Meridian Earnings: Solid Growth Despite Dry Conditions; All Eyes on the Smelter

Narrow-moat-rated Meridian Energy had a solid first half fiscal 2024, with EBITDA up 4% to NZD 443 million. The result was better than it appears, given dry weather reduced hydroelectric output and there were positive one-offs in the previous corresponding period. The key earnings tailwind of rising retail electricity prices remains in force. We downgrade our full-year EBITDA forecast by a modest 3% to NZD 826 million to factor in lower hydroelectric generation, but longer-term forecasts are largely unchanged.