Growth continues, renewables underpin performance
Results announcement
Results for announcement to the market
Name of issuer Mercury NZ Limited (MCY)
Reporting Period 6 months to 31 December 2023
Previous Reporting Period 6 months to 31 December 2022
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$1,605,000 +23%
Total Revenue $1,605,000 +23%
Net profit/(loss) from
continuing operations
$174,000 -27%
Total net profit/(loss) $174,000 -27%
Interim Dividend
Amount per Quoted Equity
Security
$0.09300000
Imputed amount per Quoted
Equity Security
$0.03616667
Record Date 14 March 2024
Dividend Payment Date 2 April 2024
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$3.36 $3.36
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer to accompanying HY24 unaudited financial statements.
The percentage changes detailed in the above table and the
prior comparable period net tangible assets per quoted equity
security are based on HY23 restated figures as outlined in
further detail in the HY24 financial statements.
Authority for this announcement
Name of person
authorised to
make this announcement
Howard Thomas, Company Secretary
Contact person for this
announcement
Howard Thomas, Company Secretary
Contact phone number +64 9 308 8200
Contact email address Howard.Thomas@Mercury.co.nz
Date of release through MAP
20/02/2024
Unaudited financial statements accompany this announcement.
---
STOCK EXCHANGE LISTINGS: NZX (MCY) / ASX (MCY)
NEWS RELEASE
Mercury’s growth trajectory continues, delivery of renewables underpins
performance
HY24 Financial Results Summary
HY2024 HY2023 Change %
NET PROFIT AFTER TAX ($M) 174 239 -27%
EBITDAF ($M) 434 451 -4%
STAY-IN-BUSINESS CAPITAL EXPENDITURE ($M) 60 31 94%
ELECTRICITY GENERATION (GWh) 4,486 4,817 -7%
INTERIM FULLY IMPUTED ORDINARY DIVIDEND (CENTS PER SHARE) –
TO BE PAID ON 2 APRIL 2024
9.3 8.7 7%
20 February 2024 – Mercury progressed its growth ambitions during the period, with the delivery of more renewable
generation underpinning business performance.
“The renewable energy sector is undergoing transformational growth, and we are part of that change. The opportunity ahead of
us is material – Aotearoa New Zealand’s total energy consumption is expected to reach nearly 60% renewable by 2050, well up
from the 20% we’re currently at,” said Mercury’s Chief Executive Vince Hawksworth.
FINANCIAL OVERVIEW
Mercury’s net profit after tax was $174 million for the half year, down $65 million on the prior comparable period due to higher
depreciation, interest charges and net changes in fair value. Mercury reported EBITDAF of $434 million, $17 million down on the
prior comparable period, a strong performance given the much higher hydro generation during HY23.
Earnings for the period were positively influenced by ongoing investment in renewable generation together with higher prices.
Wind generation increased by over 40% to 1,109GWh, with the full contribution of generation from Turitea South and
commissioning of Kaiwera Downs 1 wind farms.
Operational expenditure of $191 million was up $31 million reflecting increases in employee-related expenses and maintenance
expenses mostly from wind contracts.
Stay-in-business capital expenditure for the period was $60 million (up $29 million). Growth capital expenditure was $70 million
(up $26 million) and largely related to construction costs incurred for the addition of a fifth unit at our Ngā Tamariki geothermal
station and completion of the Kaiwera Downs 1 wind farm near Gore. Net debt was $1,983 million, up $76 million primarily due
to higher interest and tax paid combined with a lift in capital expenditure on new generation projects and geothermal drilling.
ENABLING ELECTRIFICATION THROUGH RENEWABLES DELIVERY
Mr Hawksworth said business activity over the period was focused on executing against Mercury’s commitment of up to $1
billion investment over the financial year to generation development over the next three years. Two of the three major projects
previously signalled are expected to meet this timeframe.
“Overall, we’re pleased with progress to date. We committed $220 million in September to build a fifth generating unit at our Ngā
Tamariki geothermal station, which will add another net 46MW. We’re also at the advanced stages of approving the
development of the 155MW Kaiwera Downs 2 wind farm,” he said.
The third signalled project, Kaiwaikawe wind farm, is experiencing delays related to procurement and construction logistics
which will likely delay construction commencement into FY25.
“In addition, we celebrated the opening of our 43MW Kaiwera Downs 1 wind farm in November, completed under budget and on
schedule. This is testament to the capability of our team and contractors together with consistent, transparent engagement with
the community,” said Mr Hawksworth.
Following the period end, Mercury also issued a request for Expressions of Interest for an offtake agreement for 100MW of solar
energy, commencing in 2026.
“We see this as an important step towards further diversification of our renewable energy portfolio, and a meaningful way to
support the role independent generators play in New Zealand’s energy market,” said Mr Hawksworth.
UNLOCKING SYNERGIES FOR CUSTOMER VALUE
In December, the goal of bringing Mercury and Trustpower people, processes and systems together was achieved. This
included migrating all Mercury mass market brand customers onto a single technology stack, a key step towards unlocking
benefits from the acquisition of Trustpower’s retail business in May 2022.
“This gives us a solid platform to deliver greater value for customers in terms of choice, enhanced experience, and the delivery
of new and innovative solutions,” said Mr Hawksworth.
The business remains on track to realise the integration synergies previously forecast, with the majority expected in FY25.
Even with those efficiencies, Mercury will lift electricity prices for most customers effective 1 April 2024 as costs to the retail
business have increased. Mr Hawksworth said that the business would continue to offer targeted measures to support our
customers most in need.
NAVIGATING THE TRANSITION
“Collective action and whole-of-system thinking will be critical to unlocking prosperity through the energy transition for every
individual,’ said incoming Mercury Chair Scott St John.
“Managing affordability will be a key challenge as the transition progresses, and Mercury will continue to work with the sector,
community, Government and others on this,” said Mr St John.
“We continue to have an open conversation about the impact of cumulative changes on affordability, including distribution and
transmission investment, growth in intermittent renewables, New Zealand’s Emissions Trading Scheme and near-term inflation,
skilled worker shortages and supply chain issues,” he said.
“We remain mindful of the role supportive policy will play in accelerating the electrification of New Zealand’s economy in an
inclusive way. We welcome the clarity on Onslow and continue to advocate for clarity on the role of gas, a clear consenting
regime, demand-side policies and network and transmission investment,” he said.
OTHER KEY OPERATIONAL ACTIVITIES
Contributed to the proposed Sector and Government energy transition framework to enable a system-wide approach to the
transition.
Experienced delays to the geothermal drilling campaign. The contract with the drilling rig contractor was terminated and we
are currently negotiating an alternative contractor to complete campaign.
Embedded adaptive ways of working, including changes to organisational structure, to support better performance. Adaptive
leadership and diverse emerging leaders programmes performed strongly.
Progressed enhanced health, safety and wellbeing programme, with no recordable injuries for the half year (excluding offsite
lost time injuries).
Welcomed new Chair, Scott St John. Mercury extends its thanks to Prue Flacks for her substantial contribution over the last
13 years, particularly during her last four years as Chair.
INTERIM DIVIDEND
The Board has declared a fully imputed interim dividend of 9.3 cents per share, up almost 7% on the HY23 dividend. Full year
dividend guidance is unchanged at 23.3 cents per share expected to be the 16th consecutive year of ordinary dividend growth.
Mercury’s Dividend Reinvestment Plan continues, with shareholders able to reinvest their dividends into Mercury shares with a
2% discount.
GUIDANCE
FY24 EBITDAF guidance has increased to $880 million from $835 million, mostly due to better pricing outcomes in our
generation and wholesale segment. This assumes mean hydro generation (4,067GWh) and is subject to future hydrological
volatility, wholesale market conditions and any material adverse events, significant one-off expenses or other unforeseeable
circumstances.
ENDS
Howard Thomas
General Counsel and Company Secretary
Mercury NZ Limited
For investor relations queries, please contact:
Paul Ruediger
Head of Business Performance & Investor Relations
027 517 3470
investor@mercury.co.nz
For media queries, please contact:
Shannon Goldstone
Reputation and Social Impact Lead
027 210 5337
mercurycommunications@mercury.co.nz
ABOUT MERCURY NZ LIMITED
Mercury generates electricity from 100% renewable sources: hydro, geothermal and wind. We are also a retailer of electricity, gas, broadband
and mobile services. We’re listed on the New Zealand Stock Exchange and the Australian Stock Exchange with the ticker symbol ‘MCY’, with
foreign exempt listed status. The New Zealand Government holds a legislated minimum 51% shareholding in the Company.
Visit us at: www.mercury.co.nz
---
20 24
Six Months Ended 31 December 2023
20 February 2024
VINCE HAWKSWORTH
Chief Executive
WILLIAM MEEK
Chief Financial Officer
PAUL RUEDIGER
Head of Business Performance & Investor Relations
INTERIM
RESULTS
DISCLAIMER.
2
This presentation has been prepared by Mercury NZ Limited and its group of companies (“Company”) for informational purposes. This disclaimer applies to this document and
the verbal or written comments of any person presenting it.
Information in this presentation has been prepared by the Company with due care and attention. However, neither the Company nor any of its directors, employees,
shareholders nor any other person gives any warranties or representations (express or implied) as to the accuracy or completeness of this information. To the maximum extent
permitted by law, none of the Company, its directors, employees, shareholders or any other person shall have any liability whatsoever to any person for any loss (including,
without limitation, arising from any fault or negligence) arising from this presentation or any information supplied in connection with it.
This presentation may contain projections or forward-looking statements regarding a variety of items. Such projections or forward-looking statements are based on current
expectations, estimates and assumptions and are subject to a number of risks, and uncertainties, including material adverse events, significant one-off expenses and other
unforeseeable circumstances, such as, without limitation, hydrological conditions. There is no assurance that results contemplated in any of these projections and forward-
looking statements will be realised, nor is there any assurance that the expectations, estimates and assumptions underpinning those projections or forward-looking statements
are reasonable. Actual results may differ materially from those projected in this presentation. No person is under any obligation to update this presentation at any time after its
release or to provide you with further information about the Company.
A number of non-GAAP financial measures are used in this presentation. You should not consider any of these in isolation from, or as a substitute for, the information provided
in the audited consolidated financial statements for the year ended 30 June 2023, which are available at www.mercury.co.nz/investors
.
The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. The presentation does
not constitute an offer to sell, or a solicitation of an offer to buy, any security and may not be relied upon in connection with the purchase or sale of any security. Nothing in this
presentation constitutes legal, financial, tax or other advice.
FY24 EBITDAF guidance increased to $880m.
9.3cps interim dividend declared (7% higher
than HY23) and FY24 ordinary dividend
guidance maintained at 23.3cps, the 16
th
year
of consecutive dividend growth
MERCURY TAKES LEADING ROLE IN NEW ZEALAND’S ENERGY TRANSITION.
3
Business performance and major events
Produced 4.5TWh of renewable generation
in HY24 with both Turitea and Kaiwera
Downs stage 1 wind farms now fully
operational. Full year forecast sees 8.8TWh
of diversified renewable generation
New generation completed at Kaiwera
Downs stage 1 on time and under budget.
This ten turbine 43MW wind farm will have
average annualised generation of 147GWh
STRATEGIC
STRATEGICOPERATIONS
STRATEGIC
FINANCIALS
Committed to the OEC5 expansion of Ngā
Tamariki geothermal station. The expansion
will have annualised generation of 390GWh
and increase station net output by 46MW
Mercury brand mass market customers
successfully migrated to the Gentrack
billing system. We now have a single retail
platform to grow our position as NZ’s
leading multi-product utility retailer
OPERATIONS
Geothermal drilling campaign delayed.
Currently in the process of negotiating an
alternative drilling rig contractor
Key messages
•We are focused on increasing our safety maturity and
growing the capability of our people and systems to
enable safe and healthy outcomes
•Our safety critical risk programme addresses 11 critical
risks that can seriously harm our people, contractors and
members of the public. These areas inform our actions
•We are taking a programme approach to fatality
prevention. We are currently 36% of the way through our
critical risk programme
•Completed the outstanding improvement notices from
WorkSafe with the increased maturity in our Process
Safety programme
•After careful consideration Mercury made the decision to
plead not guilty to charges brought by WorkSafe in
relation to the Rotokawa steam hammer event in July-21.
We continue to work with WorkSafe on an enforceable
undertaking
HEALTH, SAFETY & WELLBEING.
4
Continued focus on Health, Safety and Wellbeing
1
TRIFR is the Total Recordable Injury Frequency Rate per 200,000 hours, includes employees and on-site contractors.
0
1
2
3
0
0.5
1
1.5
FY18FY19FY20FY21FY22FY23CAL-23
TRIFRHigh Severity Incidents (RHS)
Zero high severity Health, Safety & Wellbeing incidents
occurred in HY24. The Cal-23 TRIFR was 0.21, continuing
the positive downward trend
•Stay-In-Business capital expenditure higher from
geothermal drilling campaign, Karāpiro rehabilitation,
retail integration and Kawerau turnaround
•Growth investment includes construction costs of 5
th
unit at Ngā Tamariki geothermal station and
Kaiwera Downs stage 1 wind farm
FINANCIAL – STRONG PERFORMANCE COMING OFF RECORD HYDRO GENERATION.
5
Performance benefited from diversified generation portfolio
HY24 Financial Performance
•EBITDAF lower coming off record high hydro generation
in the prior period and higher operating expenditure. This
was partially offset by new wind generation
•NPAT down due to EBITDAF (as above), higher
depreciation (new wind assets), interest (more debt and
increase in rates) and net change in fair value of carbon
618
191
434
174
283
60
70
129
604
160
451
239
345
31
44
120
0
100
200
300
400
500
600
700
Trading MarginOperating
Expenditure
EBITDAFNPATOperating Cash
Flow
Stay-In-Business
Capital
Expenditure
Growth
Investment
Declared Ordinary
Interim Dividend
$m
HY2024
HY2023
•Price: higher wholesale prices, improved
LWAP/GWAP (1.04 vs 1.06); lower trading gains;
increased connection charges from TPM are offset by
settlement residual related to loss and constraint
rentals
•Operating expenses: see next slide
FINANCIAL – SALES YIELDS AND NEW WIND GENERATION LIFT EARNINGS.
6
EBITDAF bridge (HY23 to HY24)
Decrease Increase
HY24 Financial Performance
•Generation volume down 0.3TWh from lower hydro
partly offset by new wind (Turitea and Kaiwera Downs)
•Physical Sales yield: Mass market VWAP up $6/MWh,
commercial and industrial VWAP up $9/MWh
•Electricity derivatives: impact of higher prices on net
sales position
451
434
33
20
(28)
(11)
(31)
-
50
100
150
200
250
300
350
400
450
500
HY23Generation
volume
Physical
sales
Electricity
derivatives
Price incl
LWAP/GWAP
Operating
expenses
HY24
EBITDAF ($m)
160
191
8
3
15
5
-
40
80
120
160
200
HY23Retail
capability
Retail
integration
Asset
maintenance
Other cost
growth
HY24
Opex ($m)
FINANCIAL – INVESTING IN FUTURE GROWTH.
7
Operating Expenditure
•Retail capability and $4m from NOW acquisition
•Retail integration (Mercury brand mass market
customers migrating to the Gentrack billing system)
•Generation maintenance capability including $6m of
new wind operations
•Other includes insurance and landowner agreements
Continued investment in growth and existing assets
Movement in net debt
•Strong performance enabled continued investment in
growth, with net debt lifting $76m from June 2023
•Investing cash flows mainly capital expenditure (stay-in-
business and growth capex)
434
(76)
(93)
(181)
(60)
(157)
(19)
-100
0
100
200
300
400
500
EBITDAFTaxInvestingInterestDividends
paid
Other
capital
Increase in
net debt
$m
STRATEGIC – HIGH QUALITY GENERATION PIPELINE.
8
Kaiwera Downs 2 in advanced stages of FID approval
Project
Capacity
(MW)
Generation
(GWh pa)
Type &
Location
StageProgress Comment
Ngā Tamariki OEC5
46390 uplift
Geothermal
near Reporoa
ConstructionFirst generation late Cal-25
Kaiwaikawe
74220
Wind farm
near
Dargaville
Pre-FIDDelay FID to early FY25
Kaiwera Downs II
155525
Wind farm
near Gore
Pre-FIDFID expected FY24
Beyond FY24
Puketoi
2281,080
Wind farm
near
Pahiatua
Pre-FID
Scheme optimisation and
development work underway
Mahinerangi 2
138470
Wind farm
near Dunedin
ConsentedConsent amendment likely
Tararua repowering
60MW
Uplift, to
221MW
270 uplift
Wind farm
near
Palmerston
North
Pre
Re-consenting
Constraints mapping and
concept layouts
Various other
prospects
1500~5,000Various
Prospecting,
Feasibility and
Consenting
Key messages
•Well advanced to reach FID in FY24 of the stage two
Kaiwera Downs wind farm. Site optimisation has reduced
the annualised generation from 650GWh to 525GWh
•Kaiwaikawe wind farm is experiencing delays related to
procurement and construction logistics which will likely
delay construction commencement into FY25
•We are continuing to assess Mahinerangi 2 wind farm
project. Changes to turbine technology and regulation
are likely to result in consent amendments
9
STRATEGIC – STRONG GENERATION DEVELOPMENT PERFORMANCE.
Turitea South wind farm fully operational in FY23,
increasing annual generation on average by 370GWh
OUR TRACK RECORD
Kaiwera Downs stage 1 wind farm fully operational in
HY24 increasing average annual generation by
147GWh. The project was on time and under budget
Committed to a 390GWh Ngā Tamariki geothermal
expansion in HY24 with first generation expected late
calendar 2025
Kaiwaikawe (wind)
74MW, 220GWh
Mahinerangi II (wind)
138MW, 470GWh
Kaiwera Downs II (wind)
155MW, 525GWh
Puketoi (wind)
228MW, 1,080GWh
Ngā Tamariki OEC5 (geothermal)
46MW, 390GWh
PROJECTS UNDER CONSTRUCTION OR CONSENTED
In Construction
Consented
STRATEGIC – EXPANSION OF HIGH QUALITY GEOTHERMAL GENERATION.
10
Key messages
•Ngā Tamariki power station was commissioned in 2013
and currently comprises four Ormat Energy Converter
(OEC) units providing a net station capacity of 86MW.
This OEC5 expansion was provided for in the long-term
station development plan
•In September 2022, the $220 million OEC5 unit was
committed and will increase site generation by 390GWh
and net output by 46MW
•Detailed design is significantly progressed and the
manufacture commenced on long lead time equipment
•Our key supplier on this project, Ormat Technologies, has
been impacted by the situation in Gaza and we are
monitoring this carefully. We are not currently expecting
delivery timeframes to be materially impacted
Air-cooled condensers for OEC5
First generation expected late calendar 2025
STRATEGIC – LEADING THE WAY IN THE CONSTRUCTION OF WIND GENERATION.
11
Kaiwera Downs stage 1 wind farm fully operationalKey messages
•New stage one wind farm generation completed at
Kaiwera Downs on time and under budget
•Stage one is a ten turbine 43MW wind farm with
annualised generation of 147GWh
•The success of the project provides a solid
foundation for development and construction of
Kaiwera Downs stage 2 wind farm
•Kaiwera Downs stage 2 155MW / 525GWh wind farm
is expected to reach FID during FY24
Kaiwera Downs stage 1
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Switches (Count 000’s)
National Switching
Mercury BrandMercury Group
Net SwitchesPrior 12mth Mercury Switches
STRATEGIC – NEW ZEALAND'S LEADING MULTI-PRODUCT UTILITY.
12
Key messages
•The programme of work to migrate Mercury brand mass
market customers to the Gentrack billing system was
successfully completed in HY24. We reduced our
acquisition activity throughout HY24 to manage the
migration programme of work
•The single technology stack gives us a solid platform to
deliver greater value for customers in terms of choice,
enhanced experience, and the delivery of new and
innovative solutions
•The business remains on track to realise the integration
synergies previously forecast, with the majority expected in
FY25
•Integration programme spend to date is on track at
$44 million relative to the $50 million forecast spend.
Project cost to date includes $25 million of operating
expenditure and $19 million of capital expenditure
Customers migrated to a single technology stack
1
Source: Electricity Authority. Mercury Group includes Globug.
Lower acquisitions to
manage migration
Trustpower
acquisition
from May-22
STRATEGIC – ELECTRIFICATION OPPORTUNITY IS SIGNIFICANT.
13
Key messages
•Renewable electricity to account for 58% of New
Zealand’s total energy demand in 2050. This will
require a further 30TWh of new renewable electricity
from the current base of 36TWh
1
•Collective action and whole-of-system thinking in
New Zealand will be critical to capture the opportunity
in infrastructure investment that could support future
prosperity from the energy transition
•Global regulators are accelerating the energy
transition, growing demand and boosting the need for
investment – for example, the Inflation Reduction Act
in USA, the New Deal in South Korea and the EU’s
Green Deal Industrial Plan 2022
Renewable electricity supply to increase 30TWh by 2050
- 20 40 60 80
Cal-2050
Cal-2020
TWh
1
Refer to the Boston Consulting Group Report ‘Climate Change in New Zealand: The Future is Electric’ published October 2022
Key messages
•Electricity futures three year forward price stable over
HY24, this is partly a result of higher short term prices
offsetting lower mid to long term prices
•Short term futures pricing impacted by hydrology,
generation commissioning delays, peak demand growth,
availability of firming generation and upstream gas
production. Carbon prices lifted after the government
adopted the Climate Change Commission’s advice and
then remained flat throughout the period
•Mid to long term forward prices decline, driven by supply
and demand assumptions as new build generation is
committed to across the sector. This is partially offset by
higher generation development costs and increased
firming requirements. Peak demand growth has been 1.5
- 2% per annum since 2020
OPERATIONAL – ELECTRICITY THREE YEAR FORWARD PRICES STABILISED.
14
Forward prices stable despite pipeline growth
0
20
40
60
80
100
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
$/NZU
Carbon Price
Source: ASX, Mercury, Enerlytica
1
Calculated on a two quarter ahead basis at Ōtāhuhu (Auckland), e.g. the Feb-24 price of $156/MWh represents the average futures price for the period Jul-24 to Jun-27
0
50
100
150
200
250
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
$/MWh
Electricity Futures Three Year Forward Price
1
OPERATIONAL – TAUPŌ STORAGE PROVIDING A STRONG PORTFOLIO POSITION.
15
>50GWh above average
Month EndJulAugSepOctNovDecJanFeb
5
MarAprMayJun
Hydro Generation -
Delta to Average
2
(GWh)
2247-112-58-24-173316
Waikato Inflows -
Delta to Average
3
(GWh)
-64-95-27-77-41-187517
Taupō Storage –
Delta to Average
2
(GWh)
9-128-14-4185410997
Spot Price -
Ōtāhuhu ($/MWh)
$120$148$126$133$152$183$203$114
Futures Price (M-3
4
)
Ōtāhuhu ($/MWh)
$220$177$131$109$121$108$105$185
1
Maximum Control Level
2
Monthly average since July 1999
3
Monthly average since July 1927
4
Closing price 3 months prior
5
To 12 Feb 2024
>50GWh below average
Source: NZXHydro, WITS, ASX
Above $100/MWh
Above $200/MWh
0
100
200
300
400
500
600
GWh
LAKE TAUPŌ STORAGE
(since 1 Jul 1999)
MinAvgLake Taupo MCLFY2023FY2024
OPERATIONAL – GEOTHERMAL DRILLING UNDERWAY WITH DELAYS.
16
Geothermal drilling programme rephased
Key messages
•The 14 month, 8 well, geothermal drilling campaign
commenced in June 2023 to sustain capacity of the
Kawerau, Ngā Tamariki and Rotokawa fields, offsetting the
natural decline of well performance
•Our geothermal drilling campaign has experienced delays.
We have terminated our drilling services contract and are
currently negotiating an alternative drilling rig contractor
to complete the campaign. We expect to engage a new
provider shortly
•To d a t e$46 million has been invested in the campaign.
Based on a revised schedule and early indicative costs the
expected campaign cost is a further ~$114 million through
to FY26 (Total cost ~$160m)
Ngā Tamariki
OPERATIONAL – ENHANCING AND OPTIMISING OUR EXISTING GENERATION ASSETS.
17
Key messages
•First phase of centralising the geothermal control room
operations implemented, with Ngā Tamariki and Ngā
Awa Pūrua control combined onsite at Ngā Awa Pūrua.
The next phase involves system testing, training and
safety planning and onboarding Kawerau operations
•Control systems upgraded at Ngā Tamariki and Kawerau
geothermal stations
•Rehab work of all three Karāpiro units is continuing with
the second unit due for commissioning in July 2024.
The overall project is expected to increase station
capacity by 17MW and average generation by 32GWh
First phase of centralising geothermal control complete
Karāpiro Hydro Power Station
OPERATIONAL – PLATFORM FOR CONNECTION GROWTH THROUGH INTEGRATION.
18
Total connections across all products increased 17k
Key messages
•Retail integration has reshaped Mercury into a scaled
multi-product utility retailer, creating a foundation for
enhanced operating efficiencies and growth
•Electricity connections remain stable with HY24 flat
against PCP. Connection growth more than 17k across
all other remaining products and brands. This includes
13k in Telco connections and 4k in Gas connections
•High forward curve pricing has seen strong contract
renewal prices through HY24. C&I yields (including
physical sales and end user CfDs) up $10/MWh relative
to PCP as a result of contracts repricing due to a
sustained higher electricity forward curve
•Sales yields in Mass Market segment was $6/MWh
higher in HY24 relative to PCP. Increases primarily driven
by relative price rises in addition to reductions in direct
costs, through reduced retention and acquisition
expenses
1
Gas includes both reticulated gas and LPG
342
336
331
328328
327
324
574574
579
585
590
584
579
46
45
45
45
46
47
47
95
96
98
100
102
102
102
130128
161
162
168
172
174
0
200
400
600
800
1,000
Q1
FY21
Q2
FY21
Q3
FY21
Q4
FY21
Q1
FY22
Q2
FY22
Q3
FY22
Q4
FY22
Q1
FY23
Q2
FY23
Q3
FY23
Q4
FY23
Q1
FY24
Q2
FY24
Total Connections ('000)
ElectricityTelcoGas
1734
1703
1555
1438
1373
2287
2363
1242
1202
1323
1611
1607
1840
1751
0
1,000
2,000
3,000
4,000
5,000
HY18HY19HY20HY21HY22HY23HY24
Sales Volume (GWh)
C&I (includes physical and financial sales)Mass Market (includes Trustpower retail)
0
1
2
3
FY20FY21FY22FY23HY24
'BBB+ RangeNet Debt ($b)Debt/EBITDA
FINANCIAL – STRONG BALANCE SHEET SUPPORTS FURTHER INVESTMENT.
19
Key messages
•Debt/EBITDA
1
at 2.0x for FY24, consistent with FY23
•Capital structure flexibility enables growth
•S&P Global re-affirmed Mercury’s credit rating of
BBB+/stable in December 2023
•Mercury targets Debt/EBITDA between 2x-3x after
adjusting for S&P Global treatment, consistent with
our BBB+ rating
•Mercury commenced a Dividend Reinvestment Plan
(DRP) in FY22, which remains active
Forecast Debt/EBITDA provides platform for growth
1
Adjusted for actual / expected S&P Global treatment, based on FY24 EBITDA guidance
0
100
200
300
400
500
20242025202620272028202920302031205020512052
$m
Financial Year
Commercial PaperUndrawn Bank FacilitiesUndrawn Rolling Bank FacilitiesDrawn Bank FacilitiesUS Private Placement
AUD Green BondsCapital BondsDomestic Wholesale Green BondsRetail Green Bonds
1
Requires 18 months notice of termination from lender
20
Debt maturities as at 31 December 2023
•Diversified funding sources: commercial paper, bank facilities, domestic wholesale bonds, retail bonds, AUD wholesale
bonds, USPP and capital bonds
•Planning for $300m Capital Bond (MCY020) refinancing in Jul-2024
1
FINANCIAL – DIVERSIFIED FUNDING PROFILE.
•Geothermal output down due to issues at Kawerau and Ngā Tamariki (now resolved)
•Improved LWAP/GWAP compared to expectation
•Yield growth in C&I customers with futures prices remaining elevated
•Settlement residual related to loss and constraint rentals
FY24 EBITDAF guidance updated to $880m on mean hydro generation (4,067GWh) subject to hydrological volatility,
wholesale market conditions and any material adverse events, significant one-off expenses or other unforeseeable
circumstances
•
FY24 ordinary dividend guidance unchanged at 23.3cps (up 7% on FY23)
•
FY24 stay-in-business capital expenditure guidance of $135m down $25m from original guidance mainly due to lower
geothermal drilling spend
21
Decrease Increase
FINANCIAL – FY24 GUIDANCE UPDATED.
835
880
43
9
20
(12)
(15)
700
750
800
850
900
Initial
guidance
Geothermal
output down
Improved
LWAP/GWAP
C&I sales
yield
Settlement
residual
Operating
expenses
FY24
Guidance
EBITDAF ($m)
22
SUMMARY – KEY MESSAGES.
Outlook for the second half
•525GWh per annum stage 2 wind farm at Kaiwera
Downs in advanced stages of approval
•Single retail platform to further leverage our scale and
grow our position as NZ’s leading multi-product utility
•Alternative drilling rig contractor to be confirmed
•Advocating strongly for taking whole-of-system view of
energy transition
•FY24 ordinary dividend guidance unchanged at 23.3cps
(up 7% on FY23). This will be the 16
th
consecutive year of
ordinary dividend growth
•FY24 EBITDAF guidance updated to $880 million
subject to hydrological conditions and any material
adverse event or unforeseeable circumstances. FY24
Capex guidance reduced to $135 million
First half summary
•390GWh Ngā Tamariki geothermal station expansion
was announced and construction is underway
•147GWh per annum Kaiwera Downs stage 1 wind farm
was completed on time and under budget
•Strong Trading Margin from diversified renewable
generation portfolio
•Our geothermal drilling campaign has experienced
delays. We have terminated our drilling services contract
and currently negotiating an alternative drilling rig
contractor to complete the campaign
•9.3cps interim dividend declared (7% higher than HY23)
•Higher operating expenditure from inflation, full period
of NOW, new wind generation, maintenance capability
and insurance
•Retail integration programme completed, synergies on
track to be delivered
23
Q&A
Maraetai 1 and 2
---
2024
INTERIM
REPORT
22
03 CHAIR & CHIEF EXECUTIVE UPDATE
08 OUR FINANCIALS
09 INDEPENDENT AUDITOR’S REVIEW REPORT
10 FINANCIAL STATEMENTS
26 SHAREHOLDER INFORMATION
26 DIRECTORY
CONTENTS.
3
This required collaboration with others seeking to create a future
where communities and Aotearoa are thriving — an outcome
which positions Mercury for similar success.
This update is the first with our new Chair, Scott St John.
We extend our thanks to Prue Flacks for her substantial
contribution over the last 13 years, and particularly during her
four-year tenure as Mercury’s Chair. Her exemplary leadership
has helped set us up for our next stage of growth.
CHAIR &
CHIEF EXECUTIVE
U P DAT E .
New Zealand’s renewable energy sector is on a significant
growth trajectory as it looks to meet the electrification
opportunity ahead, and Mercury is committed to supporting
that shift. The scale of the opportunity is material – renewable
electricity is expected to account for nearly 60% of New
Zealand’s energy consumption by 2050, up from about
20% today
1
.
As a result, the first half of the 2024 financial year has been
one of action as we pursue our growth ambitions. We made
substantial headway on our renewable energy and retail
goals, delivering on our purpose: Taking care of tomorrow:
Connecting people and place today; Tiakina te anamata,
mā te tūhono i ngā tāngata me ngā wāhi o te inamata.
SCOTT ST JOHN // CHAIR
VINCE HAWKSWORTH // CHIEF EXECUTIVE
KIA ORA AND WELCOME TO
MERCURY’S SIX-MONTH UPDATE
TO 31 DECEMBER 2023.
Scott St John, Chair and Vince Hawksworth, Chief Executive
1
Boston Consulting Group, ‘Future is Electric’, 2021.
FINANCIAL PERFORMANCE REFLECTS BUSINESS GROWTH
• EBITDAF reflects increased investment in new renewables, strong yields.
• FY24 guidance increased to $880 million mostly due to better pricing
outcomes in generation and wholesale segment.
WORKING TOGETHER
• Contributed to the proposed Sector and Government energy
transition framework.
• Advocated for supportive policy including clarity on the role of gas;
clear consenting regime; demand-side policies and network
& transmission investment.
ENABLING A PATHWAY TO GREATER ELECTRIFICATION
• Completed Kaiwera Downs 1 wind farm (43MW) on time and under budget.
• Building a fifth generating unit at our Ngā Tamariki geothermal station (46MW).
• Seeking Expressions of Interest for a new solar development (100MW)
commencing 2026.
BUILDING CAPABILITY AND PRODUCTIVITY
• Further embedded adaptive ways of working into our organisation.
• Made changes to our organisational structure to support better performance.
• Focussed on growing talent, with adaptive leadership and diverse emerging
leaders programmes performing strongly.
EMPOWERING CUSTOMERS THROUGH INNOVATION
• Mercury & Trustpower transition nearing completion, providing a solid platform
on which we can deliver greater value for customers.
• Supporting customers in hardship a key focus; completed joint research
into hidden hardship with Genesis and began progressing several solutions.
4
$434M
p
EBITDAF
NET PROFIT
$ 174M
p
OPERATING
EXPENDITURE
$191M
o
WIND GENERATION
1,109GWH
o
FINANCIAL OVERVIEW
Mercury’s net profit after tax was $174 million for the half
year, down $65 million on the prior comparable period due
to higher depreciation, interest charges and net changes
in fair value. Mercury reported EBITDAF
2
of $434 million,
$17 million down on the prior comparable period. This is a
strong performance given the much higher hydro generation
during HY23. Earnings for the current period were positively
influenced by our ongoing investment in renewables together
with higher prices. Wind generation increased to 1,109 GWh
as we continued to deliver on our renewable ambitions, with
the full contribution generation from Turitea South and
commissioning of Kaiwera Downs 1 wind farms.
Operational expenditure of $191 million was up $31 million
reflecting increases in employee related expenses and
maintenance expenses mostly from wind contracts.
Stay-in-business capital expenditure for the period was
$60 million (up $29 million). Growth capital expenditure
was $70 million (up $26 million) and largely related to
construction costs incurred for the addition of a fifth unit
at our Ngā Tamariki geothermal station and completion
of the Kaiwera Downs 1 wind farm near Gore.
Net debt was $1,983 million, up $76 million primarily due
to higher interest and tax paid combined with a lift in
capital expenditure on new generation projects and
geothermal drilling.
FY24 EBITDAF guidance has increased to $880 million
from $835m, mostly due to better pricing outcomes in
our generation and wholesale segment. This assumes
mean hydro generation (4,067GWh) and is subject to
future hydrological volatility, wholesale market conditions
and any material adverse events, significant one-off
expenses or other unforeseeable circumstances.
INTERIM DIVIDEND
The Board has declared a fully imputed interim dividend of 9.3
cents per share, up almost 7% on the HY23 dividend. Full year
dividend guidance is unchanged at 23.3 cents per share expected
to be the 16th consecutive year of ordinary dividend growth.
Our Dividend Reinvestment Plan continues, with shareholders able
to reinvest their dividends into Mercury shares with a 2% discount.
9. 3CPS
INTERIM DIVIDEND
DECLARED
EARNINGS FOR THE CURRENT PERIOD
WERE POSITIVELY INFLUENCED BY OUR
ONGOING INVESTMENT IN RENEWABLES
TOGETHER WITH HIGHER PRICES.
DISCOUNT ON DIVIDEND
REINVESTMENT PLAN
2%
SNAPSHOT.
2
EBITDAF: Earnings before net interest expense, tax expense, depreciation and
amortisation, and unrealised change in fair value of financial instruments and carbon.
5
ELECTRIFICATION.
We are pleased to have progressed two of the three major
projects expected in this timeframe.
The first wave of this investment commitment was
announced in September with the decision to build a fifth
generating unit at our Ngā Tamariki geothermal station,
which will boost our generation output by net 46MW
(390 GWh p.a.). Our key supplier on this project, Ormat
Technologies, has been impacted by the situation in Gaza
and we are monitoring this carefully. We are not currently
expecting delivery timeframes to be materially impacted.
Regarding the second wave of this investment commitment,
contractor. We are currently in the process of negotiating an
alternative contractor to complete our drilling campaign and
expect to engage a new provider in the near future.
Following the period end, we were pleased to issue a request
for Expressions of Interest for an offtake agreement for
100MW of solar energy, commencing in 2026. We see this
as an important step towards further diversification of our
renewable energy portfolio, and a meaningful way to support
the role that independent generators play in New Zealand’s
energy market.
A PATHWAY TO GREATER
we are at the advanced stages of approving the development
of Kaiwera Downs 2 wind farm (155MW). The project is
expected to reach Final Investment Decision this financial year.
The third signalled project, Kaiwaikawe wind farm, is
experiencing delays related to procurement and construction
logistics which will likely delay construction commencement
into FY25.
In November we celebrated the opening of the Kaiwera
Downs 1 wind farm (43MW), with the project completing
under budget and on schedule. This is testament to the
capability of our team and contractors together with
consistent, transparent engagement with the surrounding
community. We are mindful of the ongoing role we will play
in this community and continue to focus on engagements
that foster shared value over the long term.
Our geothermal drilling campaign has experienced delays
and we have terminated our contract with the drilling rig
During the period we focused on executing
against our signalled commitment of up
to $1 billion investment over the financial
year to generation development over the
next three years.
4,486GWH
HY24
GENERATION
331GWH
p
DECREASE ON
PRIOR PERIOD
ENABLING
In December we achieved our goal to bring Mercury and Trustpower (people, processes,
systems) together following our acquisition of the Trustpower retail business in May 2022.
This included migrating all Mercury brand mass market
customers onto a single technology stack, a key step
towards unlocking benefits from the acquisition.
This gives us a solid platform on which we can deliver greater
value for customers in terms of choice, enhanced experience,
and the delivery of new and innovative solutions. We now
have a range of energy, broadband and mobile bundled
offers available to all customers, and we have begun
developing ‘smart’ solutions for EV owners and customers
who want greater control over their energy use.
The business remains on track to realise the integration
synergies previously forecast, with the majority expected
in FY25.
Managing affordability will be a key challenge as the energy
transition progresses and we continue to work with the sector,
community, Government and others on this, including with
our partners and suppliers to manage costs. We also continue
to have an open conversation about the impact of cumulative
changes on affordability, including distribution and
transmission investment, growth in intermittent renewables,
New Zealand’s Emissions Trading Scheme and near-term
inflation, skilled worker shortages and supply chain issues.
In addition to participating in these conversations,
we continue to strengthen the support we provide for
customers in hardship recognising the persistent nature of
this challenge, including developing solutions that address
the broader challenges related to affordability. During the
period we completed our joint research into hidden hardship
with Genesis and began progressing solutions which were
co-designed with community groups. We also completed
phase one of a Winter Energy Study in partnership with
Kāinga Ora – Homes and Communities trialling how
capped bills could benefit customers over winter.
We will lift electricity prices for most customers this financial
year. The business will continue to offer targeted measures
to support those most in need.
EMPOWER NG
CUSTOMERS
THROUGH
THIS GIVES US A SOLID PLATFORM ON WHICH WE
CAN DELIVER GREATER VALUE FOR CUSTOMERS IN
TERMS OF CHOICE, ENHANCED EXPERIENCE, AND THE
DELIVERY OF NEW AND INNOVATIVE SOLUTIONS.
.
6
77
CLOSING REMARKS
We thank our people and our partners
for what they have helped Mercury
achieve in the first half of the 2024
financial year.
We are focussed on supporting
New Zealand’s electrified, digitalised
future and believe that by enabling
electrification, innovating for customers
and collaborating with others we can
help unlock a thriving future for our
business and New Zealand.
We thank you for your continued
support and look forward to updating
you on further progress at the financial
year end.
Ngā mihi nui ki a koutou katoa.
SCOTT ST JOHN
CHAIR
VINCE HAWKSWORTH
CHIEF EXECUTIVE
Collective action and whole-of-system thinking
will be critical to unlocking the infrastructure
investment needed for prosperity through the
energy transition.
Over the period we contributed to the proposed Sector and
Government energy transition framework. The group is now
actively seeking to partner with the Government on the framework
to enable the system-wide approach this mechanism supports.
We also continued to participate in other cross-sector forums
to help us address shared obstacles to the delivery of renewables
at pace, including supply chain and workforce issues.
We remain mindful of the role that supportive policy will play
in accelerating the electrification of New Zealand’s economy
in an inclusive way. We welcome the clarity provided on Onslow
and continue to advocate for: clarity on the role of gas to ensure
security of supply; a clear consenting regime to enable renewable
development at pace while maintaining social licence; demand-
side policies that support electrification for households, businesses
and large-scale initiatives; and network and transmission
investment that supports a smart electricity system.
BUILDINGCAPABILITY
& PRODUCTIVITY.
As the scale of the opportunity that
electrification presents continues to grow,
our people and the ways we work become
increasingly important to our ability to
drive value.
During the period we further embedded adaptive ways of
working into our organisation, fostering more dynamic decision
making in the face of change. We have taken lessons from our
retail integration programme and are applying these to other
parts of the business.
We also made changes to our organisational structure to
support better performance. This includes converging around
three core business units, supported by three enabling units.
Our focus on growing talent also continued, with our adaptive
leadership and diverse emerging leaders programmes both
performing strongly.
Finally, we are well progressed in rolling out our enhanced
health, safety and wellbeing programme across the business,
building a stronger culture of safety. There have been no
recordable injuries for the half year (excluding offsite lost time
injuries), while the 12-month rolling TRIFR (Total Recordable
Injury Frequency Rate) was 0.21, significantly down on TRIFR
for the prior two years.
However, we are not complacent and acknowledge that it is
important that we continue to reflect on previous incidents.
In December, after careful consideration Mercury made the
decision to plead not guilty to two WorkSafe charges related
to the Rotokawa steam hammer incident from July 2021
and we continue to work through this process.
8
CONTENTS.
GROUP FINANCIAL STATEMENTS
10 CONSOLIDATED INCOME STATEMENT
10 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
11 CONSOLIDATED BALANCE SHEET
12 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
12 CONSOLIDATED CASH FLOW STATEMENT
NOTES TO THE FINANCIAL STATEMENTS
13 GENERAL INFORMATION & SIGNIFICANT MATTERS
A. FINANCIAL PERFORMANCE
14 A1. REVENUE
15 A2. SEGMENT REPORTING
B. OPERATING ASSETS
17 B1. PROPERTY, PLANT & EQUIPMENT
17 B2. INTANGIBLE ASSETS
C. FUNDING
18 C1. SHARE CAPITAL & DISTRIBUTIONS
18 C2. BORROWINGS
18 C3. NET INTEREST EXPENSE
19 C4. COMMITMENTS AND CONTINGENCIES
D. GROUP STRUCTURE
20 D1. ASSOCIATES & JOINT ARRANGEMENTS
20 D2. RELATED PARTY TRANSACTIONS
E. RISK
22 E1. DERIVATIVE FINANCIAL INSTRUMENTS
F. O T H E R
25 F1. SUBSEQUENT EVENTS & OTHER MATTERS
OUR FINANCIALS.
Kaiwera Downs 1 Wind Farm
9
Directors’ responsibilities for the
consolidated interim financial statements
The Directors are responsible, on behalf of the
Group, for the preparation and fair presentation
of these consolidated interim financial statements
in accordance with NZ IAS 34 and IAS 34 and
for such internal control as the Directors
determine is necessary to enable the preparation
and fair presentation of the consolidated interim
financial statements that are free from material
misstatement, whether due to fraud or error.
The Directors are also responsible for the
publication of the consolidated interim financial
statements, whether in printed or electronic form.
Auditors’ responsibilities for the review of the
consolidated interim financial statements
Our responsibility is to express a conclusion on the
consolidated interim financial statements based
on our review. NZ SRE 2410 (Revised) requires
us to conclude whether anything has come to
our attention that causes us to believe that the
consolidated interim financial statements, taken as
a whole, are not prepared, in all material respects,
in accordance with NZ IAS 34 and IAS 34.
A review of the consolidated interim financial
statements in accordance with NZ SRE 2410
(Revised) is a limited assurance engagement.
We perform procedures, primarily consisting of
To the shareholders of Mercury NZ Limited
The Auditor-General is the auditor of Mercury NZ
Limited (‘the Company’). The Auditor-General
has appointed me, Emma Winsloe, using the
staff and resources of Ernst & Young, to carry out
the review of the consolidated interim financial
statements of the Group (comprising the
Company, its subsidiaries, and other controlled
entities) on his behalf.
Conclusion
We have reviewed the consolidated interim
financial statements of the Group on pages 10 to
25, which comprise the consolidated balance sheet
as at 31 December 2023, and the consolidated
income statement, consolidated statement of
comprehensive income, consolidated statement
of changes in equity and consolidated cash
flow statement for the six months ended on
that date, and the notes, including a summary
of significant accounting policies and other
explanatory information.
Based on our review, nothing has come to
our attention that causes us to believe that
the consolidated interim financial statements
of the Group do not present fairly, in all material
respects, the consolidated financial position
of the Group as at 31 December 2023, and its
consolidated financial performance and cash
flows for the six months ended on that date,
in accordance with New Zealand Equivalent to
International Accounting Standard 34:
Interim
Financial Reporting
(‘NZ IAS 34’) and International
Accounting Standard 34:
Interim Financial
Reporting
(‘IAS 34’).
Basis for Conclusion
We conducted our review in accordance with
NZ SRE 2410 (Revised)
Review of Financial
Statements Performed by the Independent
Auditor of the Entity
(‘NZ SRE 2410 (Revised)’).
Our responsibilities are further described in the
Auditor’s Responsibilities for the Review of the
Interim Financial Statements
section of our report.
We are independent of the Group in accordance
with the independence requirements of the Auditor-
General’s Auditing Standards, which incorporate the
independence requirements of Professional and
Ethical Standard 1
International Code of Ethics for
Assurance Practitioners
issued by the New Zealand
Auditing and Assurance Standards Board.
In addition to the audit, we have carried out
engagements in the areas of agreed upon
procedures and other limited assurance
engagements, which are compatible with those
independence requirements. Other than the
audit and these engagements, we have no
relationship with or interests in the Group.
Emma Winsloe
Ernst & Young
On behalf of the Auditor-General
Auckland, New Zealand
20 February 2024
Independent auditor’s
review report
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) and consequently do
not enable us to obtain assurance that we would
become aware of all significant matters that might
be identified in an audit. Accordingly, we do not
express an audit opinion on these consolidated
interim financial statements.
A member firm of Ersnt & Young Global Limited
10
FINANCIAL STATEMENTS.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME.
For the six months ended 31 December 2023
Note
Unaudited
6 Months
31 Dec 2023
$M
Restated
Unaudited
6 Months
31 Dec 2022
$M
Restated
Audited
12 Months
30 Jun 2023
$M
Profit for the year attributable to owners of the parent174 239 112
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Change in asset revaluation reserve - - 113
Change in cash flow hedge reserve transferred to balance sheet 1 - 2
Share of movements in associates’ and joint ventures’ reservesD1 (2)(1)11
Tax ef fe c t - - (31)
Items that may be reclassified subsequently to profit or loss
Change in cash flow hedge reserve (108)(52)212
Share of movements in associates’ and joint ventures’ reservesD1 - 5 -
Tax ef fe c t 29 15 (60)
Other comprehensive income/(loss) for the period, net of taxation (81)(33)247
Total comprehensive income for the period attributable to owners of the parent
93 207 359
CONSOLIDATED INCOME STATEMENT.
For the six months ended 31 December 2023
Note
Unaudited
6 Months
31 Dec 2023
$M
Restated
Unaudited
6 Months
31 Dec 2022
$M
Restated
Audited
12 Months
30 Jun 2023
$M
Revenue
A21,605 1,300 2,730
Expenses
A2(1,214)(848)(1,900)
Depreciation and amortisation
B1, B2(178)(161)(344)
Impairment
B2- - (12)
Revaluation loss of generation assets
B1- - (41)
Change in the fair value of financial instruments
E165 68 (159)
Change in the fair value of carbon units held for trading
32 (3) (36)
Share of profit/(loss) from associates and joint ventures
D1(2) (1)5
Gain/(loss) on acquisitions and disposal
-11 12
Interest income
A2, C33 2 3
Interest expense
A2, C3(66)(49)(103)
Profit before tax
245 319 155
Tax exp e ns e
(71)(80)(43)
Profit for the year attributable to owners of the parent
174 239 112
Basic and diluted earnings per share (cents)
12.53 17. 30 8.11
11
SCOTT ST JOHN // CHAIR
OF THE BOARD OF DIRECTORS
JAMES MILLER // CHAIR OF THE RISK
ASSURANCE AND AUDIT COMMITTEE
The accompanying notes form an integral part of these financial statements.
CONSOLIDATED BALANCE SHEET.
As at 31 December 2023
Note
Unaudited
31 Dec 2023
$M
Restated
Unaudited
31 Dec 2022
$M
Restated
Audited
30 Jun 2023
$M
SHAREHOLDERS’ EQUITY
Issued capital 378 378 378
Treasury sharesC1 (23) (38) (34)
Reserves 4,445 4,480 4,519
Total shareholders’ equity 4,800 4,820 4,863
ASSETS
Current assets
Cash and cash equivalents 82 53 75
Trade and other receivables 505 394 440
Contract assets and costs 33 28 32
Inventories 145 121 91
Derivative financial instrumentsE1 263 314 201
Total current assets 1,028 910 839
Non-current assets
Property, plant and equipmentB1 8,080 7,979 8,099
Intangible assetsB2 127 156 138
Investment in and advances to associates and joint venturesD1 74 70 80
Advances to joint operationsD2 3 3 4
Trade and other receivables - 3 1
Contract assets and costs 17 12 15
Derivative financial instrumentsE1 189 458 243
Total non-current assets 8,490 8,681 8,580
Total assets 9,518 9,591 9,419
Note
Unaudited
31 Dec 2023
$M
Restated
Unaudited
31 Dec 2022
$M
Restated
Audited
30 Jun 2023
$M
LIABILITIES
Current liabilities
Payables and accruals 367 277 344
Provisions - - 3
BorrowingsC2 453 462 375
Derivative financial instrumentsE1 264 324 186
Taxation payable29 38 44
Total current liabilities 1,113 1,101 952
Non-current liabilities
Provisions 86 83 81
Derivative financial instrumentsE1 230 480 243
BorrowingsC2 1,567 1,352 1,523
Deferred tax 1,722 1,755 1,757
Total non-current liabilities 3,605 3,670 3,604
Total liabilities 4,7 18 4,7 7 1 4,556
Net assets 4,800 4,820 4,863
For and on behalf of the Board of Directors who authorised the issue of the Financial Statements on 20 February 2024.
12
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY.
For the six months ended 31 December 2023
Note
Issued
capital
$M
Retained
earnings
$M
Asset
revaluation
reserve
$M
Cash flow
hedge
reserve
$M
Other
reserves
$M
Tot al
equity
$M
Balance as at 1 July 2022378 516 4,153 (245)(50) 4,752
Adjustment on restatement of PPA valuation
(see Significant Matters)
- 5 - - - 5
Restated balance as at 1 July 2022 378 521 4,153 (245)(50) 4,757
Movement in cash flow hedge reserve, net of taxation - - - (37) - (37)
Share of movements in associates’ and joint
ventures’ reserves
- - (1) 5 - 4
Other comprehensive income - - (1) (32) - (33)
Net profit/(loss) for the period - 239 - - - 239
Total comprehensive income for the year - 239 (1)(32) - 206
DividendC1 - (166) - - - (166)
Issue of treasury shares for dividend reinvestment programC1 - 11 - - 12 23
Restated balance as at 31 December 2022 (unaudited)378 605 4,152 (277)(38)4,820
Restated balance as at 1 January 2023 378 605 4,152 (277) (38) 4,820
Movement in asset revaluation reserve, net of taxation - - 82 - - 82
Movement in cash flow hedge reserve, net of taxation - - - 191 - 191
Share of movements in associates’ and joint
ventures’ reserves
- - 1 6 - 7
Other comprehensive income - - 83 197 - 280
Net profit/(loss) for the period - (127) - - - (127)
Total comprehensive income for the year - (127) 83 197 - 153
DividendC1 - (120) - - - (120)
Issue of treasury shares for dividend reinvestment programC1 - 4 - - 1 5
Sale of treasury sharesC1 - 2 - - 3 5
Restated balance as at 30 June 2023 (audited)378 364 4,235 (80)(34)4,863
Restated balance as at 1 July 2023 378 364 4,235 (80) (34) 4,863
Movement in cash flow hedge reserve, net of taxation - - - (79) - (79)
Share of movements in associates’ and joint
ventures’ reserves
- - - (2) - (2)
Other comprehensive income - - - (81) - (81)
Net profit/(loss) for the period - 174 - - - 174
Total comprehensive income for the year - 174 - (81) - 93
DividendC1 - (182) - - - (182)
Issue of treasury shares for dividend reinvestment programC1 - 15 - - 10 25
Issue of treasury shares for long term incentive schemeC1 - - - - 1 1
Balance as at 31 December 2023 (unaudited) 378 371 4,235 (161) (23) 4,800
The ‘Other reserves’ category includes treasury shares, the foreign currency translation reserve and the share based payment reserve.
CONSOLIDATED CASH FLOW STATEMENT.
For the six months ended 31 December 2023
Unaudited
6 Months
31 Dec 2023
$M
Unaudited
6 Months
31 Dec 2022
$M
Audited
12 Months
30 Jun 2023
$M
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 1,532 1,332 2,620
Payments to suppliers and related parties (1,011) (828) (1,687)
Payments to employees (85) (70) (147)
Interest received 3 2 3
Interest paid (63) (45) (104)
Taxe s pa i d (93) (46) (107)
Net cash provided by operating activities 283 345 578
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisition of property, plant and equipment (132)(75)(250)
Payments for acquisition of intangibles (14)(15)(47)
Payments for acquisition of NOW New Zealand - (17)(17)
Distributions received from/(Advances paid to) associates
and joint ventures
2 3 6
(Lodgements)/return of prudential deposits (37)(5)37
Net cash (used)/received in investing activities (181)(109)(271)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 430 115 509
Repayment of borrowings (359) (214) (544)
Principal repayment of lease liabilities (9) (6) (9)
Proceeds from the sale of treasury shares - - 5
Dividends paid (157) (143) (258)
Net cash (used)/received in financing activities (95)(248)(297)
Net increase/(decrease) in cash and cash equivalents held 7 (12) 10
Cash and cash equivalents at the beginning of the period 75 65 65
Cash and cash equivalents at the end of the period 82 53 75
Cash balance comprises:
Cash balance at the end of the period 82 53 75
The accompanying notes form an integral part of these financial statements.
13
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
GENERAL INFORMATION
AND SIGNIFICANT MATTERS.
General information.
These unaudited consolidated financial statements (“Group
financial statements”) are for Mercury NZ Limited Group
(“the Group”). The Group financial statements comprise
Mercury NZ Limited ("the Company") as the parent, and
its subsidiaries, including its investments in associates
and interests in joint arrangements.
The Company is incorporated in New Zealand and
registered under the Companies Act 1993. It is listed on
the NZX Main Board and on the ASX, with foreign exempt
listed status. It also has bonds quoted on the NZX debt
market. Mercury NZ Limited is an FMC reporting entity
under the Financial Markets Conduct Act 2013.
The Company is a mixed ownership model company, majority
owned by the Government, bound by the requirements of the
Public Finance Act 1989. The liabilities of the Group are
not guaranteed in any way by the Government or by any
other shareholder.
Basis of preparation.
The unaudited Group financial statements have
been prepared:
- in accordance with the Financial Markets Conduct
Act 2013, Generally Accepted Accounting Practice in
New Zealand (“GAAP”), the New Zealand Equivalent to
International Accounting Standard 34
Interim Financial
Reporting
and International Accounting Standard 34
Interim Financial Reporting.
- on a historical cost basis, with the exception of certain
fair value measurements.
- using the same accounting policies for all reporting
periods presented, with the exception of a change in the
accounting treatment of unhedged electricity derivatives
and FTRs (see Significant Matters).
- in millions of New Zealand dollars, unless otherwise stated.
- exclusive of GST, with the exception of payables and
receivables that include GST invoiced.
These Group financial statements, including the accounting
policies adopted, do not include all the information and
disclosures required in the annual financial statements.
Beyond those disclosed below, the Group financial statements
have been prepared using the same accounting policies as,
and should be read in conjunction with, the Group’s annual
financial statements for the year ended 30 June 2023.
Estimates and judgements.
The preparation of financial statements requires judgements
and estimates that impact the application of policies and
the reported amounts of assets and liabilities, income and
expenses. Actual results may differ from these estimates.
The areas of significant estimates and judgements are
as follows:
- Fair value of generation plant and equipment
(refer note B1).
- Valuation of financial instruments (refer note E1).
Unaudited
31 December
2022
$M
Adjustments
$M
Restated
Unaudited
31 December
2022
$M
CURRENT ASSETS
Derivative financial instruments340 (26) 314
NON-CURRENT ASSETS
Derivative financial instruments475 (17) 458
CURRENT LIABILITIES
Payables and accruals (303) 26 (277)
Derivative financial instruments (323) (1) (324)
NON-CURRENT LIABILITIES
Payables and accruals (19) 19 -
Derivative financial instruments (499) (1) (500)
SIGNIFICANT MATTERS.
Change in accounting treatment of unhedged
electricity derivatives.
Consistent with the Group’s 2023 annual financial statements,
realised gains and losses (settlements) on unhedged derivative
contracts for the half year are not reclassified to revenue or
expenses and continue to be recognised within the change
in fair value of financial instruments in the Consolidated
Income Statement. Settlements of unhedged derivatives
that occurred in the comparative half year period have not
been reclassified or restated in the financial statements as
the overall impact is not considered material.
Restatement on presentation of Financial Transmission
Rights (FTRs).
Consistent with the Group’s 2023 annual financial statements,
the presentation of FTRs on the Consolidated Balance Sheet
has changed to correctly reflect net settlement. Effects
of this change in presentation on the 31 December 2022
comparative Consolidated Balance Sheet are shown in
the following table:
CONSOLIDATED BALANCE SHEET.
14
A. FINANCIAL PERFORMANCE
NOTE A1. REVENUE
Mercury earns revenue from the following sources:
Electricity generation
Revenue is received from electricity generated and
sold through the wholesale markets and physical power
purchase agreements (PPAs). Revenue is recognised
at the time of generation and at the spot market or
contractual price.
Electricity and gas sales to customers
Electricity and gas sales to customers are recognised when
the energy is supplied for customer consumption.
Acquisition incentives such as credits and appliances
are offered to new customers and treated as individual
performance obligations and a portion of the expected
revenue over the life of the total contract is allocated to the
performance obligation based on their standalone selling
price and recognised immediately. Corresponding contract
assets are recognised on the balance sheet and amortised
to the income statement over the contract period as the
future consideration is billed. Incremental costs to obtain
and retain customers are recognised on the balance sheet
as contract costs and amortised to the income statement
on a straight-line basis over the expected average mass
market customer tenure.
Telco revenue
Customers consume mobile and broadband services which
are measured and billed according to monthly billing cycles
and are recognised when the service has been provided.
Acquisition incentives are treated the same as above.
Other Revenue
Revenue is received from:
- Insurance proceeds and external management
management fees. Revenue is recognised at the time
the insurance proceeds are received and the services
have been delivered.
- Sale of emission units sold to third parties. Gain on sale
is recognised at the point in time that the emission unit
is confirmed as being transferred into the acquirer’s
emission unit account.
Accounting standards, interpretations and amendments not yet effective.
There are no other accounting standards that are not yet effective that will have a material impact on the Group’s
financial statements.
Restatement of a PPA Valuation
An error has been identified in the prior period valuations of a power purchase agreement (PPA) that was acquired in
August 2021 as part of the acquisition of Tilt New Zealand assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
Consolidated Income Statement Consolidated Balance Sheet
Change in fair
value of financial
instrumentsTax expenseReserves
Non-current
derivative
financial liability
Deferred
tax liability
1 July 2022
4,424
400
1,753
Adjustments 5 (7) 2
Restated 1 July 2022 4,429 393 1,755
Unaudited 31 December 2022
55
(76)
4,466
500
1,749
Adjustments 13 (4) 14 (20) 6
Restated 31 December 2022 68 (80) 4,480 480 1,755
30 June 2023
(172)
(39)
4,505
263
1,751
Adjustments 13 (4) 14 (20) 6
Restated 30 June 2023 (159) (43) 4,519 243 1,757
15
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
A. FINANCIAL PERFORMANCE
NOTE A2. SEGMENT REPORTING
Identification of reportable segments
The operating segments are identified by management
based on the nature of the products and services provided.
Discrete financial information about each of these operating
segments is reported to the Chief Executive, being the chief
operating decision-maker, on a monthly basis, who assesses
the performance of the operating segments on a measure
of EBITDAF. EBITDAF is a non-GAAP measure that is used
internally to assess the operating performance of the Group
without the impact of non-cash and one-off or infrequent
transactions. Segment EBITDAF represents earnings before
net interest expense, tax expense, depreciation, amortisation,
unrealised change in the fair value of financial instruments,
gain/(loss) on disposal and impairments by each segment
inclusive of an allocation of central operating revenue and
costs. Operating segments are aggregated into reportable
segments only if they share similar economic characteristics.
Realised gains or losses (settlements) on unhedged electricity
swaps are reported within electricity margin for the purposes
of EBITDAF, but are reported within the change in fair value
of financial instruments in the income statement. Realised
gains or losses (settlements) on hedged electricity swaps
are reported within electricity margin for the purposes of
EBITDAF, and within revenue or expenses as appropriate
in the Consolidated Income Statement. Unrealised gains
or losses, on both hedged and unhedged electricity
swaps are not included in EBITDAF and are reported
in either change in fair value of financial instruments in
the income statement or in other comprehensive income.
A reconciliation of EBITDAF to profit before tax can be
found in the summary table of the note.
Identified segments
Generation/Wholesale
The generation/wholesale market segment encompasses
activity associated with the electricity production, electricity
trading, generation development activities and the company’s
share of associates earnings in TPC Holdings Limited (see
note D1). It also includes revenue from the sale of electricity,
to both commercial & industrial customers and the retail
segment, net settlement of energy hedges and sale of
trading emissions units to third parties.
Retail
The retail market segment encompasses activity
associated with sale of electricity, gas, telecommunication
products/services and other related products and services
to mass market customers in New Zealand.
Other
Represents corporate support services which are not
directly attributable to the generation/wholesale or retail
segments and the company’s share of associates earnings
in EnergySource LLC and EnergySource Minerals LLC.
Inter-segment
Transactions between segments represent transfer
charges by generation/wholesale to retail for the
purchase of electricity.
Changes in presentation
The segment note presentation has been updated in both
the current and comparative periods to align with current
management reporting. Notable changes are (a) the
separation of derivatives from generation revenue and (b) the
condensed reporting of electricity revenue, costs and margin.
Six months ended 31 December 2023 (Unaudited)
Generation/
Wholesale
$M
Retail
$M
Other
$M
Inter–segment
$M
Tot al
$M
Generation573 - - - 573
Sales to Customers226 669 - - 895
Inter-segment sales325 - - (325) -
Derivatives39 - - - 39
Electricity purchases (534) (325) - 325 (534)
Transmission, distribution and metering (73) (289) - - (362)
ELECTRICITY MARGIN556 55 - - 611
Gas Revenue - 54 - - 54
Gas purchases - (17) - - (17)
Transmission, distribution and metering - (23) - - (23)
GAS MARGIN - 14 - - 14
Telco Revenue - 85 - - 85
Cost of sales - (60) - - (60)
TELCO MARGIN - 25 - - 25
Other direct cost of sales (11) (21) - - (32)
TRADING MARGIN545 73 - - 618
Other Income 5 2 - - 7
Employee compensation and benefits (29) (47) (11) - (87)
Maintenance expenses (31) (8) - - (39)
Other expenses (30) (25) (10) - (65)
Allocation of corporate overheads (6) (15) 21 - -
Total operating expenses (96) (95) - - (191)
Segment EBITDAF 454 (20) - - 434
Summary and reconciliation to net profit before tax
Revenue1,120 810 - (325) 1,605
Expenses (709) (830) - 325 (1,214)
Realised gain/(loss) on unhedged electricity swaps 45 - - - 45
Share of profit/(loss) from associates and joint ventures (2) - - - (2)
Segment EBITDAF 454 (20) - - 434
Change in fair value of carbon units held for trading 32
Unrealised gain/(loss) on unhedged derivatives and hedge
ineffectiveness through income statement
20
Interest income 3
Interest expense (66)
Depreciation and amortisation (178)
Profit before tax 245
SEGMENT RESULTS
16
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
Restated twelve months ended 30 June 2023 (Audited)
Generation/
Wholesale
$M
Retail
$M
Other
$M
Inter–
segment
$M
Tot al
$M
Generation766 - - - 766
Sales to Customers442 1,206 - - 1,648
Inter-segment sales529 - - (529) -
Derivatives59 - - - 59
Electricity purchases (656) (529) - 529 (656)
Transmission, distribution and metering (119) (531) - - (650)
ELECTRICITY MARGIN1,021 146 - - 1,167
Gas Revenue - 89 - - 89
Gas purchases - (29) - - (29)
Transmission, distribution and metering - (41) - - (41)
GAS MARGIN - 19 - - 19
Telco Revenue - 155 - - 155
Cost of sales - (105) - - (105)
TELCO MARGIN - 50 - - 50
Other direct cost of sales (35) (38) - - (73)
TRADING MARGIN986 177 - - 1,163
Other Income21 1 2 - 24
Employee compensation and benefits (46) (84) (18) - (148)
Maintenance expenses (54) (16) - - (70)
Other expenses (54) (62) (12) - (128)
Allocation of corporate overheads (9) (21) 30 - -
Total operating expenses (163) (183) - - (346)
Segment EBITDAF844 (5) 2 - 841
Summary and reconciliation to net profit before tax
Revenue1,809 1,450 - (529) 2,730
Expenses (973) (1,456) - 529 (1,900)
Realised gain/(loss) on unhedged electricity swaps6 - - - 6
Share of profit/(loss) from associates and joint ventures2 1 2 - 5
Segment EBITDAF844 (5) 2 - 841
Gain/(loss) on disposal12
Impairment (12)
Revaluation loss of generation assets (41)
Change in fair value of carbon units held for trading (36)
Unrealised gain/(loss) on unhedged derivatives and hedge
ineffectiveness through income statement
(165)
Interest income3
Interest expense (103)
Depreciation and amortisation (344)
Profit before tax155
Restated six months ended 31 December 2022 (Unaudited)
Generation/
Wholesale
$M
Retail
$M
Other
$M
Inter–
segment
$M
Tot al
$M
Generation307 - - - 307
Sales to Customers210 621 - - 830
Inter-segment sales44 - - - 44
Derivatives271 - - (271) -
Electricity purchases (248) (271) - 271 (248)
Transmission, distribution and metering (58) (269) - - (327)
ELECTRICITY MARGIN526 81 - - 607
Gas Revenue - 46 - - 46
Gas purchases - (17) - - (17)
Transmission, distribution and metering - (21) - - (21)
GAS MARGIN - 8 - - 8
Telco Revenue - 65 - - 65
Cost of sales - (46) - - (46)
TELCO MARGIN - 19 - - 19
Other direct cost of sales (14) (15) (1) - (30)
TRADING MARGIN512 93 (1) - 604
Other income5 2 - - 7
Employee compensation and benefits(22)(40)9) - (71)
Maintenance expenses(23)(8)- - (31)
Other expenses(27)(26)(5) - (58)
Allocation of corporate overheads(4)(10)14 - -
Total operating expenses (76) (84) - - (160)
Segment EBITDAF441 11 (1) - 451
Summary and reconciliation to net profit before tax
Revenue837 734 - (271) 1,300
Expenses (395) (723) - 271 (848)
Realised gain/(loss) on unhedged electricity swaps - - - - -
Share of profit/(loss) from associates and joint ventures - - (1) - (1)
Segment EBITDAF441 11 (1) - 451
Gain/(loss) on disposal11
Change in fair value of carbon units held for trading (3)
Unrealised gain/(loss) on unhedged derivatives and hedge
ineffectiveness through income statement
68
Interest income2
Interest expense (49)
Depreciation and amortisation (161)
Profit before tax 319
17
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
B. OPERATING ASSETS
NOTE B1. PROPERTY, PLANT AND EQUIPMENT
NOTE B2. INTANGIBLE ASSETS
Unaudited
6 Months
31 Dec 2023
$M
Unaudited
6 Months
31 Dec 2022
$M
Audited
12 Months
30 Jun 2023
$M
Opening net book value 8,099 8,080 8,080
Additions 134 41 246
Additions in relation to the acquisition of NOW New Zealand assets - 4 4
Disposals - - (7)
Gain on revaluation - - 110
Loss on revaluation - - (41)
Depreciation charge for the year (153) (146) (293)
Closing net book value 8,080 7,979 8,099
Property, plant and equipment includes $102m of right-of-use assets (30 June 2023: $87m, 31 December 2022: $92m).
Unaudited
6 Months
31 Dec 2023
$M
Unaudited
6 Months
31 Dec 2022
$M
Audited
12 Months
30 Jun 2023
$M
Opening net book value 138 123 123
Additions 17 8 47
Additions in relation to the acquisition of NOW Broadband New Zealand - 40 41
Impairment - - (13)
Surrendered units (2)- (9)
Amortisation for the year (25)(15) (51)
Closing net book value 127 156 138
Intangible assets consist of software, acquired intangible assets (NOW customer list), rights (mainly land access rights), and carbon units held for
settling emissions obligations. All intangible assets are deemed to have a finite useful life.
ASSETS CARRYING VALUES
All assets, except generation plant and equipment, are
recognised at cost less accumulated depreciation. Fixed
assets, excluding land, are depreciated on a straight line
basis over their expected useful lives.
Generation plant and equipment is originally recognised at cost
and subsequently measured at fair value less accumulated
depreciation. An independent valuation is completed annually
to determine the fair value of these assets.
Assets carried at fair value
All generation assets shown at valuation were revalued using
a net present value methodology by PricewaterhouseCoopers,
an independent valuer, as at 30 June 2023.
AREA OF KEY JUDGEMENT
Generation asset valuation
The key assumptions used in the valuation include
the forecast of the future wholesale electricity price path,
generation volumes, projected operational and capital
expenditure and asset life assumptions and discount rates.
In all cases there is an element of judgement required as
valuations make use of unobservable inputs. The valuation
also assumes the on-going operation of New Zealand
Aluminium Smelter Limited at Tiwai Point, no material
changes to the wholesale market regulatory regime, hydro
and geothermal fuel supply being sustained over the
modelled horizon and no material changes to generation
consent conditions.
Generation assets are classified as level three in the fair value
hierarchy due to the use of non-market observable inputs
in the valuation. Keeping all other valuation inputs constant,
the valuation is most sensitive to future wholesale electricity
price path and discount rate. A review of the key inputs used
in the valuation of generation assets as at 30 June 2023,
indicates that there has been no material change in the fair
value of the generation assets as at 31 December 2023.
18
Unaudited 6 Months
31 Dec 2023
$M
Unaudited 6 Months
31 Dec 2022
$M
Audited 12 Months
30 Jun 2023
$M
Interest expense on borrowings65 46 101
Interest expense on lease liabilities2 3 6
Unwind of discount on provisions2 2 3
Less capitalised interest(3) (3) (9)
Total interest expense66 48101
Interest income(3) (2) (3)
Net interest expense63 46 98
The Group is capitalising interest costs related to the construction of new generation assets. The average rate used to determine the amount of borrowing costs
eligible for capitalisation as at 31 December 2023 was 6.42% (30 June 2023 6.28%).
Debt measured at amortised cost
Borrowing
Currency
DenominationMaturity Coupon
Unaudited
6 Months
31 Dec 2023
$M
Carrying
amount
Unaudited
6 Months
31 Dec 2022
$M
Carrying
amount
Audited
12 Months
30 Jun 2023
$M
Carrying
amount
Bank facilitiesNZDVariousFloating130 130 57
Commercial paper programmeNZD< 3 monthsFloating298 288 300
Capital bonds - MCY020NZDJul-20493.60%302 302 302
Debt in fair value hedge relationships
Wholesale bondsNZDMar-20235.79%- 25 -
USPP - US$45mUSDDec-20254.60%69 68 70
Green retail bonds - MCY040NZDSept-20262.16%185 176 179
Green retail bonds - MCY030NZDSept-20271.56%180 168 172
Green retail bonds - MCY060NZDJun-20285.64%173 - 156
Green wholesale bondsAUDNov-20282.92%195 188 193
Green wholesale bondsNZDOct-20301.92%129 116 119
Capital bonds - MCY050NZDMay-20525.73%250 24 4 245
Lease liabilities121 117 113
Deferred financing costs(12) (8) (8)
Total carrying value of loans2,020 1,814 1,898
Current453 462 375
Non-current1,567 1,352 1,523
2,020 1,814 1,898
Current borrowings include all drawn bank facilities, borrowings with a contractual maturity of less than one year, accrued interest ($12m) and current lease liabilities
($13m). Undrawn borrowing facilities at 31 December 2023 totalled $220m, net of Commercial Paper on issue. Fair value adjustment as at 31 December 2023 totalled
$45m decrease to carrying amount (30 June 2023: $84m, 31 December 2022: $109m).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
C. FUNDING
NOTE C1. SHARE CAPITAL AND DISTRIBUTION
The share capital of the Company is represented by
1,400,012,517 ordinary shares (30 June 2023: 1,400,012,517)
issued and fully paid. The weighted average number of
shares on issue during the six months ended 31 December
NOTE C2. BORROWINGS
Unaudited
31 Dec 2023
Number of
shares (M)
Unaudited
31 Dec 2023
$M
Unaudited
31 Dec 2022
Number of
shares (M)
Unaudited
31 Dec 2022
$M
Audited
30 Jun 2023
Number of
shares (M)
Audited
30 Jun 2023
$M
Treasury shares
Balance at the beginning of the period 13 34 19 50 19 50
Issue of treasury shares for dividend
reinvestment program
(4) (10) (5) (12) (5) (13)
Issue of treasury shares for long term
incentive scheme
- (1) - - - -
Sale of treasury shares - - - - (1) (3)
Balance at the end of the period 9 23 14 38 13 34
Treasury shares were issued during the interim period for the following purposes:
- The dividend reinvestment program (DRP) continued in September 2023 with the transfer of 4,059,057 shares (30 June 2023: 4,734,460,
31 December 2022: 3,949,542) to shareholders that elected to reinvest the net proceeds of cash dividends payable; and
- A total of 375,302 treasury shares worth $1m were issued for management long term incentive (LTI) payments (30 June 2023: 214,106 shares,
31 December 2022: 214,106 shares).
Cents per
share
Unaudited
31 Dec 2023
$M
Restated
Unaudited
31 Dec 2022
$M
Restated
Audited
30 Jun 2023
$M
Dividends declared and paid
Final dividend for 2022
12.0 - 166 166
Interim dividend for 2023
8.7 - - 120
Final dividend for 2023
13.1 182 - -
182 166 286
Earnings per share
Profit for the year attributable to owners of the parent ($m)
174 239 112
Weighted average ordinary shares
1,400 1,400 1,400
Less weighted average treasury shares
(11) (16) (15)
Weighted average ordinary shares for earnings per share (millions)
1,389 1,384 1,385
Basic and diluted earnings per share (cents)
12.53 17. 30 8.11
2023, on both a basic and diluted basis, was 1,388,968,889
(31 December 2022: 1,383,877,786). These shares do not
have a par value, have equal voting rights and share equally
in dividends and any surplus on winding up.
NOTE C3. NET INTEREST EXPENSE
19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
Unaudited
6 Months
31 Dec 2023
$M
Unaudited
6 Months
31 Dec 2022
$M
Audited
12 Months
30 Jun 2023
$M
Capital commitments 322 327 201
NOTE C4. COMMITMENTS AND CONTINGENCIES
Contingencies
On 7 June 2021, the Kawerau geothermal power station experienced
an unplanned outage as a result of a mechanical failure. An outage
was completed in June 2023 to install replacement equipment.
The Group received an initial payment of $26m recorded as income
in 2022, and expects to receive additional insurance proceeds in
second half of the 2024 financial year once the total loss to the
Group as a result of the incident has been confirmed. It is not
currently practical to estimate the value of additional insurance
receipts, therefore no additional revenue is recognised.
The Group holds land and has interests in fresh water and
geothermal resources that are subject to claims that have been
brought against the Crown. The Group discloses these claims
as contingent liabilities as the value, timing and likelihood of
the claims being successful are all uncertain.
The Pouakani Claims Trust No 2 and a group of kaumatua have
filed a claim in the Māori Land Court seeking a declaration that
certain parts of the Waikato riverbed on which Mercury operates
hydro assets are Māori customary land, including the riverbed
beneath the Whakamaru, Maraetai I and II and Waipapa dams
and certain related powerstations. The claim has been amended
to include interests in the water flowing over the riverbed. Mercury
holds the fee simple or beneficial title to those parts of Waikato
riverbed beneath the Whakamaru, Maraetai I and II and Waipapa
dams, and has received advice that if the outcome of the claim
adversely affects the Group’s title to, or ability to access or
operate its hydro assets, Mercury may bring a claim seeking
compensation against the Crown. The claim is currently subject
to a judicial review challenge to the Māori Land Court’s decision
to decline Mercury’s application to strike out parts of the claim.
Mercury’s judicial review was partially successful in the High Court.
The High Court decision has been appealed by the applicants,
the Crown and Mercury. The applicants have also filed a related
claim in the Waitangi Tribunal pursuant to the Treaty of Waitangi
Acy 1975, but have not yet taken any further steps in relation to
that claim.
The Group holds land at Maraetai, Waikato that was subject
to a remedies hearing brought against the Government in
the Waitangi Tribunal. The remedies hearing related to an
application seeking binding recommendations for the
resumption of land at Pouakani, including the Group’s land
at Maraetai. The Crown and Ngāti Kahungunu ki Wairarapa
Tāmaki nui-ā-Rua Settlement Trust signed a settlement
deed addressing the resumption claim, and settlement
legislation has now been enacted to bring this claim to an
end. Wairarapa Moana Incorporation has issued a further
claim against the Crown claiming the Ngāti Kahungunu ki
Wairarapa Tāmaki nui-ā-Rua settlement breaches the
New Zealand Bill of Rights Act 1990. Mercury is not a party
to this claim. Mercury has received advice that if a resumption
claim succeeded, Mercury would have rights of recourse
against the Crown for compensation as if the property had
been taken under the Public Works Act 1981.
A separate claim by the New Zealand Māori Council relating
to fresh water and geothermal resources was lodged in 2012
with the Waitangi Tribunal. The Tribunal concluded that Māori
have residual (but as yet undefined) proprietary rights in fresh
water and geothermal resources and it will be for the
Government to determine how any such rights and interests
may best be addressed. The Tribunal has recently indicated
it intends to hear stage three of that inquiry in 2024, and the
inquiry is currently at the interlocutory (pre-hearing) phase.
The impact of this claim on the Group’s operations,
and consequently the amount of any claim or recourse
the Group may have should that impact be adverse to
the Group’s interests, are unknown at this time.
From time to time the Group will issue letters of credit and
guarantees to various suppliers in the normal course of
business. However, there is no expectation that any outflow
of resource relating to these letters of credit or guarantees
will be required.
The Group has no other material contingent assets or liabilities.
Capital commitments
Capital commitments include purchases of both property, plant and equipment (PP&E) and intangibles. PP&E commitments
include contracts for refurbishment of hydro generation assets at Karāpiro, contracts for construction of an addditonal
geothermal OEC unit at Ngā Tamariki and geothermal drilling campaigns across the Kawerau, Ngā Tamariki and Rotokawa
fields. Intangible commitments are contracts to purchase New Zealand emissions trading scheme (NZ ETS) units.
In the event the NZ ETS is terminated the existing purchase agreements, which cover the four year period from the end
of the reporting period, will also terminate.
Operating commitments
As part of its day-to-day operations, the Group from time to time enters various operating arrangements and commitments
with third parties to support and enhance the Group’s long-term licence to operate, provide access to land, and use of natural
resources. These operating arrangements may be short-, medium-, or long-term in nature.
20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
D. GROUP STRUCTURE
NOTE D1. INVESTMENTS IN AND ADVANCES TO ASSOCIATES AND JOINT ARRANGEMENTS
(JOINT VENTURES AND JOINT OPERATIONS)
The Group financial statements include the following:
NOTE D2. RELATED PARTY TRANSACTIONS
Majority shareholder
The majority shareholder of Mercury NZ Limited is the Government. Transactions cover a variety of services including
energy, postal, travel and tax.
Transactions with related parties
The Group entered into a number of contracts with other Crown-controlled entities to hedge against wholesale electricity
price risk, the most significant being a virtual asset swap with Meridian Energy Limited which has a remaining life of
two years and a contract for difference with Genesis Energy Limited for generation produced at the Waipipi wind farm.
Mercury NZ Limited also has investments in subsidiaries, associates and joint arrangements, all of which are considered
related parties.
As these are consolidated financial statements, transactions between related parties within the Group have been eliminated.
Consequently, only those transactions between entities which have some owners external to the Group have been
reported below:
Interest held
Name of entityPrincipal activityType
Unaudited
31 Dec 2023
Unaudited
31 Dec 2022
Audited
30 Jun 2023Country
TPC Holdings LimitedInvestment holdingAssociate
1
25.00%25.00%25.00%New Zealand
RotokawaSteamfield operationJoint operation64.80%64.80%64.80%New Zealand
Ngā Awa PūruaElectricity generationJoint operation65.00%65.00%65.00%New Zealand
EnergySource LLCInvestment holdingJoint venture
1
20.86%20.86%20.86%United States
EnergySource Minerals LLCMineral extractionJoint venture
1
17.7 3%18.41%18.41%United States
1
Associates and joint ventures are equity accounted.
Associates:Joint ventures:
Unaudited
6 Months
31 Dec 2023
$M
Unaudited
6 Months
31 Dec 2022
$M
Audited
12 Months
30 Jun 2023
$M
Unaudited
6 Months
31 Dec 2023
$M
Unaudited
6 Months
31 Dec 2022
$M
Audited
12 Months
30 Jun 2023
$M
Balance at the beginning of the year 72 67 67 8 6 6
Additional investment during the year - - - - 3 3
Share of earnings (2) (1) 4 - - 2
Share of movement in other
comprehensive income and reserves
(2) 5 11 - - -
Distributions received during the year (2) (3) (6) - (3) (3)
Reclassification to subsidiary - (16) (16) - - -
Fair value revaluation during the year - 11 12 - - -
Balance at the end of the year 66 63 72 8 6 8
Transaction value
Unaudited
6 Months
31 Dec 2023
$M
Unaudited
6 Months
31 Dec 2022
$M
Audited
12 Months
30 Jun 2023
$M
Associates
• Management fees and service agreements received 13 1018
• Energy contract settlements (paid)/received 9 (3) 2
• Service fees (paid)/received- (3) (3)
Joint operations
• Management fees and service fees received and paid 11 10 21
• Energy contract settlements (paid)/received - 1 -
• Interest income - - 1
On 15 December 2022, Mercury NZ Limited acquired the
remaining 52% interest in NOW Broadband ("NOW"). After
this acquisition date, NOW ceased to be an associate of the
Group. The service fees disclosed during the two comparative
reporting periods are related to transactions with NOW during
the period it was an associate of Mercury NZ Limited.
An advance to TPC Holdings Limited of $4m (30 June
2023: $4m, 31 December 2022: $4m) is interest free and is
repayable on demand subject to certain conditions being met.
The long-term advance to our Rotokawa Joint Venture
partner of $3m (30 June 2023: $4m, 31 December
2022: $4m) carries a floating interest rate. Repayments
under the advance are linked to the level of receipts under
the geothermal energy supply agreement. There is no
fixed repayment date; the agreement will terminate on
receipt of any outstanding balances.
No related party debts have been written off, forgiven,
or any impairment charge booked.
21
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
NOTE D2. RELATED PARTY TRANSACTIONS (CONTINUED)
Other transactions with key management personnel
Key management personnel are those people with responsibility and authority for planning, directing and controlling the activities
of the Group. Key management personnel for the Group are considered to be the Directors and Senior Management.
Some Directors also provide directorship services to other third party entities.
A number of key management personnel provide directorship services to subsidiaries and other third party entities as part
of their employment without receiving any additional remuneration. A number of these entities transacted with the Group.
The Group purchases directors and officers insurance for the benefit of key management personnel in relation to the
services they provide to the Group.
Transaction value
Unaudited
6 Months
31 Dec 2023
$000
Unaudited
6 Months
31 Dec 2022
$000
Audited
12 Months
30 Jun 2023
$000
Key management personnel compensation
(paid and payable) comprised:
Directors’ fees 579 577 1,101
Benefits for the Chief Executive and Senior Management:
• Salary and other short-term benefits 4,084 3,673 7,0 4 4
• Termination benefits 312 - -
• Share-based payments 428 416 680
5,403 4,666 8,825
22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
E. RISK
NOTE E1. DERIVATIVE FINANCIAL INSTRUMENTS
The Group uses a range of derivative contracts in order to
manage risk and hedge against cash flow and fair value
volatility. It is the Group’s policy to apply hedge accounting
to reduce volatility in profit or loss, and where possible,
derivatives are designated into hedging relationships under
NZ IFRS 9 as either cash flow or fair value hedges.
Interest rate and cross currency interest rate derivatives
Interest rate swaps and cross currency derivatives are used
to manage interest rate risks. Interest rate swaps where we
pay-fixed, and receive-floating interest rates are designated
as cash flow hedges in a relationship with a portion of
floating rate debt exposure. Interest rate swaps where we
receive-fixed, pay-floating interest rate are designated as fair
value hedges in a relationship with the swap rate on fixed
rate bonds. Cross currency swaps are designated as both
fair value and cash flow hedge relationships with the USPP
and Australian denominated Green wholesale bond (refer
note C2) depending on the component of the debt being
hedged: the risk free (swap) rate as a fair value hedge; and
the credit margin as cash flow hedge.
Unaudited
6 Months
31 Dec 2023
$M
Restated
Unaudited
6 Months
31 Dec 2022
$M
Restated
Audited
12 Months
30 Jun 2023
$M
CURRENT ASSETS
Electricity price derivative 256 290 190
Interest rate derivative 7 24 11
Cross currency interest rate derivative - - -
Foreign exchange derivative - - -
263 314 201
CURRENT LIABILITIES
Electricity price derivative 210 275 133
Interest rate derivative 38 38 44
Cross currency interest rate derivative 8 8 9
Foreign exchange derivative 8 2 -
264 323 186
NON-CURRENT ASSETS
Electricity price derivative 170 439 224
Interest rate derivative 7 9 6
Cross currency interest rate derivative 12 10 13
189 458 243
NON-CURRENT LIABILITIES
Electricity price derivative 161 360 160
Interest rate derivative 61 105 73
Cross currency interest rate derivative 8 15 10
230 480 243
Unaudited
6 Months
31 Dec 2023
$M
Restated
Unaudited
6 Months
31 Dec 2022
$M
Restated
Audited
12 Months
30 Jun 2023
$M
Change in fair value of financial instruments
Realised gain/(loss) on unhedged electricity swaps45 - 6
Unrealised gain/(loss) on unhedged derivatives and hedge
ineffectiveness through income statement
20 68 (165)
Change in fair value of derivative financial instruments per P&L65 68 (159)
Foreign exchange derivatives
Foreign exchange forward contracts are designated as cash
flow hedges in a relationship with forecast purchases of
inventory and capital equipment, mainly for maintenance
and construction of generation assets.
Electricity contracts
Where possible, electricity price derivatives are designated
as cash flow hedges in a relationship with forecast electricity
sales and purchases. Exceptions are swaps and options
used for trading (electricity futures, options and financial
transmission rights) as well as other contracts that have
been deemed not eligible for hedge accounting due to
price reset mechanisms or variable volume structures
(e.g. wind and solar power purchase agreements).
The fair values of derivative financial instruments are
summarised below:
23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
AREA OF KEY JUDGEMENT
FAIR VALUE ESTIMATION
Valuation techniques
All fair value balances are assigned to a fair value hierarchy level as defined by NZ IFRS 13
Fair Value Measurement.
No transfers occurred between hierarchy levels in the period ended 31 December 2023.
The following table provides a breakdown of the fair value of derivatives by the source of key valuation inputs:
31 December 2023
Quoted
market price
Market
observable inputs
Non-market
observable inputsTot al
Valuation techniqueLevel 1Level 2Level 3
Financial assets$M$M$M$M
Derivative instruments
• Electricity price derivatives 26 - 400 426
• Interest rate derivatives - 14 - 14
• Cross currency interest rate derivatives - 12 - 12
26 26 400 452
Financial liabilities
Derivative instruments
• Electricity price derivatives 51 - 320 371
• Interest rate derivatives - 99 - 99
• Cross currency interest rate derivatives - 16 - 16
• Foreign exchange rate derivatives - 8 - 8
51 123 320 494
Net financial asset/(liability) (25) (97) 80 (42)
Restated 30 June 2023
Quoted
market price
Market
observable inputs
Non-market
observable inputsTot al
Valuation techniqueLevel 1Level 2Level 3
Financial assets$M$M$M$M
Derivative instruments
• Electricity price derivatives 33 - 381 414
• Interest rate derivatives - 17 - 17
• Cross currency interest rate derivatives - 13 - 13
33 30 381 444
Financial liabilities
Derivative instruments
• Electricity price derivatives 45 - 248 293
• Interest rate derivatives - 117 - 117
• Cross currency interest rate derivatives - 19 - 19
45 136 248 429
Net financial asset/(liability) (12) (106) 133 15
Restated 31 December 2022
Quoted
market price
Market
observable inputs
Non-market
observable inputsTot al
Valuation techniqueLevel 1Level 2Level 3
Financial assets$M$M$M$M
Derivative instruments
• Electricity price derivatives 14 - 715 729
• Interest rate derivatives - 33 - 33
• Cross currency interest rate derivatives - 10 - 10
14 43 715 772
Financial liabilities
Derivative instruments
• Electricity price derivatives 59 - 576 635
• Interest rate derivatives - 143 - 143
• Cross currency interest rate derivatives - 23 - 23
• Foreign exchange rate derivatives - 2 - 2
59 168 576 803
Net financial asset/(liability) (45) (125) 139 (31)
NOTE E1. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
Valuation of level 1 financial instruments
Level 1 financial derivatives includes ASX futures and financial transmission rights with fair values determined using quoted
prices. These prices represent regularly occurring market transactions on an orderly basis.
Valuation of level 2 financial instruments
The fair values of Level 2 derivatives are determined using discounted cash flow models. Listed below are the Level 2
derivatives and the key inputs to the valuation model.
Valuation of level 3 financial instruments
The Group uses various methods in estimating the fair value of a financial instrument. Where the fair value of a derivative
is calculated as the present value of the estimated future cash flows of the instrument there are two key inputs being used:
The wide range in discount factors are driven by entering into longer term derivative contracts. Forward electricity spot
prices in the front end of the curve in HY23 were higher, driven by futures price, thus resulting in a higher maximum
price of $214/MWh in HY23 compared to $188/MWh in HY24.
The selection of valuation inputs requires significant judgement, and therefore there is a range of reasonably possible
assumptions in respect of these inputs that could be used in estimating the fair values of these derivatives. Maximum
use is made of observable market data when selecting inputs and developing assumptions for the valuation technique.
DerivativeValuation Input
Cross Currency Interest Rate Swaps (CCIRS)
Forward interest rate price curve and foreign
exchange rate curve
Interest Rate SwapsForward interest rate curve
Foreign Exchange ContractForward foreign exchange rate curves
Unaudited
6 Months
31 Dec 2023
Unaudited
6 Months
31 Dec 2022
Audited
12 Months
30 Jun 2023
Price path$85/MWh to $188/MWh$76/MWh to $214/MWh$73/MWh to $153/MWh
Discount factor10.3% to 3.5%16.7% to 4.5%12.0% to 4.0%
Reconciliation of level 3 unrealised fair value movements
The unrealised Level 3 fair value movements in the Group’s Consolidated Income Statement are recognised within ‘change in
the fair value of financial instruments’, along with realised gains/losses on financial instruments not in a hedging relationship.
Sensitivity of level 3 fair value measurements
The Group uses unobservable inputs to measure the fair value of Level 3 electricity derivatives. These inputs are most sensitive
to changes in electricity forward prices. These electricity price derivatives are in a net asset position on the balance sheet.
The Group has a net exposure that if there was an increase in the forward price would likely result in an increase in fair value
of the Consolidated Balance Sheet, and a decrease in the forward price would likely result in a decrease in fair value.
Fair value through other
comprehensive income
Fair value through
profit or loss
Unaudited
6 Months
31 Dec 2023
$M
Unaudited
6 Months
31 Dec 2022
$M
Audited
12 Months
30 Jun 2023
$M
Unaudited
6 Months
31 Dec 2023
$M
Unaudited
6 Months
31 Dec 2022
$M
Audited
12 Months
30 Jun 2023
$M
Opening balance sheet position (78) (257) (257) 211 358 358
Acquired contracts - - - - - -
New contracts (4) (9) 23 - (1) 10
Matured contracts (6) 18 66 (6) 4 17
Gains and losses - - - - - -
Through the income statement - - - 38 81 (175)
Through other comprehensive income (76) (55) 90 - - -
Closing balance sheet position (164) (303) (78) 24 4 442 211
NOTE E1. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
For the six months ended 31 December 2023
F. OTHER
NOTE F1. SUBSEQUENT EVENTS AND OTHER MATTERS
The Board of Directors has approved a fully imputed interim dividend of 9.3 cents per share to be paid on 2 April 2024.
The Group plans to continue with the DRP announced in FY2022, with a DRP strike price to be determined by the
average of daily volume weighted average sale price for a share, calculated on all price setting trades of shares that
took place through the NZX Main Board over a period of five trading days starting on 18 March 2024, less a 2% discount.
There are no other material events subsequent to balance date that would affect the fair presentation of these
financial statements.
Deferred ‘inception’ gains/(losses) on level 3 derivatives
There is a presumption that when derivative contracts are entered into at an arm’s length basis that the fair value at inception
is zero. The contract price of non exchange traded electricity derivative contracts are agreed on a bilateral basis, the pricing for
which may differ from the prevailing derived market price curve for a variety of reasons. In these circumstances an inception
adjustment is made to bring the initial fair value of the contract to zero at inception. This inception adjustment is amortised
over the life of the contract by adjusting the future price path used to determine the fair value of the derivatives by a constant
amount to return the initial fair value to zero.
The table below details the movements in inception value gains/(losses) included in the fair value of derivative financial assets
and liabilities as at 31 December 2023:
Unaudited
6 Months
31 Dec 2023
$M
Unaudited
6 Months
31 Dec 2022
$M
Audited
12 Months
30 Jun 2023
$M
Electricity price derivatives
Opening deferred inception gains/(losses) 39 26 26
Deferred inception gains/(losses) on new hedges 12 21 17
Deferred inception(losses)/gains realised during the year (5) - (4)
Closing inception gains/(losses) 46 47 39
NOTE E1. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
26
Shareholder enquiries
You can view your investment portfolio, change your address,
supply your email, update your details or payment instructions
online: www.investorcentre.com/nz. You will need your CSN
and FIN to access this service.
Enquiries may be addressed to the Share Registrar
(see Directory for contact details).
Investor information
Our website at mercury.co.nz is an excellent source of
information about what’s happening within the company.
Our Investor Centre allows you to view all regular investor
communications, information on our latest operating
and financial results, dividend payments, news and share
price history.
Electronic shareholder communication
It is quick and easy to make the change to receiving your
reports electronically. This can be done either:
• Online at www.investorcentre.com/nz by using your CSN
and FIN (when you log in for the first time). Select ‘My Profile’
and ‘Communication Preferences’ to update your details, or;
• By contacting Computershare Investor Services Limited
(see Directory for contact details).
Board of Directors
Scott St John, Chair
Mark Binns
Hannah Hamling
Adrian Littlewood
James Miller
Susan Peterson
Mike Taitoko
Lorraine Witten
Executive Management Team
Vince Hawksworth, Chief Executive
Lucie Drummond, Executive GM Sustainability
Phil Gibson, Executive GM Portfolio
Stewart Hamilton, Executive GM Generation
William Meek, Chief Financial Officer
Craig Neustroski, Executive GM Customer
Fiona Smith, Executive GM People
Experience & Technology
Company Secretary
Howard Thomas,
General Counsel and Company Secretary
Investor Relations
& Sustainability Enquiries
Paul Ruediger,
Head of Business Performance &
Investor Relations
Phone: +64 27 517 3470
Email: investor@mercury.co.nz
Registered Office in New Zealand
Mercury NZ Limited
33 Broadway, Newmarket, Auckland 1023
P O Box 90399
Auckland 1142
New Zealand
Registered Office in Australia
c/– TMF Corporate Services
(Australia) Pty Limited
Suite 1, Level 11, 66 Goulburn Street,
Sydney, NSW 2000
Phone: +61 2 8988 5800
Legal Advisors
Chapman Tripp
Level 34
PwC Tower at Commercial Bay
15 Customs Street West
Auckland 1010
PO Box 2206, Auckland 1140
Phone: +64 9 357 9000
Bankers
ANZ Bank
ASB Bank
Bank of China
Bank of New Zealand
China Construction Bank
Commonwealth Bank of Australia
Industrial and Commercial Bank of China
MUFG Bank
Mizuho Bank
Westpac
Credit Rating (re-affirmed December 2023)
Long-term: BBB+
Outlook: Stable
Share Registrar – New Zealand
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road, Takapuna,
Auckland 0622
Private Bag 92119
Victoria Street West
Auckland 1142, New Zealand
Phone: +64 9 488 8777
Email: enquiry@computershare.co.nz
Web: www.investorcentre.com/nz
Share Registrar – Australia
Computershare Investor Services Pty Limited
Yarra Falls, 452 Johnston Street, Abbotsford,
VIC 3067, GPO Box 3329, Melbourne,
VIC 3001, Australia
Phone: 1 800 501 366 (within Australia)
Phone: +61 3 9415 4083 (outside Australia)
Email: enquiry@computershare.co.nz
INFORMATION FOR
SHAREHOLDERS.
DIRECTORY.
Waitako River Trail
---
Distribution Notice
Section 1: Issuer information
Name of issuer Mercury NZ Limited
Financial product name/description Mercury NZ Limited ordinary shares
NZX ticker code MCY
ISIN (If unknown, check on NZX
website)
NZMRPE0001S2
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year Quarterly
Half Year X Special
DRP applies X
Record date 14/03/2024
Ex-Date (one business day before
the Record Date)
13/03/2024
Payment date (and allotment date
for DRP)
02/04/2024
Total monies associated with the
distribution
$129,384,133
Source of distribution (for example,
retained earnings)
Income available for distribution
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution $0.12916667
Gross taxable amount $0.12916667
Total cash distribution $0.09300000
Excluded amount (applicable to
listed PIEs)
N/A
Supplementary distribution amount $0.01641176
Section 3: Imputation credits and Resident Withholding Tax
Is the distribution imputed Fully imputed
If fully or partially imputed, please
state imputation rate as % applied
28%
Imputation tax credits per financial
product
$0.03616667
Resident Withholding Tax per
financial product
$0.00645833
Section 4: Distribution re-investment plan
DRP % discount (if any)
2.0%
Start date and end date for
determining market price for DRP
18/03/2024 22/03/2024
Date strike price to be announced
(if not available at this time)
25/03/2024
Specify source of financial products
to be issued under DRP
programme (new issue or to be
bought on market)
Treasury stock
DRP strike price per financial
product
TBC
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
15/03/2024
Section 5: Authority for this announcement
Name of person
authorised to make
this announcement
Howard Thomas, Company Secretary
Contact person for this
announcement
Howard Thomas, Company Secretary
Contact phone number +64 9 308 8200
Contact email address Howard.Thomas@Mercury.co.nz
Date of release through MAP
20/02/2024
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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