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Highlights
- Q3 inflows dropped to a record low
- Generation fell, but higher prices boosted revenue
- Customer base expanded 5.8% year-over-year
Meridian Energy (ASX:MEZ) has released its operating update for March 2025, revealing a mixed performance as it continues to navigate one of its driest quarters on record. While generation volumes dipped, stronger wholesale electricity prices and a growing customer base offered a degree of balance to the overall operational outlook.
Record Low Inflows and Impact on Generation
The company faced significant challenges during the third quarter, with water inflows dropping to just 48% of the historical average—down a sharp 50% from the same period last year. This marks a record low for a third quarter. As a result, total generation for the quarter declined by 4.9%. Despite this dip, revenue resilience came from a notable 19.6% increase in average electricity prices received.
On a year-to-date basis, Meridian’s overall generation is down by 5.1%. However, there was a bright spot in wind generation, which continued to perform strongly even as hydro generation remained under pressure due to limited inflows.
Storage Levels and Regional Disparities
Hydro storage conditions remain tight but showed slight improvement. As of March 2025, national hydro storage increased slightly to 77% of the historical average. Regional variances were notable: South Island’s storage rose to 76%, while North Island's declined to 84%. Within specific catchments, the Waitaki catchment recorded 71% of the historical average, and Waiau catchment levels were significantly lower at 56%.
These low inflow and storage figures have added pressure to the generation mix, reinforcing the importance of pricing power and diversified generation sources such as wind.
Sales Trends and Customer Growth
Retail electricity sales in March 2025 were 3.1% lower compared to the same month last year. Despite this, Meridian Energy saw a 5.8% year-over-year increase in its customer base, reflecting continued interest in its offerings. Segment-wise, sales showed growth across most areas, although agricultural sales dropped steeply by 40.8%, hinting at possible demand-side shifts within that sector.
Pricing movements remained robust. The average price received for generation in March 2025 jumped 47.3% compared to the previous year. Meanwhile, the average price paid to supply customers also saw a significant increase of 45.6%, suggesting tighter margins but steady revenue streams.
In a quarter marked by historically low inflows and evolving demand patterns, Meridian Energy (MEZ) showcased operational resilience through strategic pricing and a growing customer portfolio.
