MCY - Mercury NZ

[System]

Mighty River Power Limited (MYT) is one of New Zealand’s largest electricity companies – with its core business based on reliable, low fuel-cost electricity generation complemented by sales to homes and businesses.

http://www.mightyriver.co.nz

 

[Knobby22]

Re: MYT - Mighty River Power

Looks interesting.
Former NZ state owned enterprise. 4.8% dividend expected first year. Does geothermal.

 

[Smurf1976]

Re: MYT - Mighty River Power

It's an NZ electricity company with a substantial hydro-electric scheme (a very typical multiple dammed catchment arrangement although the headwater storage is somewhat limited), several geothermal plants and a gas-fired plant as well.

I haven't bought, but I'm interested. I like businesses that I understand, and for me at least this is about as good as it gets in terms of understanding the business.

Generation output is 61% hydro, 31% geothermal and 8% gas.

Geothermal capacity is 387MW and all fairly new - year 2000 or later.

Hydro capacity is 1048 MW from 9 plants. They are fairly old, age ranges from 1929 to 1970, but that shouldn't be a problem with a hydro plant as long as it's been properly maintained.

Gas-fired capacity is 175 MW from a single plant. About 70% of that capacity operates in combined cycle mode (reasonably fuel efficient) and the rest is from a single open cycle gas turbine (relatively fuel inefficient). I wouldn't expect this plant to be too great in an economic sense due to small scale and age, but location in Auckland gives it an additional role as voltage support for the local area. That plus the reality that MRP doesn't really want to run it as a baseload plant anyway - it's largely for mitigating rainfall risk into the hydro catchment, means that it ought to be good enough (economically and technically) for the purpose.

Might have to have a further look at this one from a financial perspective....

 

[ROE]

Re: MYT - Mighty River Power

you may need to watch out the NZ government has bill out currently they can regulate price on power
so you not free to charge what you like...

I dont like that sort of business...it's not free market enterprise you at the mercy of the current ministers...
not saying you cant make money out of it but I prefer my business to charge what the hell ever they want and let competition dictate price rather than some bureaucrats making the call

 

[Knobby22]

Re: MYT - Mighty River Power

My experience in Victoria suggests that they will cut back on maintenance, capture the regulator and make some real money. Then something big will go wrong.

The problem is that did happen already in New Zealand from memory. Auckland lost power for a week! So maybe everyone will be on the ball a bit more.

PS actually 5 weeks in 1988..
http://en.wikipedia.org/wiki/1998_Auckland_power_crisis

One of my work colleagues used to work for that company and said his job was to maintain the power line that failed. When it failed (due to lack of maintenance) there was no one left in the country who could fix it and they had to send out a special team from Australia. Engineers should run this sort of company, not accountants.

 

[oldblue]

Re: MYT - Mighty River Power

Just to put the 1998 Auckland power outage into perspective:

- It was a "lines" problem, the responsibility of the local company which at the time was owned by the Auckland council. Certainly, lack of maintenance was to blame but this should be sheeted home to previous as well as (then) current local administrations.

- Power distribution is now the business of "lines" companies in NZ which, with a few minor exceptions, are debarred from power generation and/or retailing.

- Mighty River Power is a so called "gentailer", generating and retailing electricity and/or gas. Following the float, it is still owned 51% by the NZ govt which proclaims its intention to retain that control. Indeed, it would be politically "difficult" to renege on that promise.

- In my view, the biggest threat to the company as an investment is the possibility of over-regulation and/or re-nationalisation should the Labour/Greens Opposition win power at next year's general election.

 

[Knobby22]

Re: MYT - Mighty River Power

Thanks Oldblue.

 

[chiff]

Re: MYT - Mighty River Power

Just noticed these on ASX today...somehow reminds me a little of Pacific hydro -all they need is a few wind turbines to make them even more so.Have NZ got a renewable energy target?
No franking credits with this one? I hold Erm power which also has some similarities, with their gas fired stations.

 

[oldblue]

Re: MYT - Mighty River Power

I don't know about a target but 69% of NZ's electricity comes from renewable sources - hydro, geothermal and wind.

MYT's own number is 90%, mainly from Hydro but with a bit of geothermal.

 

[notting]

Re: MYT - Mighty River Power

Someones keen ~ looking forward to 28 Aug 2015 financial results.

 

[System]

Re: MCY - Mighty River Power

On July 29th, 2016, Mighty River Power Limited changed its ASX code from MYT to MCY.

 

[System]

On August 2nd, 2016, Mighty River Power Limited changed its name to Mercury NZ Limited.

 

[divs4ever]

FY2023 EBITDAF guidance confirmed
26 January 2023 – Mercury announced today that it has confirmed its FY2023 EBITDAF guidance of $620m or normalised
EBITDAF of $795m after adjusting for the non-cash unwind of acquired swaps relating to the Norske Skog, Tilt and Trustpower
transactions.
Very wet conditions across the Waikato catchment have lifted FY2023 hydro production forecasts to 4,700GWh (from
4,500GWh). This additional hydro production has mostly been generated during Q2 when spot electricity prices were low due to
nationally wet conditions and the Lake Taupō level was actively managed within the consented operating limits. The integration
of the Mercury and Trustpower retail businesses is ahead of schedule, but this is pulling forward integration costs from future
years into FY2023.
In December 2022, Mercury acquired the remaining shares of NOW New Zealand Limited. Mercury made an initial investment
for 48% of NOW back in March 2021. NOW provides telecommunications and broadband services to 24,000 residential and
small commercial customers throughout New Zealand.
Guidance may change and remains subject to any material events, significant one-off expenses or other unforeseen
circumstances including changes to hydrological conditions.


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( DYOR )

i hold MCY

hmmm ! diversifying into a telco provider

will have to think on this ( if a reason to add more )

 

[divs4ever]

Amazon deal supports Mercury’s renewables pipeline
4 April 2023 – Mercury has agreed a long-term Corporate Power Purchase Agreement with Amazon for
renewable energy for their Auckland data centres, planned for launch in 2024.
• Amazon will purchase around half the real time output of Turitea South (the southern section of Mercury’s Turitea wind
farm) for an agreed price. Turitea South is 103 megawatt (MW) and expected to produce 370 gigawatt hours (GWh) per
annum. The financial terms of the deal are confidential.
• The renewable energy from Turitea South will be used to support Amazon Web Services’s (AWS) data centres in Auckland,
when they launch in 2024.
• While Mercury has a strong pipeline of renewable development, having a guaranteed consumer buying a significant amount
of Turitea South’s generation means that Mercury NZ remains well positioned to continue developing renewable projects at
pace.
“In addition to shifting the dial on decarbonisation at home with the development of the Turitea wind farm, this agreement means
we’re also supporting a major global company with their decarbonisation goals,” said Vince Hawksworth, Chief Executive
Mercury NZ.
“We’re committed to delivering on our strong pipeline of new renewable generation and arrangements like this will help us get
there faster. It’s great to welcome AWS’s data centres to New Zealand and we’re happy to be powering their Kiwi operations in
a way that supports renewable generation.”
“I’m excited to share Amazon’s first renewable energy project in New Zealand with Mercury NZ, which will enable us to operate
our AWS Auckland Region using renewable energy when it launches in 2024, supporting the development of additional
renewable energy available for Kiwis,” said Tiffany Bloomquist, country manager for commercial operations at AWS in New
Zealand.
A PPA (power purchase agreement) is an electricity supply agreement, where a price is agreed for a period of supply. For the
generator and the customer, the agreed price avoids the volatility risk of buying and selling on the Wholesale energy market,
where the price moves around depending on current and forecast supply and demand.
ENDS


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DYOR

i hold MCY