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Mercury NZ Ltd MCY

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Stock XNZE Rating as of
NZD 6.30 +0.16 (2.61%)
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As of Delayed Price Closed

Company Report

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Mercury NZ Earnings: Dry Weather Caps Profit Growth Despite Higher Electricity Prices

Adrian Atkins

Narrow-moat-rated Mercury NZ posted modest earnings growth in fiscal 2024. EBITDA rose 4% to NZD 877 million as lower hydroelectric generation volumes and higher operating costs largely offset higher customer prices. Guidance for fiscal 2025 EBITDA of NZD 820 million disappoints, a 6% fall on 2024 with dry weather hampering hydroelectric output and high gas supply costs. We downgrade our forecast by 10% to align with guidance. However, these factors should prove temporary as weather normalizes and the importance of gas-fired power stations diminishes as new renewables come online.

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Price vs Fair Value

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MCY is trading at a 795% premium.
Price
NZD 6.30
Fair Value
NZD 7.40
Uncertainty
Medium
1-Star Price
NZD 4.21
5-Star Price
NZD 5.86
Economic Moat
Msrlfnl
Capital Allocation
Dkyncqdv

Bulls Say, Bears Say

Bulls

Mercury is a low-cost provider of electricity attributed to its significant renewable assets.

Bears

A competitive retail environment weighs on pricing in the near term.

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News

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Trading Information

Previous Close Price
NZD 6.14
Day Range
NZD 6.12–6.35
52-Week Range
NZD 5.67–7.25
Bid/Ask
NZD 6.08 / NZD 6.34
Market Cap
NZD 8.78 Bil
Volume/Avg
849,875 / 659,277

Key Statistics

Price/Earnings (Normalized)
31.01
Price/Sales
2.55
Dividend Yield (Trailing)
3.70%
Dividend Yield (Forward)
3.70%
Total Yield
3.70%

Company Profile

Mercury NZ (formerly Mighty River Power) generates more than 15% of New Zealand's electricity and is one of the four major electricity generators and suppliers in the country. All electricity is generated from renewable sources, which makes it one of the lowest-cost providers of electricity. The company operates nine hydro stations and five geothermal power plants in the North Island and some wind farms. Mercury sells electricity to residential and commercial customers and has the largest share of the key Auckland market.
Sector
Utilities
Industry
Utilities - Renewable
Stock Style Box
Mid Growth
Total Number of Employees
1,335
Website
https://www.mercury.co.nz

Competitors

Valuation

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Metric
MCY
MEL
GNE
Price/Earnings (Normalized)
 31.0143.8436.77
Price/Book Value
 1.821.880.86
Price/Sales
 2.553.200.75
Price/Cash Flow
 14.3223.206.30
Price/Earnings
MCY
MEL
GNE

Financial Strength

Metric
MCY
MEL
GNE
Quick Ratio
 0.500.750.71
Current Ratio
 0.891.051.18
Interest Coverage
 2.808.362.27
Quick Ratio
MCY
MEL
GNE

Profitability

Metric
MCY
MEL
GNE
Return on Assets (Normalized)
 1.71%3.19%2.43%
Return on Equity (Normalized)
 3.39%5.35%5.11%
Return on Invested Capital (Normalized)
 2.36%4.30%3.28%
Return on Assets
MCY
MEL
GNE

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