Why is Mercury NZ (NZX: MCY) in news today?

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 Why is Mercury NZ (NZX: MCY) in news today?
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  • Mercury NZ revised its FY23 guidance today (21 October).
  • MCY now expects EBITDA to increase by NZ$40 million to NZ$620 million

New Zealand-based renewable energy company Mercury NZ Limited (NZX: MCY) announced today (21 October 2022) that it had revised its FY2023 EBITDA guidance to NZ$620 million, up by NZ$40 million.

The company’s normalised EBITDA guidance also increased by NZ$40 million to NZ$795 million after adjusting for non-cash swaps. As per the company, the upgraded guidance is mainly due to higher hydro generation in FY23, forecast to be around 4,500 GWh, up from the previously forecast of 4,350 GWh.

MCY, however, cautioned that the guidance could change due to material events and other unforeseen circumstances like changes in hydrological conditions.

Key FY22 financials

  • In FY22, Mercury reported an EBITDA of NZ$581 million, up by NZ$118 million from prior year’s NZ$463 million.
  • Its operations expenditure was NZ$230 million, up by NZ$40 million over the prior year, mainly on account of an increase in operational activity resulting from acquisitions.
  • Net profit after tax (NPAT) was NZ$469 million, up NZ$328 million over previous year. 
  • The company also stated that it had a diversified portfolio of electricity generation with wind energy as the latest addition to its hydro and geothermal operations. This follows the acquisition of Tilt’s New Zealand wind operations and part commissioning of the Turitea wind farm.

Decarbonisation efforts in NZ

Mercury, while announcing its results, also said that the electricity sector in New Zealand was committed to investing in renewable energy, supporting NZ’s transition to a low-carbon future. The NZ government’s Emissions Reduction Plan has also set a clear target for the electricity sector to achieve the goal of decarbonising the economy.

Mercury’s new wind energy project

On 13 September 2022, Mercury confirmed that it was taking another step towards decarbonisation by building a new wind farm at Kaiwera Downs. The new wind farm is targeted to have a capacity of 43 MW and is likely to cost the company NZ$115 million. The company’s total commitment to wind energy stands at NZ$600 million. Sometime back, the company also reported that it was close to the completion of the NZ$480 million Turitea Wind Farm in Manawatu.

As per the company, Kaiwera Downs Wind Farm will have the capacity to power 20,000 homes or 66,000 electric vehicles (EVs). Mercury’s total energy generated through wind power stands at 1,269 GWh.

Stock price

On 21 October 2022, the stock was trading marginally up 0.47% at NZ$ 5.295, at the time of writing this article. 





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