIALS
00:07

A
FINANCIAL PERFORMANCE
IN THIS SECTION. This section explains the financial performance of Meridian, providing additional information about
individual items in the income statement, including:
a) accounting policies, judgements and estimates that are relevant for understanding items recognised in the income
statement; and
b) analysis of Meridian’s performance for the 6 months by reference to key areas including: performance by operating
segment, revenue, expenses and taxation.
A1 SEGMENT PERFORMANCE. The Chief Executive
(the chief operating decision-maker) monitors the operating
performance of each segment for the purpose of making
decisions on resource allocation and strategic direction.
The Chief Executive considers the business according to
the nature of the products and services and the location of
operations, as set out below:
New Zealand Wholesale
• Generation of electricity and its sale into the New Zealand
wholesale electricity market.
• Purchase of electricity from the wholesale electricity
market and its sale to the New Zealand Retail segment
and to large industrial customers, including New Zealand
Aluminium Smelter (NZAS) representing the equivalent
of 40% (31 December 2017: 43%) of Meridian’s New Zealand
generation production.
• Development of renewable electricity generation
opportunities in New Zealand.
New Zealand Retail
• Retailing of electricity and complementary products through
two brands (Meridian and Powershop) in New Zealand.
• Electricity sold to residential, business and industrial
customers on fixed price variable volume contracts is
purchased from the Wholesale segment at an average
annual fixed price of $74–$79 per megawatt hour (MWh) and
electricity sold to business and industrial customers on spot
(variable price) agreements is purchased from the Wholesale
segment at prevailing wholesale spot market prices.
• Agency margin from spot sales is included within
“Contracted sales, net of distribution costs”.
• The transfer price is set in a similar manner to transactions
with third parties.
• Powershop New Zealand provide front line customer and
back office services for Powershop Australia. Revenue
of $2 million has been recorded in ‘other revenue’ and is
eliminated on Group consolidation.
Australia
• Generation of electricity from Meridian’s two wind farms
and three hydro power stations for sale into the Australian
wholesale electricity market.
• Retailing of electricity through the Powershop brand
in Australia.
• Development of renewable electricity generation options
in Australia.
Other and unallocated
• Other operations, that are not considered reportable
segments, including licensing of the Flux Federation
developed electricity and gas retailing platform.
• Activities and centrally based costs that are not directly
allocated to other segments.
The financial performance of the operating segments is assessed
using energy margin and EBITDAF (see page 7 for a definition of
these measures) before unallocated central corporate expenses.
Balance sheet items are not reported to the Chief Executive at
an operating segment level.
Meridian Interim Report for the six months ended 31 December 2018
00:08

A1 SEGMENT PERFORMANCE continued
NZ WHOLESALENZ RETAILAUSTRALIA
OTHER AND
UNALLOCATEDINTER-SEGMENTGROUP
FOR THE SIX MONTHS TO 31 DECEMBER2018
$M
2017
$M
2018
$M
2017
$M
2018
$M
2017
$M
2018
$M
2017
$M
2018
$M
2017
$M
2018
$M
2017
$M
Contracted sales,
net of distribution costs 249 191 312 328 70 61 – – – – 631 580
Costs to supply customers(1,005) (682) (233) (237) (60) (47) – – 296 274 (1,002) (692)
Net cost of acquired generation 76 31 – – (4) (14) – – – – 72 17
Generation spot revenue 812 553 – – 60 57 – – – – 872 610
Inter-segment electricity sales 296 274 – – – – – – (296) (274) – –
Virtual asset swap margins 6 (4) – – – – – – – – 6 (4)
Other market revenue/(costs) (4) (3) 1 1 – – – – – – (3) (2)
Energy Margin 430 360 80 92 66 57 – – – – 576 509
Other Revenue 2 2 6 5 1 – 13 8 (9) (5) 13 10
Energy transmission expense (63) (60) – – (2) (3) – – – – (65) (6 3)
Gross Margin 369 302 86 97 65 54 13 8 (9) (5) 524 456
Employee expenses (14) (14) (16) (15) (6) (4) (13) (14) – – (49) (47)
Electricity metering expenses – – (16) (15) – – – – – – (16) (15)
Other operating expenses (30) (26) (17) (18) (18) (14) (10) (11) 5 4 (70) (65)
EBITDAF 325 262 37 49 41 36 (10) (17) (4) (1) 389 329
Depreciation and amortisation (137) (134)
Impairment of assets – (2)
Gain on sale of assets – 6
Net change in fair value of
electricity and other hedges 20 (2)
Operating profit 272 197
Finance costs (4 3) (41)
Interest income – –
Net change in fair value
of treasury instruments (15) (2)
Net profit before tax 214 154
Income tax expense (62) (45)
Net profit after tax 152 109
Reconciliation of energy margin
Electricity sales revenue 1,187 942 639 626 148 137 – – (296) (274) 1,678 1,431
Electricity expenses, net of hedging (757) (582) (306) (285) (49) (47) – – 296 274 (816) (6 40)
Electricity distribution expenses – – (253) (249) (33) (33) – – – – (286) (282)
Energy margin 430 360 80 92 66 57 – – – – 576 509
FINANCIALS
00:09

A2 INCOME
6 MONTHS ENDED 31 DECEMBER
OPERATING REVENUE
UNAUDITED
2018
$M
UNAUDITED
2017
$M
Electricity sales to customers 875 852
Electricity generation, net of hedging 803 579
Electricity-related services revenue 4 4
Other revenue 9 6
1,691 1,441
6 MONTHS ENDED 31 DECEMBER
TOTAL REVENUE BY GEOGRAPHIC AREA
UNAUDITED
2018
$M
UNAUDITED
2017
$M
New Zealand 1,535 1,300
Australia 150 137
United Kingdom 6 4
Total operating revenue 1,691 1,441
6 MONTHS ENDED 31 DECEMBER
GAIN ON SALE OF ASSETS
UNAUDITED
2018
$M
UNAUDITED
2017
$M
Gain on sale of property,
plant & equipment – 6
OPERATING REVENUE
Electricity sales to customers
Revenue received or receivable from residential, business and
industrial customers. This revenue is influenced by customer
contract sales prices and their demand for electricity.
Electricity generation, net of hedging
Revenue received from:
• electricity generated and sold into the wholesale markets;
and
• the net settlement of electricity hedges sold on electricity
futures markets, and to generators, retailers and industrial
customers.
This revenue is influenced by the quantity of generation and the
wholesale spot price and is recognised at the time of generation
or hedge settlement.
Meridian Interim Report for the six months ended 31 December 2018
00:10

A3 EXPENSES
6 MONTHS ENDED 31 DECEMBER
OPERATING EXPENSES
UNAUDITED
2018
$M
UNAUDITED
2017
$M
Electricity expenses, net of hedging 816 640
Electricity distribution expenses 286 282
Electricity transmission expenses 65 63
Employee expenses 49 47
Electricity metering expenses 16 15
Other expenses 70 65
1,302 1,112
FINANCE COSTS
UNAUDITED
2018
$M
UNAUDITED
2017
$M
Interest on borrowings 39 37
Interest on electricity option premium 1 1
Interest on finance lease payable 3 3
43 41
IMPAIRMENT OF ASSETS
UNAUDITED
2018
$M
UNAUDITED
2017
$M
Impairment of assets– 2
OPERATING EXPENSES
Electricity expenses, net of hedging
The cost of:
• electricity purchased from wholesale markets to supply
customers;
• the net settlement of buy-side electricity hedges; and
• related charges and services.
Electricity expenses are influenced by quantity and timing of
customer consumption and the wholesale spot price.
Electricity distribution expenses
The cost of distribution companies transporting electricity
between the national grid and customers’ properties.
Electricity transmission expenses
Meridian’s share of the cost of the high voltage direct current
(HVDC) link between the North and South Islands of New Zealand
and the cost of connecting Meridian’s generation sites to the
national grid by grid providers.
Employee expenses
Provision is made for benefits owing to employees in respect of
wages and salaries, annual leave, long service leave and employee
incentives for services rendered. Provisions are recognised when
it is probable they will be settled and can be measured reliably.
They are carried at the remuneration rate expected to apply at
the time of settlement.
Impairment of non-financial assets
During the June 2018 financial year the book value of Central Wind
consent was impaired as development at this location is unlikely
to occur prior to the expiry of the exisiting resource consent.


A4 TAXATION
6 MONTHS ENDED 31 DECEMBER
INCOME TAX EXPENSE
UNAUDITED
2018
$M
UNAUDITED
2017
$M
Current income tax charge 76 63
Deferred tax (14) (18)
Income tax expense 62 45
Reconciliation to profit before tax
Profit before tax 214 154
Income tax at applicable rates 60 44
Expenditure not deductible for tax 2 1
Income tax expense 62 45
INCOME TAX EXPENSE. Income tax expense is the
income tax assessed on taxable profit for the period. Taxable
profit differs from profit before tax reported in the income
statement as it excludes items of income and expense that are
taxable or deductible in other periods and also excludes items
that will never be taxable or deductible. Meridian’s liability
for current tax is calculated using tax rates that have been
enacted or substantively enacted at balance date, being 28%
for New Zealand and 30% for Australia.
Income tax expense components are current income tax and
deferred tax.
FINANCIALS
00:11

B
ASSETS USED TO GENERATE AND SELL ELECTRICITY
IN THIS SECTION. This section shows the assets Meridian uses in the production and sale of electricity
to generate operating revenues. In this section of the summary notes there is information about:
a) property, plant and equipment, and
b) intangible assets, and
c) customer contract assets
B1 PROPERTY, PLANT AND EQUIPMENT
POSITION AS AT
UNAUDITED
31 DEC 2018
$M
UNAUDITED
31 DEC 2017
$M
AUDITED
30 JUN 2018
$M
Opening net book value 7,9 41 7,9 6 1 7,9 6 1
Additions 19 12 36
Transfers –
intangible assets – – (2)
Disposals – – (10)
Purchase of Subsidiary – – 184
Foreign currency
exchange rate
movements(26) 22 19
Depreciation expense(125) (124) (247)
Closing net book value 7,809 7,8 7 1 7,9 41
B2 INTANGIBLE ASSETS
POSITION AS AT
UNAUDITED
31 DEC 2018
$M
UNAUDITED
31 DEC 2017
$M
AUDITED
30 JUN 2018
$M
Opening Net Book value 60 58 58
Additions 11 10 21
Transfers – property,
plant and equipment
– – 2
Amortisation expense
(12) (10) (21)
Closing net book value 59 58 60
RECOGNITION AND MEASUREMENT. Generation
structures and plant assets (including land and buildings) are
held on the balance sheet at their fair value at the date of
revaluation, less any subsequent depreciation and impairment
losses. All other property, plant and equipment are stated
at historical cost less accumulated depreciation and any
accumulated impairment losses.

Fair value and revaluation of generation structures and plant
Meridian engaged an independent valuer to assess its generation
structures and plant assets at 30 June 2018 using capitalisation
of earnings and discounted cashflows (DCFs) when determining
a valuation range. The review indicated that the carrying value
was a fair representation of fair value, and for this reason
Meridian has not completed a full revaluation of this asset class.
A review and assessment of key valuation inputs included in that
valuation has been undertaken as at 31 December 2018, indicating
that there has been no material change in fair value.
B3 CUSTOMER CONTRACT ASSETS
POSITION AS AT
CUSTOMER CONTRACT
ASSETS
UNAUDITED
31 DEC 2018
$M
UNAUDITED
31 DEC 2017
$M
AUDITED
30 JUN 2018
$M
Opening balance 19 18 18
Deferred during the
period
Discounts and up-front
credits to customers 6 5 11
Sales costs
2 2 3
8 7 14
Released to the
income statement
during the period
Electricity sales to
customers(5) (4) (9)
Employee expenses – – (1)
Other expenses(2) (2) (3)
(7) (6) (13)
Closing balance
20 19 19
Meridian Interim Report for the six months ended 16 December 9360
00:12

C
MANAGING FUNDING
IN THIS SECTION. This section explains how Meridian manages its capital structure and working capital,
the various funding sources, and how dividends are returned to shareholders. In this section of the summary notes
there is information about:
a) equity and dividends; and
b) net debt.
C1 CAPITAL MANAGEMENT
Capital risk management objectives
Meridian’s objective when managing capital is to provide
appropriate returns to shareholders whilst maintaining a capital
structure that safeguards its ability to remain a going concern
and optimises the cost of capital.
Capital is defined as the combination of shareholders’ equity,
reserves and net debt.
Meridian manages its capital through various means, including:
• adjusting the amount of dividends paid to shareholders;
• raising or returning capital; and
• raising or repaying debt.
Meridian regularly monitors its capital requirements using
various measures that consider debt facility financial covenants
and credit ratings. The key measures being net debt to EBITDAF
and interest cover. The principal external measure is Meridian’s
credit rating from Standard and Poor’s.
Meridian is in full compliance with debt facility financial covenants.
POSITION AS AT
NOTE
UNAUDITED
31 DEC 2018
$M
UNAUDITED
31 DEC 2017
$M
AUDITED
30 JUN 2018
$M
Share capital
1,598 1,5971,598
Retained earnings
(1,150) (902) (1,010)
Other reserves
4,216 4,238 4,235
4,664 4,933 4,823
Drawn
borrowingsC4 1,505 1,331 1,428
Finance lease
payable 46 48 48
Less: cash and
cash equivalents
(78) (108) (60)
1,473 1,271 1,416
Net capital 6,137 6,204 6,239
C2 EARNINGS PER SHARE
BASIC AND DILUTED EARNINGS
PER SHARE (EPS)
UNAUDITED
31 DEC 2018
UNAUDITED
31 DEC 2017
Profit after tax attributable
to shareholders of the parent
company ($M) 152 109
Weighted average number of shares
used in the calculation of EPS

2,563,000,000 2,563,000,000
Basic and diluted EPS
(cents per share) 5.9 4.3
C3 DIVIDENDS
6 MONTHS ENDED 31 DECEMBER
DIVIDENDS DECLARED AND PAID
UNAUDITED
2018
$M
UNAUDITED
2017
$M
Final ordinary and special dividend 2018:
11.38cps (2017: 11.14cps) 292 286
Total dividends paid 292 286
DIVIDENDS DECLARED AND NOT RECOGNISED AS A LIABILITY
Interim ordinary dividend 2019: 5.70cps
(2018: 5.38cps) 146 138
Interim special dividend 2019: 2.44cps
(2018: 2.44cps) 63 63
Dividend Policy
Meridian’s dividend policy considers free cash flow, working
capital requirements, the medium-term investment programme,
maintaining a BBB+ credit rating and risks from short and
medium-term economic, market and hydrology conditions.
Subsequent event – dividend declared
On 19 February 2019 the Board declared a partially imputed
interim ordinary dividend of 5.70 cents per share. Additionally
the Board declared an un-imputed special dividend of 2.44 cents
per share.
FINANCIALS
00:13

C4 BORROWINGS
POSITION AS AT
UNAUDITED
31 DEC 2018
UNAUDITED
31 DEC 2017
AUDITED
30 JUN 2018
GROUP (NZ$M)
CURRENCY
BORROWED IN
DRAWN
FACILITY
AMOUNT
TRANS-
ACTION
COSTS
FAIR
VALUE
ADJUST-
MENT
CARRYING
AMOUNT
DRAWN
FACILITY
AMOUNT
TRANS-
ACTION
COSTS
FAIR
VALUE
ADJUST-
MENT
CARRYING
AMOUNT
DRAWN
FACILITY
AMOUNT
TRANS-
ACTION
COSTS
FAIR
VALUE
ADJUST-
MENT
CARRYING
AMOUNT
Current borrowings
Unsecured
borrowings
NZD
233 (1) – 232 191 (1) – 190 169 (1) – 168
Unsecured
borrowings
USD
272 – 8 280 – – – – 272 – 10 282
Total current
borrowings 505 (1) 8 512 191 (1) – 190 441 (1) 10 450
Non-current
borrowings
Unsecured
borrowings
NZD
840 (2) – 838 700 (2) – 698 821 (3) – 818
Unsecured
borrowings
USD
160 – 51 211 440 (1) 39 478 166 – 39 205
Total
non-current
borrowings 1,000 (2) 51 1,049 1,140 (3) 39 1,176 987 (3) 39 1,023
Total borrowings 1,505 (3) 59 1,561 1,331 (4) 39 1,366 1,428 (4) 49 1,473
Meridian has committed bank facilities of $725 million of which
$300 million were undrawn at 31 December 2018. The expiry of
these facilities range from January 2019 to April 2026.
Borrowings, measurement and recognition
Borrowings are recognised initially at the fair value of the drawn
facility amount, net of transaction costs paid. Borrowings are
subsequently stated at amortised cost using the effective interest
method. Any borrowings which have been designated as hedged
items (USD borrowings) are carried at amortised cost plus a fair
value adjustment under hedge accounting requirements. Any
borrowings denominated in foreign currencies are retranslated to
the functional currency at each reporting date. Any retranslation
effect is included in the “Fair value adjustment” column in the
above movement table.
Meridian uses cross currency interest rate swap (CCIRS) hedge
contracts to manage its exposure to interest rates and borrowings
sourced in currencies different to that of the borrowing entity’s
reporting currency.
Fair value of items held at amortised cost
POSITION AS AT
UNAUDITED
31 DEC 2018
$M
UNAUDITED
31 DEC 2017
$M
AUDITED
30 JUN 2018
$M
UNAUDITED
31 DEC 2018
$M
UNAUDITED
31 DEC 2017
$M
AUDITED
30 JUN 2018
$M
NZ$M CARRYING VALUE FAIR VALUE
Retail bonds 500 300 500 523 312 514
Floating rate notes 100 100 100 101 102 102
Unsecured term loan
(EKF facility) 75 85 80 80 92 86
Within term borrowings there are longer dated, fixed-interest-rate
instruments which are not in hedge accounting relationships.
The carrying values and estimated fair values of these instruments
are noted in the table above.
The fair value of Meridian’s retail bonds and renewable energy
bonds is calculated by reference to quoted prices on the NZX.
The fair value of Meridian’s EKF Facility (provided by the official
export credit agency of Denmark) is calculated using a discounted
cash flow calculation. These are classified as Level 2 instruments
within the fair value hierarchy. A lack of liquidity on the NZX
precludes them from being classified as Level 1 (a definition of
levels is included in D1 Financial instruments on page 16).
Carrying value approximates fair value for all other instruments
within term borrowings.
Meridian Interim Report for the six months ended 31 December 2018
00:14

C4 BORROWINGS continued
Reconciliation of liabilities arising from financing activities
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non–cash changes.
UNAUDITED
31 DEC 2018
GROUP NZ$M
BALANCE AT
1 JULY 2018
TERM
BORROWINGS
DRAWN
TERM
BORROWINGS
REPAID
FAIR VALUE
ADJUSTMENTS
FOREIGN
EXCHANGE
TRANSACTION
COSTS PAID &
ACCRUED
FINANCE
LEASE PAID
BALANCE AT
31 DEC 2018
Unsecured borrowings – NZD 986 89 (5) – – – – 1,070
Unsecured borrowings – USD 487 – – (10) 14 – – 491
Finance lease 48 – – – (2) – 46
Total 1,521 89 (5) (10) 12 – – 1,607
AUDITED
30 JUN 2018
GROUP NZ$M
BALANCE AT
1 JULY 2017
TERM
BORROWINGS
DRAWN
TERM
BORROWINGS
REPAID
FAIR VALUE
ADJUSTMENTS
FOREIGN
EXCHANGE
TRANSACTION
COSTS PAID &
ACCRUED
FINANCE
LEASE PAID
BALANCE AT
30 JUN 2018
Unsecured borrowings – NZD 725 462 (200) – – (1) – 986
Unsecured borrowings – USD 467 – – 12 7 1 – 487
Finance lease 47 – – – 2 – (1) 48
Total
1,239 462 (200) 12 9 – (1) 1,521
FINANCIALS
00:15

D
FINANCIAL INSTRUMENTS
IN THIS SECTION. In this section of the summary notes there is information:
a) analysing financial (hedging) instruments used to manage risk; and
b) outlining Meridian’s fair value techniques and key inputs.
D1 FINANCIAL INSTRUMENTS
FAIR VALUE OF HEDGING FINANCIAL
INSTRUMENTS.
The recognition and measurement of
hedging financial instruments requires management estimation
and judgement (this is discussed in further detail later in this
note). These estimates can have a significant risk of material
adjustment in future periods. Fair value measurements are
grouped within a three-level fair value hierarchy based on
the observability of valuation inputs (described opposite).
• Level 1 Inputs – Quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity
can access at the measurement date.
• Level 2 Inputs – Either directly (i.e. as prices) or indirectly
(i.e. derived from prices) observable inputs other than
quoted prices included in Level 1.
• Level 3 Inputs – Inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
FAIR VALUE ON THE
BALANCE SHEET
FAIR VALUE
MOVEMENTS IN THE
INCOME STATEMENT
UNAUDITED
31 DEC 2018
UNAUDITED
31 DEC 2017
AUDITED
30 JUN 2018
UNAUDITED
31 DEC 2018
UNAUDITED
31 DEC 2017
LEVEL
ASSETS
$M
LIABILITIES
$M
ASSETS
$M
LIABILITIES
$M
ASSETS
$M
LIABILITIES
$M$M$M
Cross currency interest rate swap
(CCIRS) – fair value hedge25–21(4)4–––
CCIRS – cash flow hedge2(1)–(2)–(1)–––
CCIRS – foreign exchange
retranslation255–22–44–––
Interest rate swap (IRS)216(130)12(112)14(114)(15)(2)
Treasury hedges75(130)53(116)61(114)(15)(2)
Foreign exchange hedges2––––––––
Market traded electricity hedges131(8)22(27)30(9)43
Other electricity hedges327(59)42(26)13(52)63
Electricity options382–95–87–(4)(3)
Large scale generation certificates
(LGC) – Holdings created from wind
farm generation123–44–17–(13)2
LGC – forward and option contracts230(6)2(27)5(6)27(7)
Electricity and other hedges193(73)205(80)152(67)20(2)
Total hedges268(203)258(196)213(181)5(4)
Meridian Interim Report for the six months ended 16 December 9360
00:16

D1 FINANCIAL INSTRUMENTS continued
Settlements
The following provides a summary of the settlements through EBITDAF for financial instruments:
UNAUDITED
2018
UNAUDITED
2017
$M
ELECTRICITY
HEDGES LGCS
ELECTRICITY
OPTIONS TOTAL
ELECTRICITY
HEDGES LGCS
ELECTRICITY
OPTIONSTOTAL
Operating revenue(6 4) 22 – (42) (34) 28 – (6)
Operating expenses 96 (6) 9 99 30 (5) 3 28
Total settlements in EBITDAF 32 16 9 57 (4) 23 3 22
Level 3 financial instrument analysis
The following provides a summary of the movements through EBITDAF and movements in the fair value of level three financial instruments:
UNAUDITED
2018
UNAUDITED
2017
$M
ELECTRICITY
HEDGES
ELECTRICITY
OPTIONS TOTAL
ELECTRICITY
HEDGES
ELECTRICITY
OPTIONS TOTAL
Electricity and other hedges settled in EBITDAF:
Operating revenue(64)–(64)(13)–(13)
Operating expenses96910537340
Total settlements in EBITDAF3294124327
Net change in fair value of electricity
and other hedges:
Remeasurement3944327–27
Hedges settled(32)(9)(41)(24)(3)(27)
Total net change in fair value of electricity
and other hedges7(5)23(3)–
Balance at the beginning of the period(39)87481298110
Fair value movements7(5)23(3)–
Electricity hedges acquired1–1
Balance at the end of the year(32)82501695111
FINANCIALS
00:17

FAIR VALUE TECHNIQUE AND KEY INPUTS.
In estimating the fair value of an asset or liability, Meridian
uses market-observable data to the extent that it is available.
The Audit and Risk Committee of Meridian determines the
overall appropriateness of key valuation techniques and
inputs for fair value measurement. The Chief Financial Officer
explains fair value movements in his report to the Board.
Where the fair value of a financial instrument is calculated
as the present value of the estimated future cash flows of
the instrument (DCFs), a number of inputs and assumptions
are used by the valuation technique. These are:
• forward price curves referenced to the ASX for
electricity, published market interest rates and
published forward foreign exchange rates;
• Meridian’s best estimate of electricity volumes
called over the life of electricity options;
• discount rates based on the forward IRS curve
adjusted for counterparty risk;
• calibration factor applied to forward price curves
as a consequence of initial recognition differences;
• NZAS continues to operate; and
• contracts run their full term.
The table below describes the additional key inputs and techniques used in the valuation of level 2 and 3 financial instruments:
FINANCIAL ASSET
OR LIABILITYDESCRIPTION OF INPUT
RANGE OF SIGNIFICANT
UNOBSERVABLE INPUTS
RELATIONSHIP OF INPUT
TO FAIR VALUE
Electricity hedges
and options,
valued using DCFs
Price, where quoted prices are not
available or not relevant (i.e. for long
dated contracts), Meridian’s best
estimate of long-term forward wholesale
electricity price is used. This is based on a
fundamental analysis of expected demand
and the cost of new supply and any other
relevant wholesale market factors.
$40/MWh to $105/MWh
(in real terms), excludes
observable ASX prices.
An increase in forward
wholesale electricity price
increases the fair value of buy
hedges and decreases the fair
value of sell hedges. A decrease
in forward wholesale electricity
price has the opposite effect.
LGC forward
contracts and
options, valued
using DCFs/
Black-Scholes
Price, based on a forward LGC price
curve from a third-party broker and
benchmarked against market spot prices.
A$16–A$80An increase in the forward LGC
price decreases the fair value
of sell hedges and increases
the fair value of buy hedges.
A decrease in forward LGC
prices has the opposite effect.
Movements in recalibration differences arising from
electricity hedges and options
POSITION AS AT
UNAUDITED
31 DEC 2018
$M
UNAUDITED
31 DEC 2017
$M
AUDITED
30 JUN 2018
$M
Opening difference 5 6 6
Initial differences
on new hedges(6) (1) -
Volumes expired
and amortised (1) (1) (1)
Closing difference(2) 4 5
Initial recognition difference
An initial recognition difference arises when the modelled
value of an electricity hedge differs from the transaction
price (which is the best evidence of fair value). This difference
is accounted for by recalibrating the valuation model by a
fixed percentage to result in a value at inception equal to the
transaction price. This recalibration is then applied to future
valuations over the life of the contract.
The resulting difference shown in the table reflects potential
future gains or losses yet to be recognised in the income
statement over the remaining life of the contract.
D1 FINANCIAL INSTRUMENTS continued
Meridian Interim Report for the six months ended 31 December 2018
00:18

E
GROUP STRUCTURE AND OTHER
E1 GROUP STRUCTURE. No changes occurred to Meridian’s
Group structure in the six months to 31 December 2018.
E2 COMMITMENTS. At 30 June 2018 Meridian Energy Limited
had provided a bank guarantee of A$38 million (30 June 2017:
A$38 million) to the financiers of the purchaser of the Macarthur
Wind Farm, guaranteeing that it will comply with its various
obligations under the Refinancing Coordination Deed. This
guarantee was cancelled on 1 October 2018 and Meridian has
no further obligations.
E3 CONTINGENT ASSETS AND LIABILITIES. The
Ministry of Business, Innovation and Employment’s (MBIE) review
of Meridian’s approach to the application of amounts under the
Holidays Act (2003) remains on going. The review has identified
a potential issue with a specific point of law. Meridian and MBIE
are intending to jointly seek legal clarification and depending
on the outcome, there is a potential underpayment ranging
between $3m and $4m.
Other than the remaining guarantee disclosed in the 30 June 2018
financial statements, there were no other contingent assets or
liabilities at 31 December 2018 (31 Dec 2017: nil, 30 Jun 2018: nil).
E4 SUBSEQUENT EVENTS. On 16 January 2019 Meridian
Energy Limited entered into a new short term bank facility
agreement with a committed limit of NZD400m. The new facility
is related to the re-finance of the USD term borrowings that are
due to mature in April 2019. The new facility may be used for
general corporate purposes.
On 14 February 2019, Meridian priced a United States Private
Placement (“USPP”) transaction, raising USD300m in long term
funding across 10, 12 and 15 year maturities. Meridian has entered
into cross currency interest rate swaps to swap the fixed USD
debt and interest payments to NZD.
Settlement will occur in April 2019 when Meridian will receive
circa NZD439m, with funds to be used to refinance an existing
USPP maturity and for general corporate purposes.
There were no other subsequent events other than dividends
declared on 19 February 2019. Refer to note C3 Dividends for
further details.
E5 CHANGES IN FINANCIAL REPORTING
STANDARDS. In the current period, Meridian has adopted
all mandatory new and amended Standards. The application
of these new and amended Standards has had no material
impact on the amounts recognised or disclosed in the financial
statements. This is the first reporting period Meridian has
reported under NZ IFRS 9 Financial Instruments.
Meridian is not aware of any standards in issue but not yet
effective (other than those listed below) which would materially
impact on the amounts recognised or disclosed in the financial
statements. Meridian intends to adopt when they become
mandatory.
NZ IFRS 16 Leases (effective 1 January 2019) – NZ IFRS 16 will be
effective in Meridian’s 2020 financial year. It will fundamentally
change the way leases are accounted for by lessees. Currently,
leases are accounted for as either on-balance-sheet finance
leases or off-balance-sheet operating leases (by lessees).
Under the new accounting standard, these will be replaced by
a single, on-balance-sheet model for all leases, which is similar
to the current finance lease approach. Meridian is currently
assessing the potential impact of certain lease obligations
which will be capitalised as assets post implementation. It is
not practical to provide a reasonable estimate of the financial
effect until this assessment has been completed.
FINANCIALS
00:19

INDEPENDENT REVIEW REPORT TO THE
SHAREHOLDERS OF MERIDIAN ENERGY LIMITED
We have reviewed the condensed interim financial statements
of Meridian Energy Limited and its subsidiaries (‘the Group’)
which comprise the balance sheet as at 31 December 2018, and
the income statement, statement of comprehensive income,
statement of changes in equity and statement of cash flows
for the six month period ended on that date, and other
explanatory information on pages 2 to 19.
This report is made solely to the company’s shareholders, as a
body. Our review has been undertaken so that we might state
to the company’s shareholders those matters we are required
to state to them in a review report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company’s
shareholders as a body, for our engagement, for this report,
or for the opinions we have formed.
BOARD OF DIRECTORS’ RESPONSIBILITIES.
The Board of Directors are responsible on behalf of the Group
for the preparation and fair presentation of the condensed
interim financial statements, in accordance with NZ IAS 34
Interim Financial Reporting and IAS 34 Interim Financial Reporting
and for such internal control as the Board of Directors determine
is necessary to enable the preparation and fair presentation of
the condensed interim financial statements that are free from
material misstatement, whether due to fraud or error.
The Board of Directors are also responsible for the publication
of the condensed interim financial statements, whether in
printed or electronic form.
OUR RESPONSIBILITIES. The Auditor-General is the
auditor of the Group pursuant to section 5(1)(f ) and section
14 of the Public Audit Act 2001. Pursuant to section 32 of the
Public Audit Act 2001, the Auditor-General has appointed
Trevor Deed of Deloitte Limited to carry out an annual audit
of the Group.
Our responsibility is to express a conclusion on the condensed
interim financial statements based on our review. We conducted
our review in accordance with NZ SRE 2410 Review of Financial
Statements Performed by the Independent Auditor of the Entity
(‘NZ SRE 2410’). NZ SRE 2410 requires us to conclude whether
anything has come to our attention that causes us to believe that
the condensed interim financial statements, taken as a whole,
are not prepared, in all material respects, in accordance with
NZ IAS 34 Interim Financial Reporting and IAS 34 Interim Financial
Reporting. As the auditor of Meridian Energy Limited, NZ SRE 2410
requires that we comply with the ethical requirements relevant
to the audit of the annual financial statements.
A review of the condensed interim financial statements in
accordance with NZ SRE 2410 is a limited assurance engagement.
The auditor performs procedures, primarily consisting of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures.
The procedures performed in a review are substantially less
than those performed in an audit conducted in accordance with
International Standards on Auditing (New Zealand). Accordingly
we do not express an audit opinion on those financial statements.
In addition to this review and the audit of the Group annual
financial statements, we have carried out other assurance
assignments for the Group in the areas of greenhouse gas
inventory and sustainability reporting assurance, audit of
the securities registers, vesting of the executive long-term
incentive plan, the solvency return of Meridian Captive Insurance
Limited and supervisor reporting, which are compatible with
the independence requirements of the Auditor-General, which
incorporate the independence requirements of the External
Reporting Board. These services have not impaired our
independence as auditor of the Group. In addition, principals
and employees of our firm deal with the Group on arm’s length
terms within the ordinary course of trading activities of the Group.
Other than these engagements and arm’s length transactions,
and in our capacity as auditor acting on behalf of the Auditor-
General, we have no relationship with, or interests in, the Group.
CONCLUSION. Based on our review, nothing has come to
our attention that causes us to believe that the condensed
interim financial statements of the Group do not present fairly,
in all material respects, the financial position of the Group as
at 31 December 2018 and its financial performance and cash
flows for the six month period ended on that date in accordance
with NZ IAS 34 Interim Financial Reporting and IAS 34 Interim
Financial Reporting.
TREVOR DEED
for Deloitte Limited
On behalf of the Auditor-General
19 February 2019
WELLINGTON, NEW ZEALAND
This review report relates to the unaudited condensed consolidated interim financial statements of Meridian Energy for the six months ended
31 December 2018 included on Meridian Energy’s website. The Board of Directors are responsible for the maintenance and integrity of Meridian Energy’s
website. We have not been engaged to report on the integrity of Meridian Energy’s website. We accept no responsibility for any changes that may have
occurred to the unaudited condensed consolidated interim financial statements since they were initially presented on the website. The review report
refers only to the unaudited condensed consolidated interim financial statements named above. It does not provide an opinion on any other information
which may have been hyperlinked to/from these unaudited condensed consolidated interim financial statements. If readers of this report are concerned
with the inherent risks arising from electronic data communication they should refer to the published hard copy of the unaudited condensed consolidated
interim financial statements and related review report dated 19 February 2019 to confirm the information included in the unaudited condensed
consolidated interim financial statements presented on this website. Legislation in New Zealand governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
00:20

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Meridian Energy Limited 2019 Interim Results Presentation
5.70

cents per
share
ordinary dividend, a
6%
increase
18%

increase
in interim EBITDAF
5%

increase
in NZ customer numbers

M
A
R
K
E
T

U
P
D
A
T
E

3
Meridian Energy Limited 2019 Interim Results Presentation

N
E
W

Z
E
A
L
A
N
D

W
H
O
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S
A
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Higher wholesale prices since October
2018


 
That marked national storage dropping
below average for the first time since February 2018


 
And commencement of higher
consumption by the Tiwai Point Smelter as new cells were cut in on potline 4


 
With uncertainty around gas supply as
Pohokura offshore capacity was reduced and Maui pipeline issues were discovered


 
Further 30 days of shutdown on Pohokura
offshore wells is expected between February and April 2019


 
Electricity market is experiencing some
periodic thermal plant outages


 
ASX forward price curve has steadily lifted
reflecting the shift in underlying supply demand balance
Higher spot and forward wholesale prices
4
Meridian Energy Limited 2019 Interim Results Presentation
50 70
90
110
130 150
Q1 2019
Q3 2019 Q1 2020 Q3 2020 Q1 2021
Q3 2021 Q1 2022 Q3 2022
$/MWh
OTAHUHU ASX FUTURES SETTLEMENT PRICE
29 June 2018
28 September 2018
31 October 2018
30 November 2018
3 January 2019
31 January 2019
Source: Electricity Authority
0
100
200 300
400
500
600
1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec
$/MWh
OTAHUHU DAILY AVERAGE SPOT PRICE
1H FY19
1H FY18
Source: Meridian

N
E
W

Z
E
A
L
A
N
D

D
E
M
A
N
D



 
Despite lower irrigation volumes in 2018


 
2018 was the second equal warmest year
on record, average temperatures above 2017


 
Underlying demand growth of 1% excluding
irrigation
Flat demand in 2018

 
Medium term economic growth expected


 
Policy settings should encourage
decarbonisation


 
Assumptions vary on rate of electrification
of the wider energy system
Different, positive views on future demand
5
Meridian Energy Limited 2019 Interim Results Presentation
-2%
-2%
+1%
-2%
0%
0%
+2%
+1%
+1%
+2%
+1%
-8%
-1%
+1%
-13%
-2%
REGIONAL ELECTRICITY DEMAND 2018 V 2017
0%
Source: Electricity Authority

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Official opening in early December


 
New cells have been cut in since October
2018


 
Tiwai contracts with Meridian now total
622MW


 
4
th
potline contract is for 50MW and
represents:

 
a 10% increase in the plant’s production
capacity


 
1% growth in NZ total electricity demand
growth


 
LME prices have declined 13% since June
2018, however remain above 2017 levels
4
th
potline restarted
6
Meridian Energy Limited 2019 Interim Results Presentation
530
540
550
560
570
580 590
600
610
620
1-Jul-18 1-Aug-18 1-Sep-18 1-Oct-18 1-Nov-18 1-Dec-18
MW
TIWAI POINT AVERAGE DAILY LOAD
1,500
1,600
1,700 1,800
1,900
2,000
2,100
2,200 2,300
2-Jul-18 2-Aug-18 2-Sep-18 2-Oct-18 2-Nov-18 2-Dec-18
USD/TONNE
LME ALUMINIUM PRICES
Source: Meridian

A
U
S
T
R
A
L
I
A
N

W
H
O
L
E
S
A
L
E

P
R
I
C
E
S



 
LGC markets fell during 1H FY19 with:


 
Developers looking to lock in contracts,
putting downward pressure on prices


 
Retailers under surrendering in front
years and meeting carried over obligation by buying back cheaper in 2020


 
Recently black forward prices have
increased in the lead up to summer with concerns around system reliability


 
Extreme weather in January 2019 has
driven demand, spot and forward prices higher
Lower LGC prices
7
Meridian Energy Limited 2019 Interim Results Presentation
20 30
40
50
60
70
80 90
100
Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18
Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18
$A/MWH
AUSTRALIAN LGC PRICES
Spot
CY19
CY20
1H FY19
Source: Meridian

P
O
L
I
C
Y

A
N
D

R
E
G
U
L
A
T
I
O
N

U
P
D
A
T
E

8
Meridian Energy Limited 2019 Interim Results Presentation

N
E
W

Z
E
A
L
A
N
D

P
O
L
I
C
Y

A
N
D

R
E
G
U
L
A
T
I
O
N



 
Interim Climate Change Commission
established to provide analysis on:

 
How surrender obligations work if
agricultural emissions enter the ETS


 
Planning for the transition to 100%
renewable energy by 2035


 
ICCC will be superceded by an
Independent Climate Change Commission this year, enabled by the Zero Carbon Bill


 
That Bill is currently being drafted;
intended to go through select committee before June and pass into law late 2019


 
Work is also continuing on improvements
to the ETS, a second tranche of changes expected to be announced in 2019


 
Electricity market will be the key enabler of
greater decarbonisation in New Zealand


 
This policy direction is lifting future
electricity demand forecasts
Climate change policy
9
Meridian Energy Limited 2019 Interim Results Presentation
30
40
50
60
70 80 90
1998 2002 2006 2010 2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
TWh
DEMAND FORECASTS
NZ Historical Demand Transpower - NZ Inc
Transpower - Mobilise
MBIE - High MBIE - Low Productivity Comm. - High Productivity Comm. - Low
Source: Meridian

N
E
W

Z
E
A
L
A
N
D

P
O
L
I
C
Y

A
N
D

R
E
G
U
L
A
T
I
O
N

10
Meridian Energy Limited 2019 Interim Results Presentation
Electricity price review


 
Second phase of the review is underway


 
Preliminary options paper is due in
February 2019


 
That paper will test solutions suggested by
stakeholders and panel experts


 
Final findings and recommendations will
then be developed
Sep 18
Oct 18
Nov 18
Feb 19
Mar 19

Jun 19


First report for discussion
released submissions
closed
Analysis of retail billing data
released submissions
closed
Preliminary options paper
planned release
workshops followed by submissions
Final report and recommendations
delivered to Minister

N
E
W

Z
E
A
L
A
N
D

P
O
L
I
C
Y

A
N
D

R
E
G
U
L
A
T
I
O
N



 
Since June 2018 the EA has been preparing
new TPM guidelines, including a new CBA


 
Update from EA in December 2018:


 
TPM review is a top priority


 
Existing interconnection and HVDC charges will be replaced with a benefit-based charge and a residual charge


 
Benefit-based charge for new investment and selected existing major investments


 
Residual charge for remaining former investment


 
Proposal for consultation expected to be released in mid-2019


 
Transpower’s RCP3 Proposal plans $60m
investment to extend pole 2 operating life rather than complete replacement


 
HVDC cost reduction expected from 2020,
whether TPM review is complete or not
Transmission pricing
11
Meridian Energy Limited 2019 Interim Results Presentation
0
20
40 60 80
100
120
140 160 180
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
$M
TRANSPOWER HVDC REVENUE
Source: Transpower, Meridian

A
U
S
T
R
A
L
I
A
N

P
O
L
I
C
Y

A
N
D

R
E
G
U
L
A
T
I
O
N



 
A Victorian Default Offer (VDO) will be
created from 1 July 2019 to replace current standing offers


 
The VDO will contain a cost for customer
acquisition and retention, unlike the previously Basic Service Offer originally proposed by the Thwaites review
Thwaites Review (Victoria)
12
Meridian Energy Limited 2019 Interim Results Presentation


 
Default offer proposal still seeking support
of all states
ACCC Review (Federal)

 
NEG dumped, reliability mechanisms have
been retained


 
Developed a package to address market
concerns and deliver cost savings


 
Includes proposed legislation that could
compel companies to sell off large generation assets, which has been widely criticised
Federal Government policy

U
K

P
O
L
I
C
Y

A
N
D

R
E
G
U
L
A
T
I
O
N



 
Legislation passed requiring Ofgem to cap
standard variable and default energy tariffs


 
Cap (ceiling) is in place from the end of
2018 until 2020


 
Ofgem will then recommend if the cap
should remain up to 2023


 
Recent wholesale price increases have led
to Ofgem announcing the price cap will rise in April 2019


 
Strong acquisition push by the big retailers
in the lead up to the cap’s introduction


 
Including moving customers off default
offers and onto fixed price plans (not covered by the cap)
Price caps
13
Meridian Energy Limited 2019 Interim Results Presentation

B
U
S
I
N
E
S
S

U
P
D
A
T
E

14
Meridian Energy Limited 2019 Interim Results Presentation

N
E
W

Z
E
A
L
A
N
D

C
U
S
T
O
M
E
R
S

CUSTOMER SALES
CUSTOMER
NUMBERS
SALES
VOLUME
(GWH)
AVERAGE
PRICE
1

($/MWH)
1H FY19
Residential 198,689 762 Small medium business
38,781
496
Agricultural 37,978 455 Large business
18,658
223
Total Residential/SMB
294,106
1,936
$116
Corporate 2,426 1,063 $82 1H FY18 Residential 188,698 719 Small medium business
36,916
477
Agricultural 37,382 607 Large business
17,159
224
Total Residential/SMB
280,155
2,027
$118
Corporate 2,241 1,114 $81


 
2% growth in customer numbers


 
Growth in residential (6%) and small
medium business sales volumes (4%)


 
Lower agri sales reflect irrigation demand


 
First Meridian staff customers migrated
onto the Flux platform


 
Residential discounts now replaced with
simple, lower rates
Continued growth
15

1
Volume weighted average price in $/MWh
Meridian Energy Limited 2019 Interim Results Presentation

64
57
44
93
124
0
20
40 60 80
100
120
140
2014 2015 2016 2017 2018
$/MWH
Six Months Ended 31 December
AVERAGE GENERATION PRICE
6,163
6,087
6,296
5,289
5,925
739
771
733
648
621
6,902
6,858
7,029
5,937
6,546
0
1,000
2,000 3,000
4,000
5,000
6,000
7,000
8,000
2014 2015 2016 2017 2018
GWH
Six Months Ended 31 December
NEW ZEALAND GENERATION
Hydro
Wind
Total
N
E
W

Z
E
A
L
A
N
D

G
E
N
E
R
A
T
I
O
N



 
92% of average inflows in the six months to
December 2018 with good winter storage


 
Higher average prices received for
generation (33%) and paid to supply contracted sales (37%)


 
Good storage at end of January 2019:


 
Waitaki catchment 98% of average


 
Waiau catchment 92% of average

Average generation levels at higher prices
16
Source: Meridian Source: Meridian
Meridian Energy Limited 2019 Interim Results Presentation

A
U
S
T
R
A
L
I
A
N

C
U
S
T
O
M
E
R
S

A
N
D

G
E
N
E
R
A
T
I
O
N

Customer growth
17


 
2% growth in customer numbers


 
3% reduction in retail sales volume in 1H
FY19


 
Momentum in Victorian gas sales with
12,500 customers and 142TJ of sales volume by the end of 1H FY19


 
South Australia is under development
Source: Meridian
Meridian Energy Limited 2019 Interim Results Presentation
Lower generation prices

 
Falling LGC price curve


 
Drought conditions persist in NSW, leading
to lower than expected FY19 and potentially FY20 hydro generation
48,208
77,970
97,547
97,241
99,368
0
20,000
40,000 60,000 80,000
100,000
120,000
Jun-15 Jun-16 Jun-17 Jun-18 Dec-18
CONNECTIONS
AUSTRALIAN ELECTRICITY CUSTOMERS

U
N
I
T
E
D

K
I
N
G
D
O
M



 
Proposed merger between npower (our
franchisee) and SSE’s domestic retail business was abandoned in December 2018


 
Key issues appear to be intense retail
competition and increased regulation


 
npower will move into E.ON as part of
E.ON’s acquisition of Innogy (npower’s parent) from RWE announced back in March 2018


 
Following this acquisition (later this year):


 
RWE focused on generation


 
E.ON focused on distribution and retail
across Europe


 
Powershop continues to acquire customers
(55,000 by December 2018) and develop white label capability
Merger abandoned
18
Meridian Energy Limited 2019 Interim Results Presentation

F
I
N
A
N
C
I
A
L

U
P
D
A
T
E

19
Meridian Energy Limited 2019 Interim Results Presentation

4.80
5.10
5.33
5.38
5.70
1.40
2.44
2.44
2.44
2.44
6.20
7.54
7.77
7.82
8.14
0 3
6
9
12
2014 2015 2016 2017 2018
CPS
Six Months Ended 31 December
INTERIM DIVIDEND DECLARED
Ordinary dividend
Special dividend
Total
D
I
V
I
D
E
N
D
S



 
Interim ordinary dividend declared of 5.70
cps, 86% imputed


 
Capital management interim special
dividend of 2.44 cps, unimputed


 
Brings capital management distributions to
$500M since the programme began in August 2015
6% growth in interim ordinary dividend
20
INTERIM DIVIDENDS DELCARED
CPS IMPUTATION
1H FY2019 Ordinary dividends
5.70
86%
Capital mgt special dividends
2.44
0%
Total 8.14 1H FY2018 Ordinary dividends
5.38
88%
Capital mgt special dividends
2.44
0%
Total 7.82
Source: Meridian
Meridian Energy Limited 2019 Interim Results Presentation

E
A
R
N
I
N
G
S



 
Higher residential and business sales
volumes at stable average price


 
Lower corporate sales volumes at higher
prices


 
Lower irrigation sales


 
Higher wholesale prices and volumes with:


 
10% increase in physical generation


 
12% decrease in acquired generation


 
61% increase in derivative volumes sold


 
4
th
potline volumes and Tiwai price
indexation


 
Some NZ cost expansion, mainly asset
refurbishments


 
Growth in Australia and UK earnings, some
cost growth to support this


 
Higher NZ transmission costs
Record interim EBITDAF, 18% up on 1H FY18
21
Meridian Energy Limited 2019 Interim Results Presentation
455
474
485
452
510
445
465
455
492
900
939
940
944
0
200
400 600 800
1,000
1,200
2015 2016 2017 2018 2019
$M
NZ ENERGY MARGIN
Interim
Final half-year
Total
324
332
354
329
389
294
318
303
337
618
650
657
666
0
200
400 600 800
2015 2016 2017 2018 2019
$M
GROUP EBITDAF
Interim
Final half-year
Total

A
U
S
T
R
A
L
I
A



 
GSP hydro generation, impacted by
drought conditions


 
Firming retail electricity price


 
Victorian gas earnings


 
Sharp reduction in LGC prices


 
Hedging benefits from these will be felt in
2H FY19


 
Additional operating costs for GSP assets,
gas costs and renewed customer marketing


 
Forward sales of LGCs are marked to
market through fair value movements


 
Sales settle each January with fair value
gains/losses on settled sales transferring to EBITDAF


 
1H FY19 includes A$3M of settlement losses
which will decrease 2H FY19 EBITDAF


 
This compares to an equivalent figure in 2H
FY18 of A$14M
14% increase in EBITDAF
22
Meridian Energy Limited 2019 Interim Results Presentation
Accounting treatment of LGCs
30
36
41
6
8
36
44
0
10
20 30
40
50
60
2017 2018 2019
$NZ M
AUSTRALIAN EBITDAF
Interim
Final half-year
Total

C
O
S
T
S



 
Refurbishment spend on Te Āpiti wind farm
and the Ōhau hydro stations


 
Maintaining a similar level of promotional
spend to 1H FY18, supporting NZ customer acquisition


 
Higher Australian customer service costs
from higher average customer numbers


 
Costs associated with introduction of gas
offer in Victoria


 
Maintenance costs associated with GSP
hydro assets


 
Flux expansion and preparation for
Meridian customer migration


 
Relatively stable stay in business capex


 
Total capex of $28M in 1H FY19
6% increase in operating costs
23
Meridian Energy Limited 2019 Interim Results Presentation
44
49
24
18
135
40
48
18
21
127
0
20
40 60 80
100
120
140 160
NZ Wholesale
NZ Retail
Australia
Other
Total
$M
OPERATING COSTS
1H FY19
1H FY18
23
19
19
17
21
37
31
28
30
60
50
47
47
0
10
20 30
40
50
60
70
80
2015 2016 2017 2018 2019
$M
STAY IN BUSINESS CAPEX
Interim
Final half-year
Total

B
E
L
O
W

E
B
I
T
D
A
F



 
$3M (2%) increase in depreciation


 
No impairments in 1H FY19, compared with
1H FY18 impairments of $2M (Central Wind consent)


 
No asset sale gains in 1H FY19 compared
with 1H FY18 gains of $6M (farm land sales)


 
$20M increase to NPBT from fair value of
electricity hedges from rising forward electricity prices and falling LGC price curve ($2M reduction in 1H FY18)


 
$15M reduction to NPBT from fair value of
treasury instruments from decreases in New Zealand and Australian forward interest rates ($2M reduction in 1H FY18)


 
$2M (5%) increase in net financing costs


 
$17M increase in tax expense from higher
NPBT


 
$40M (38%) increase in underlying NPAT
from higher EBITDAF, some offset from increases depreciation, interest, tax and swapation premiums
39% increase in NPAT
24
117
104
125
109
152
130
81
75
92
247
185
200
201
0
100
200 300
2015 2016 2017 2018 2019
$M
NET PROFIT AFTER TAX
Interim
Final half-year
Total
115
122
131
104
144
94
111
90
102
209
233
221
206
0
100
200 300
2015 2016 2017 2018 2019
$M
UNDERLYING NPAT
Interim
Final half-year
Total
Meridian Energy Limited 2019 Interim Results Presentation

D
E
B
T

A
N
D

F
U
N
D
I
N
G



 
Total borrowings as at 31 December 2018 of
$1,561M


 
Up $195M from 31 December 2017


 
Committed bank facilities of $725M of
which $300M were undrawn


 
Expiry of these facilities from FY19 to FY26
Recent USD 300M Private Placement
25
Meridian Energy Limited 2019 Interim Results Presentation
1.7
1.8
1.9
2.3
2.2
0
1
2 3
Jun-15 Jun-16 Jun-17 Jun-18 Dec-18
TIMES
NET DEBT/EBITDAF
340
325
56
135
160
489
50
35
75
100
0
100
200 300
400
500
600
2019 2020 2021 2022 2023 2024+
$M
Financial Year ended 30 June
DEBT MATURITY PROFILE AS AT 31 DEC 2018
Drawn debt maturing (face value)
Available facilities maturing
34%
4%
26%
5%
22%
9%
SOURCES OF FUNDING AS AT 31 DEC 2018
NZ$ bank facilities drawn/undrawn EKF - Danish export credit Retail Bonds Floating rate notes US private placement Commercial paper

26
C
L
O
S
I
N
G

C
O
M
M
E
N
T
S



 
Good current catchment storage


 
Strong January 2019 generation and wholesale prices, with irrigation and air conditioning load driving demand


 
NZ electricity price review preliminary options paper is imminent


 
Followed by consultation in early 2019, final report to the Minister will follow that


 
Transmission pricing proposal for consultation expected in the middle of the year


 
NZ’s climate change actions will be shaped by this year’s Zero Carbon Bill, expected to pass into law late 2019


 
Default offers in two forms (Victoria, rest of the NEM) appear likely


 
Australian federal election sometime in 2019
Meridian Energy Limited 2019 Interim Results Presentation

Q
U
E
S
T
I
O
N
S

27
Meridian Energy Limited 2019 Interim Results Presentation

F
I
N
A
N
C
I
A
L

P
E
R
F
O
R
M
A
N
C
E

I
N

D
E
T
A
I
L

28
Meridian Energy Limited 2019 Interim Results Presentation

O
P
E
R
A
T
I
N
G

C
A
S
H

F
L
O
W
S



 
Record level of interim operating cash flow


 
Driven by higher 1H FY19 EBITDAF


 
Includes reversal of timing differences that
weighed on FY18 full year cash flow
$100M (62%) increase
29
Meridian Energy Limited 2019 Interim Results Presentation
217
206
203
162
262
223
246
267
265
440
452
470
427
0
100
200 300
400
500
2015 2016 2017 2018 2019
$M
OPERATING CASHFLOW
Interim
Final half-year
Total

$M
WHOLESALE RETAIL AUSTRALIA
OTHER/
UNALLOCATED
INTER-
SEGMENT
SIX MONTHS ENDED 31 DECEMBER
1H
FY19
1H
FY18
1H
FY19
1H
FY18
1H
FY19
1H
FY18
1H
FY19
1H
FY18
1H
FY19
1H
FY18
Energy margin
430 360 80 92 66 57 - - - -
Other revenue
2
2
6
5
1
-
13
8
(9)
(5)
Energy transmission expense (63) (60) - - (2) (3) - - - - Operating expenses
(44)
(40)
(49)
(48)
(24)
(18)
(23)
(25)
5
4
EBITDAF
325 262 37 49 41 36 (10) (17) (4) (1)
S
E
G
M
E
N
T

R
E
S
U
L
T
S

30
Meridian Energy Limited 2019 Interim Results Presentation
37
49
-16
+4
+1
-1
0
10
20 30
40
50
60
EBITDAF 31
Dec 2017
Retail
contracted
sales
Costs to
supply
contracted
sales
Other
revenue
Operating
costs
EBITDAF 31
Dec 2018
$M
MOVEMENT IN RETAIL SEGMENT EBITDAF

A
U
S
T
R
A
L
I
A
N

S
E
G
M
E
N
T



 
For treatment of financial
trading
FY18 energy margin reclassified
31
Meridian Energy Limited 2019 Interim Results Presentation
ENERGY MARGIN ($M)
1H FY18
REPORTED
CHANGES 1H FY18
RESTATED
FY18
RESTATED
Contracted sales
49
12
61
123
Cost to supply customers
(37)
(10)
(47)
(100)
Net cost of acquired generation
- (14) (14) (25)
Generation spot revenue
45
12
57
87
Energy Margin
57
-
57
85

N
E
W

Z
E
A
L
A
N
D

R
E
T
A
I
L



 
2% increase in customers since June 2018
Customers
32


 
5% decrease in overall volumes


 
6% increase in residential volumes


 
4% increase in small business volumes


 
1% decrease in large business volumes


 
25% decrease in agri volumes, irrigation-
driven


 
1% decrease in average sales price
Residential, Business, Agri segment

 
5% decrease in volumes


 
1% increase in average sales price
Corporate segment
Meridian Energy Limited 2019 Interim Results Presentation
104
102
103
106
109
116
117
115
119
119
56
56
59
66
69
276
275
277
291
297
0
50
100
150
200
250
300
350
Jun-15 Jun-16 Jun-17 Jun-18 Dec-18
ICP (000)
NEW ZEALAND CUSTOMER NUMBERS
Meridian North Island
Meridian South Island
Powershop
Total
1,880
2,001
1,886
2,027
1,936
1,113
1,163
911
1,114
1,063
2,993
3,164
2,797
3,141
2,999
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2014 2015 2016 2017 2018
GWH
Six Months Ended 31 December
RETAIL SALES VOLUME
Residential, SMB, Agri
Corporate
Total

N
E
W

Z
E
A
L
A
N
D

H
Y
D
R
O
L
O
G
Y



 
Inflows for 1H FY19 were 92% of historical
average


 
January 2019 inflows were 99% of average
Inflows
33


 
Meridian’s Waitaki catchment storage at 31
December 2018 was 98% of historical average


 
By 31 January 2019, this position was also
98% of historical average
Storage
Meridian Energy Limited 2019 Interim Results Presentation
0
1,000
2,000 3,000
4,000
5,000
6,000
7,000
8,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
GWh
Financial year
MERIDIAN'S COMBINED CATCHMENT INFLOWS
December YTD
85 year average
0
500
1,000
1,500
2,000
2,500
1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec
GWh
MERIDIAN'S WAITAKI STORAGE
Average 1979-
2013
2014
2015
2016
2017
2018

N
E
W

Z
E
A
L
A
N
D

G
E
N
E
R
A
T
I
O
N



 
1H FY19 generation was 10% higher than 1H
FY18


 
Reflected higher hydro and lower wind
generation
Volume
34


 
1H FY19 average price Meridian received for
its generation was 33% higher than 1H FY18


 
1H FY19 average price Meridian paid to
supply contracted sales was 38% higher than 1H FY18
Price
Meridian Energy Limited 2019 Interim Results Presentation
6,163
6,087
6,296
5,289
5,925
739
771
733
648
621
6,902
6,858
7,029
5,937
6,546
0
1,000
2,000 3,000
4,000
5,000
6,000
7,000
8,000
2014 2015 2016 2017 2018
GWH
Six Months Ended 31 December
NEW ZEALAND GENERATION
Hydro
Wind
Total
64
57
44
93
124
0
20
40 60 80
100
120
140
2014 2015 2016 2017 2018
$/MWH
Six Months Ended 31 December
AVERAGE GENERATION PRICE

A
U
S
T
R
A
L
I
A
N

R
E
T
A
I
L



 
2% growth in customer numbers since
June 2018


 
12,500 gas customers in Victoria by 31
December 2018
Customers
35


 
3% decrease in sales volumes


 
142TJ of gas sales in Victoria
Sales volume
Meridian Energy Limited 2019 Interim Results Presentation
48,208
77,970
97,547
97,241
99,368
0
20,000
40,000 60,000 80,000
100,000
120,000
Jun-15 Jun-16 Jun-17 Jun-18 Dec-18
CONNECTIONS
AUSTRALIAN ELECTRICITY CUSTOMERS
63
163
241
289
280
0
50
100
150
200
250
300
350
2014 2015 2016 2017 2018
GWH
Six Months Ended 31 December
RETAIL SALES VOLUME

A
U
S
T
R
A
L
I
A
N

G
E
N
E
R
A
T
I
O
N



 
1H FY19 generation was 37% higher than 1H
FY18


 
1H FY19 includes 123GWh of seasonal
generation from the GSP hydro assets


 
1H FY19 wind generation was 3% lower
than 1H FY18
Volume
36
Meridian Energy Limited 2019 Interim Results Presentation
441
437
309
305
296
123
419
0
100
200 300
400
500
600
2014 2015 2016 2017 2018
GWH
Six Months Ended 31 December
AUSTRALIAN GENERATION
Wind
Hydro
Total

389
329
-16
+58
-297
+45
+259
+10
-1
+9
+3
-2
-8
0
100
200 300
400
500
EBITDAF 31
Dec 2017
Retail
contracted
sales
Wholesale
contracted
sales
Costs to
supply
customers
Net cost of
acquired
generation
Generation
spot revenue
Virtual asset
swap
margins
Other
market costs
Australian
energy
margin
Other
revenue
Transmission
expenses
Employee &
other
operating
expenses
EBITDAF 31
Dec 2018
$M
MOVEMENT IN EBITDAF
1
H

F
Y
1
9

E
B
I
T
D
A
F

37
New Zealand Energy Margin +$58M (13%)
Meridian Energy Limited 2019 Interim Results Presentation

1
H

F
Y
1
9

E
B
I
T
D
A
F

T
O

N
P
A
T

XXXX
38
Meridian Energy Limited 2019 Interim Results Presentation
144
152
389
-137
-7
-43
-58
+5
+7
-4
100
150
200
250
300
350
400
450
EBITDAF Depreciation
and
amortisation
Premiums paid
on electricity
options net of
interest
Net finance
costs
Tax Underlying
NPAT
Net change in
fair value of
hedges/
instruments
Premiums paid
on electricity
options net of
interest
Tax NPAT
$M
1H FY19 EBITDAF TO NPAT RECONCILIATION

N
E
W

Z
E
A
L
A
N
D

E
N
E
R
G
Y

M
A
R
G
I
N



 
A non-GAAP financial measure
representing energy sales revenue less energy related expenses and energy distribution expenses


 
Used to measure the vertically integrated
performance of the retail and wholesale businesses


 
Used in place of statutory reporting which
requires gross sales and costs to be reported separately, therefore not accounting for the variability of the wholesale spot market and the broadly offsetting impact of wholesale prices on the cost of retail electricity purchases
ENERGY MARGIN
39





 
Revenues received from sales to customers net of
distribution costs (fees to distribution network companies that cover the costs of distribution of electricity to customers), sales to large industrial customers and fixed price revenues from derivatives sold (Contract sales revenue)


 
Purchases required to cover contracted customer
sales (Cost to supply customers)


 
The fixed cost of derivatives acquired to
supplement generation and manage spot price risks, net of spot revenue received for generation acquired from those derivatives (Net cost of acquired generation)


 
Revenue from the volume of electricity that
Meridian generates (Generation spot revenue)


 
The net position of virtual assets swaps with
Genesis Energy and Mercury


 
Other associated market revenues and costs
including Electricity Authority levies and ancillary generation revenues (i.e. frequency keeping)


Meridian Energy Limited 2019 Interim Results Presentation