Meridian Energy Posts $130m Profit Rebound and Advances Renewable Projects

Financial Turnaround and Dividend Boost

Meridian Energy has shaken off the pain of FY25’s $452 million loss to post a $130 million net profit after tax for FY26, powered by a 72% surge in EBITDAF to $1.051 billion and a 155% jump in operating cash flows to $810 million. The turnaround reflects a return to more normal hydrological conditions, with record-high inflows across the Waitaki and Waiau catchments boosting hydro generation, alongside a 5% increase in wind output.

The Board rewarded shareholders with a 7.1% lift in total ordinary dividends to 22.5 cents per share, declaring a final dividend of 16.10 cents. The Dividend Reinvestment Plan remains open at a 0% discount, signalling confidence in the company’s cash generation and growth prospects.

Renewable Projects Accelerate

Meridian’s renewable development pipeline is firing on all cylinders. The 130MW Ruakākā Solar Farm and 200MW Stage 1 of the Te Rahui Solar Farm joint venture are under construction, with full power expected by mid-2027. Consent was secured for the 90MW Mount Munro Wind Farm and 120MW Bunnythorpe Solar Farm, while the Waiinu Energy Park was accepted into the government’s Fast-track consenting process.

Final investment decisions are anticipated soon for Mount Munro, Te Rere Hau Wind Farm, and either Stage 2 of Te Rahui or the integrated solar and battery project near Palmerston North. These projects will add significant capacity to Meridian’s portfolio, which now totals 6,600MW of installed and planned renewable assets, capable of generating over 15TWh annually.

Access to an additional five metres of contingent storage at Lake Pūkaki was granted for three years, enhancing dry-year resilience and system security. The company also secured a 35-year reconsent for its flagship Waitaki Power Scheme, underpinning a strategic hydro asset that supplies nearly 30% of New Zealand’s hydro capacity.

Retail Growth Amid Platform Transition

Meridian’s retail business continues to expand, now serving around 455,000 customer connections across Meridian and Powershop brands, a 12% increase year-on-year. Sales volumes rose 14%, supported by the acquisition of Flick Energy’s customer book and hedges.

The migration to Meridian’s new Kraken retail platform reached 175,820 customers by year-end, about 39% of the retail base. While the transition has delivered important strategic capability, it faced customer pushback, particularly from digitally savvy Powershop users reacting to app changes. The company is focused on improving customer support and developing new products to enhance affordability and experience.

Innovative demand-side products gained traction, with over 30,900 customers on the Smart Hot Water plan, saving approximately $120 annually by shifting hot water use away from peak periods. The Energy Wellbeing Programme has supported over 4,000 households facing energy hardship, with plans to extend assistance to 10,000 customers by 2030.

EV Charging and Digital Optimisation

Meridian’s EV charging network grew to 519 public charge points nationwide, the second largest in New Zealand, with partnerships secured to accelerate deployment in the central and upper North Island. The company aims to reach 1,000 public charge points by 2030, supporting the electrification of transport and customer energy transition.

On the operational front, the DigiGEN programme is leveraging data, digital tools and AI to optimise maintenance and asset performance. Early results include $5 million in annualised revenue and cost-saving opportunities, improved outage scheduling, and centralised procurement efficiencies. These initiatives aim to enhance generation availability and reduce operating costs over the long term.

Sustainability Recognition and Climate Leadership

Meridian was named to the S&P Dow Jones Best-in-Class World Index, the only New Zealand company and one of just ten global electric utilities to achieve this distinction. This recognition reflects Meridian’s disciplined approach to sustainability, integrating strong environmental, social and governance (ESG) practices with commercial performance.

The company’s FY26 Climate-related Disclosures detail robust governance, risk management and transition planning aligned with the Aotearoa New Zealand Climate Standards. Meridian has set ambitious science-based targets aiming for a 50% reduction in Scope 1 and 2 emissions by 2030 and net zero by 2050, supported by a comprehensive emissions reduction plan and supply chain engagement.

What to Watch Next

Investors will be closely watching Meridian’s upcoming final investment decisions for key renewable projects and the pace of retail platform migration and customer retention. The company’s ability to manage energy affordability amid ongoing network cost increases and evolving regulatory settings will also be critical. Meanwhile, the expansion of flexible generation and storage assets, alongside demand-side innovations, will shape Meridian’s role in New Zealand’s energy transition.

With wholesale electricity futures prices easing and new renewable generation beginning to close supply gaps left by declining domestic gas, the coming years will test whether these investments translate into sustained affordability and system resilience. Meridian’s strategic balance between growth, operational excellence and community support will be pivotal in navigating this complex landscape.