MEL - Meridian Energy

[alokdhir]

As per the latest reports it seems MEL ratio will drop from 4.5% to around 0.9 % in clean energy index ...thats massive reduction and they need to realign in next 15 days ....

It seems after upside selling opportunity provided by them in early Jan now they will be providing downside buying opportunity

Wont be surprised it going below morningstar valuations of $ 3.90 ....

[Sideshow Bob]

As per the latest reports it seems MEL ratio will drop from 4.5% to around 0.9 % in clean energy index ...thats massive reduction and they need to realign in next 15 days ....

It seems after upside selling opportunity provided by them in early Jan now they will be providing downside buying opportunity

Wont be surprised it going below morningstar valuations of $ 3.90 ....

Also goes ex-div on Tuesday 30/3.

Have they not already off-loaded alot of their shares??

[Balance]

Also goes ex-div on Tuesday 30/3.

Have they not already off-loaded alot of their shares??

Suspect a long way to go - on my simplistic volume sp chart, there were over 80m shares traded during the clean energy index run! :eek2:

[alokdhir]

On standalone investment basis ...at what levels MEL becomes a compelling buy ? Thoughts please

[Balance]

On standalone investment basis ...at what levels MEL becomes a compelling buy ? Thoughts please

Start the ball rolling with your buy in price thoughts?

[alokdhir]

Start the ball rolling with your buy in price thoughts?

For me anything close to $ 4 seems good price to get in ...

I think we can get that opportunity in next few days so we should keep our cash and buying price ready :D

[Balance]

For me anything close to $ 4 seems good price to get in ...

I think we can get that opportunity in next few days so we should keep our cash and buying price ready :D

I suspect the sp will get there given the sheer number of MEL shares which have to be sold.

There’s also the increase in long term bond rates which diminishes the appeal of utility stocks.

[alokdhir]

I suspect the sp will get there given the sheer number of MEL shares which have to be sold.

There’s also the increase in long term bond rates which diminishes the appeal of utility stocks.

Still I think $ 4 for MEL will be fruitful to buy . Also with new property investor tax rules change the pressure on interest rates is gone for quite some time .

MEL wont be bad buy for $ 4 IMHO

[Sideshow Bob]

Still I think $ 4 for MEL will be fruitful to buy . Also with new property investor tax rules change the pressure on interest rates is gone for quite some time .

MEL wont be bad buy for $ 4 IMHO

$4 would give a gross yield of circa 6.2% - at current divvy levels....

[hogie]

Already had my buy in for a while set at $3.90

[Maxtrade]

Start the ball rolling with your buy in price thoughts?

Due to the share volume and limited period of time allocated for the rebalance, we suspect the SP will be driven down steadily over the next 10 days with block sells. Likely to see SP find solid support level at 3.75-3.85. With a sharp rebound up to $4. So if able to time a buy around $3.75-$3.80 will likely be where most large traders are looking to jump in.

[peat]

RSI is diverging and have we already had a higher low????

Lows

26/3 = 5.10
8/3 = 5.06

It hit 6 in between...

But volatility is high. I personally think from the charts that any spike down will be short lived

[Maxtrade]

April 2nd, Shares Global clean energy ETF rebalance sell off commences, needs to be completed by April 16th

[ados_nz]

Do you expect this to be an on market sell down or would the ETF look to transfer their positions to other institutional investors?

I've never been party to an ETF sell down period so very interested to see how this affects SP.

[lawson]

I don't know but here's an article speculating on it:

With Gigantic Inflows, How Will This ETF Heavyweight Rebalance Itself?

BEN HERNANDEZ (https://www.etftrends.com/author/benhernandez/) MARCH 26, 2021



The iShares Global Clean Energy ETF (ICLN) (https://etfdb.com/etf/ICLN/) has grown so large that it’s now looking at a major rebalancing.
According to a recent Financial Times report (https://www.ft.com/content/d43ec8c5-0990-4781-b71f-82cb73a09610), ICLN and its European equivalent INRG “are braced for a major index rebalancing after amassing too much money in too few companies.” The problem of course isn’t the influx of capital, but too few holdings.
“Massive investor inflows into two BlackRock exchange traded funds pinned on just 30 clean energy stocks may force the asset manager to sell billions of dollars worth of shares to prevent it building up overly large holdings in the companies,” the FT report noted. “The potential sales of two New Zealand energy companies would represent the amount that is typically traded in 40-50 days in order to comply with a dramatic index rebalancing.
“The exchange traded funds might also need to offload more than 10 per cent of the free-float market capitalisation of some other companies if the shake-up proceeds as proposed next month, according to Société Générale, which revealed its views in a narrowly circulated report produced for clients,” the report added further.
ICLN seeks to track the S&P Global Clean Energy Index, which is designed to track the performance of approximately 30 clean energy-related companies. The fund is up over 130% the past year, so it’s not hard to understand why it’s so popular.
“I bet every hedge fund is looking at that list to work out where they can buy these stocks so they can sell them short,” said Peter Sleep, senior portfolio manager at 7 Investment Management.
“This gives an opportunity for front-running. The stocks that are going to be bought here are probably already going up in anticipation of this rebalancing,” added Kenneth Lamont, senior fund analyst for passive strategies at Morningstar.

https://www.etftrends.com/equity-etf-channel/with-inflows-how-will-etf-rebalance/

[bull....]

I don't know but here's an article speculating on it:

With Gigantic Inflows, How Will This ETF Heavyweight Rebalance Itself?

BEN HERNANDEZ (https://www.etftrends.com/author/benhernandez/) MARCH 26, 2021



The iShares Global Clean Energy ETF (ICLN) (https://etfdb.com/etf/ICLN/) has grown so large that it’s now looking at a major rebalancing.
According to a recent Financial Times report (https://www.ft.com/content/d43ec8c5-0990-4781-b71f-82cb73a09610), ICLN and its European equivalent INRG “are braced for a major index rebalancing after amassing too much money in too few companies.” The problem of course isn’t the influx of capital, but too few holdings.
“Massive investor inflows into two BlackRock exchange traded funds pinned on just 30 clean energy stocks may force the asset manager to sell billions of dollars worth of shares to prevent it building up overly large holdings in the companies,” the FT report noted. “The potential sales of two New Zealand energy companies would represent the amount that is typically traded in 40-50 days in order to comply with a dramatic index rebalancing.
“The exchange traded funds might also need to offload more than 10 per cent of the free-float market capitalisation of some other companies if the shake-up proceeds as proposed next month, according to Société Générale, which revealed its views in a narrowly circulated report produced for clients,” the report added further.
ICLN seeks to track the S&P Global Clean Energy Index, which is designed to track the performance of approximately 30 clean energy-related companies. The fund is up over 130% the past year, so it’s not hard to understand why it’s so popular.
“I bet every hedge fund is looking at that list to work out where they can buy these stocks so they can sell them short,” said Peter Sleep, senior portfolio manager at 7 Investment Management.
“This gives an opportunity for front-running. The stocks that are going to be bought here are probably already going up in anticipation of this rebalancing,” added Kenneth Lamont, senior fund analyst for passive strategies at Morningstar.

https://www.etftrends.com/equity-etf-channel/with-inflows-how-will-etf-rebalance/




i be surprised if the share fell hard

[Tomtom]

I'm certainly interested at anywhere near those levels.

This year is unusual because inflation has been hiked by unprecedented monetary and fiscal measures, as soon as those measures are backed out and credit growth rates adjust I'm sure inflation will regress back towards to trend.

[Ferg]

Interesting to see the disclaimer / out in the middle of this sentence:


“The exchange traded funds might also need to offload more than 10 per cent of the free-float market capitalisation of some other companies if the shake-up proceeds as proposed next month, according to Société Générale

[Maxtrade]

I'm certainly interested at anywhere near those levels.

This year is unusual because inflation has been hiked by unprecedented monetary and fiscal measures, as soon as those measures are backed out and credit growth rates adjust I'm sure inflation will regress back towards to trend.


Today was the first round of iShares ETF rebalancing sell off.

Agree with previous comment 'most transactions we don't even see on market', but the result is the same whenever there is a large sell off in a company such as this, the SP does decline. Hence todays major drop in share price. This week there will be continued bulk off of Meridian shares. In turn likely we will continue to see SP decline further throughout the week. Will likely see SP into the 4.7 range by end of the week.

[bull....]

Today was the first round of iShares ETF rebalancing sell off.

Agree with previous comment 'most transactions we don't even see on market', but the result is the same whenever there is a large sell off in a company such as this, the SP does decline. Hence todays major drop in share price. This week there will be continued bulk off of Meridian shares. In turn likely we will continue to see SP decline further throughout the week. Will likely see SP into the 4.7 range by end of the week.

according to the afr article

Kiwi energy players brace for BlackRock ETFs’ mega-selldown


Contact’s weighting in the index will drop from 4 per cent to something like 0.7 per cent, and Meridian’s from just under 4.5 per cent to just over 0.7 per cent. The index changes take effect on April 19 – so that’s in effect the day on which BlackRock has to dump a combined 170 million shares
It’s not as if this has gone unnoticed. It would seem about 25 million Meridian shares and 14 million Contact shares have been shorted so far

https://www.afr.com/markets/equity-markets/kiwi-energy-players-brace-for-blackrock-etfs-mega-selldown-20210402-p57g8n

[Maxtrade]

according to the afr article

Kiwi energy players brace for BlackRock ETFsÂ’ mega-selldown


Contact’s weighting in the index will drop from 4 per cent to something like 0.7 per cent, and Meridian’s from just under 4.5 per cent to just over 0.7 per cent. The index changes take effect on April 19 – so that’s in effect the day on which BlackRock has to dump a combined 170 million shares
ItÂ’s not as if this has gone unnoticed. It would seem about 25 million Meridian shares and 14 million Contact shares have been shorted so far

https://www.afr.com/markets/equity-markets/kiwi-energy-players-brace-for-blackrock-etfs-mega-selldown-20210402-p57g8n

So do you think it would make most sense to wait until April 19th to buy in a large quantity more of these shares. Rather than buy in prior such as this week?

[Maxtrade]

Selling off 456 Million Contact and 510 Million shares in Meridian come April 19th surely will directly put downwards pressure on the SP that day more so than the days leading up to it??

[Sideshow Bob]

Both up so far this morning - MEL only 0.8% but CEN 2.65% up. Both had very little go through today thus far.

Looks like the big trades for both are right at the end of the day....

Disc: Keen to buy if the price is right. Might put in a cheeky limit order.

[bull....]

So do you think it would make most sense to wait until April 19th to buy in a large quantity more of these shares. Rather than buy in prior such as this week?

all the short term shorts might buy back into the sell down. quick easy money is my guess. at what price that is is anyones guess

[Ohdoyle]

Both up so far this morning - MEL only 0.8% but CEN 2.65% up. Both had very little go through today thus far.

Looks like the big trades for both are right at the end of the day....

Disc: Keen to buy if the price is right. Might put in a cheeky limit order.

Just to clarify those are the figures in Dollars not shares......

Plenty of people seem to have sold in the lead up to this hoping to by back cheaper. (Just my opinion based anecdotes and the recent share price declines) Makes me think may not go as low as some are suggesting as there is actually alot if buyers out there watching these two. I too am keen to pick up some but like anything hard to pick the bottom and I think the bounce will be quick.

To me CEN is good value in the low 6s so if we get to that I may just jump. Some in here seem to expect it to go much lower than that.... only time will tell.

For MEL I dont really see value until around 4.50 and I dont think we are going to get there during this sell off.

Although I note others seeing it getting to 3.75, will be great buying if it does.

[JohnnyTheHorse]

There has been significant pre-positioning (hence prices have halved from their lofty heights). Because of this and the number of shorts I am not expecting a massive selloff, however I'd love to be wrong. Intend to hold short positions until rebalancing day, however will be monitoring price action closely.

[bull....]

as the article was saying 170m shares to be dumped thats at least 14m a day for just mel up till the 19th or if they cant it be an all out dump on the 19th

[Balance]

There has been significant pre-positioning (hence prices have halved from their lofty heights). Because of this and the number of shorts I am not expecting a massive selloff, however I'd love to be wrong. Intend to hold short positions until rebalancing day, however will be monitoring price action closely.

There’s is a lot of guessing, double guessing and gaming by short term players when it comes to index sell downs and buy ups.

Those who have shorted have to judge at what level they buy back. Bearing in mind that they will be competing with long term investors who will see the sell down as buying opportunities. Especially those who sold at the lofty levels during the index buy ups.

In the end, just remember that the index funds have no real incentive to manage the process - they are there to track the index and being ETF, the money is already in and they really do not care a stuff how the fund performs as long as it tracks the index faithfully.

[winner69]

Businessdesk has article BlackRock’s looming sell down of Meridian may never happen

Quotes a guy from Kernel Wealth who says all the talk is incorrect

Like this bit -

“To be frank, most active managers in New Zealand don’t understand how indices work,” he said.

[JohnnyTheHorse]

https://www.nbr.co.nz/story/blackrock-s-expected-sale-meridian-and-contact-energy-shares-wonderful-gift?utm_medium=email&utm_source=Heads%20Up

Another take on it.

Will be great to watch how this plays out. Although my bias is obviously further downside, one must always be mindful of other possibilities (especially when shorting). With this being so public and so many people thinking the same thing there is the very real possibility of a scenario where shorts get trapped and squeezed.

Hence I just let price action dictate what I do.

[Maxtrade]

https://www.nbr.co.nz/story/blackrock-s-expected-sale-meridian-and-contact-energy-shares-wonderful-gift?utm_medium=email&utm_source=Heads%20Up

Another take on it.

Will be great to watch how this plays out. Although my bias is obviously further downside, one must always be mindful of other possibilities (especially when shorting). With this being so public and so many people thinking the same thing there is the very real possibility of a scenario where shorts get trapped and squeezed.

Hence I just let price action dictate what I do.


Still a long way to go before shorts experience any potential squeeze with that immense volume of shares to be sold off. SP have rebounded a little but still highly likely to take another dive over the next week as we approach sell off date, or on the day of.

[see weed]

Still a long way to go before shorts experience any potential squeeze with that immense volume of shares to be sold off. SP have rebounded a little but still highly likely to take another dive over the next week as we approach sell off date, or on the day of.
SP up 60c in last week. :)

[bull....]

should be under 5 soon , see morning star have a 3.90 price valuation

was thinking it would go under 5 but it triple bottomed around this level instead. must been all those shorts buying back lol

[JohnnyTheHorse]

Interestingly Blackrock has only sold around 2m shares so far. 87m to go...

[Snoopy]

Interestingly Blackrock has only sold around 2m shares so far. 87m to go...


Blackrock aren't stupid. Hmmm let me rephase that. Blackrock are stupid as evidenced by the fact they paid up to $9.50 for MEL shares in a 'buy at any price' shopping spree. But I imagine they have learned from this, so won't be stupid twice. Blackrock has 87m MEL shares to sell and they know that the market knows this. So imagine you are that Blackrock manager with a flaming shirt from when you bought all those MEL shares for up to $9.50. Now imagine you have not been sacked (that is the part of this narrative that is hardest to believe). Thinking like a Blackrock manger, what would you do?

Well, Blackrock have other funds. So the first thing I would think about doing is moving those surplus MEL shares from the Blackrock ESG fund to another Blackrock fund. A fund that specialises in trading situations. No announcement to the stock exchange would be needed if they did this because the overall Blackrock shareholding would not change. 'Blackrock' could then go beyond the April 19th share resettlement square up date, The shorters would then panic with the share price not diving, driving the MEL share price up, At that point the Blackrock trading fund could do a couple of things.

1/ Offer parcels of MEL shares to NZ managed share funds at a small discount to the surging market price. That would keep the trading 'off market'. Furthermore the NZ funds would 'get a bargain' as the predicted sell off did not occur and they bought below the current share price surge peak.

2/ Offer some shares into the surging market themselves.

Effectively Blackrock would be 'playing the shorters', staying one step ahead of the shorters game. This strategy wouldn't get all Blackrock's money back. But it would minmise the damage. And as a Blackrock manager, 'I' just might save my job. What do others think? Is this an escape path for Blackrock?

SNOOPY

[JohnnyTheHorse]

It's a passive index fund though... Does Blackrock really care what price they sell them at? I wouldn't think they could sell shares in an ETF to themselves due to conflict of interest. But I agree with the sentiment that Blackrock will do what they can to profit from this.

[stoploss]

Blackrock aren't stupid. Hmmm let me rephase that. Blackrock are stupid as evidenced by the fact they paid up to $9.50 for MEL shares in a 'buy at any price' shopping spree. But I imagine they have learned from this, so won't be stupid twice. Blackrock has 87m MEL shares to sell and they know that the market knows this. So imagine you are that Blackrock manager with a flaming shirt from when you bought all those MEL shares for up to $9.50. Now imagine you have not been sacked (that is the part of this narrative that is hardest to believe). Thinking like a Blackrock manger, what would you do?

Well, Blackrock have other funds. So the first thing I would think about doing is moving those surplus MEL shares from the Blackrock ESG fund to another Blackrock fund. A fund that specialises in trading situations. No announcement to the stock exchange would be needed if they did this because the overall Blackrock shareholding would not change. 'Blackrock' could then go beyond the April 19th share resettlement square up date, The shorters would then panic with the share price not diving, driving the MEL share price up, At that point the Blackrock trading fund could do a couple of things.

1/ Offer parcels of MEL shares to NZ managed share funds at a small discount to the surging market price. That would keep the trading 'off market'. Furthermore the NZ funds would 'get a bargain' as the predicted sell off did not occur and they bought below the current share price surge peak.

2/ Offer some shares into the surging market themselves.

Effectively Blackrock would be 'playing the shorters', staying one step ahead of the shorters game. This strategy wouldn't get all Blackrock's money back. But it would minmise the damage. And as a Blackrock manager, 'I' just might save my job. What do others think? Is this an escape path for Blackrock?

SNOOPY
Snoopy I think you have missed one scenario ,the "special trading fund" could come in and buy shares on market , burning the shorts .... then start to off load to them
at prices closer to their average buy in .

[Maxtrade]

It's a passive index fund though... Does Blackrock really care what price they sell them at? I wouldn't think they could sell shares in an ETF to themselves due to conflict of interest. But I agree with the sentiment that Blackrock will do what they can to profit from this.

Agreed, it is just how passive index funds work. Yes that would be a conflict of interest, they won't want to mess with trying to do anything like that. They will see gains where they reallocate the proceeds of these shares selling off anyway. It will balances out for them, rather than them worry about getting their hands dirty with potential conflict trading actions and reallocation to other funds they own to sell through.

They will just rebalance and offload shares through brokers, institutional funds, and overflow to market. We didn't short, but holding off the urge to buy now, will hold nerve and wait for mid next week to feel confident to further increase CEN and MEL to our portfolios. Why not capitalise on Blackrocks unfortunate position. These opportunities do not come up often in the favour of investors looking to increase their portfolios in a stock.

[ratkin]

Agreed, it is just how passive index funds work. Yes that would be a conflict of interest, they won't want to mess with trying to do anything like that. They will see gains where they reallocate the proceeds of these shares selling off anyway. It will balances out for them, rather than them worry about getting their hands dirty with potential conflict trading actions and reallocation to other funds they own to sell through.

They will just rebalance and offload shares through brokers, institutional funds, and overflow to market. We didn't short, but holding off the urge to buy now, will hold nerve and wait for mid next week to feel confident to further increase CEN and MEL to our portfolios. Why not capitalise on Blackrocks unfortunate position. These opportunities do not come up often in the favour of investors looking to increase their portfolios in a stock.

Maybe the opportunity has passed? Another example of fear of the selloff being worse than the actual event itself.

[Hoop]

Maybe the opportunity has passed? Another example of fear of the selloff being worse than the actual event itself.
Hmmm ..a great example of a conflict between a fearful media and a favourable TA..

TA has been showing a bullish divergence these last 6 weeks which says the high number of buyers were optimistic of a possible bargain in the near future.. not fearful as the media lead us to believe..

If I believed in Conspiracy Theories this would be a candidate.

Previously I wrote on this thread that I believed MEL's value to be between $4.00 to $5.00..but the recent market behaviour indicates the price should be a lot higher than that..

TA says buy

Disc: have no MEL

12431

[JohnnyTheHorse]

Hmmm ..a great example of a conflict between a fearful media and a favourable TA..

TA has been showing a bullish divergence these last 6 weeks which says the high number of buyers were optimistic of a possible bargain in the near future.. not fearful as the media lead us to believe..

If I believed in Conspiracy Theories this would be a candidate.

Previously I wrote on this thread that I believed MEL's value to be between $4.00 to $5.00..but the recent market behaviour indicates the price should be a lot higher than that..

TA says buy

Disc: have no MEL

12431


What are your thoughts on TA reliability during large rebalancing events?

[winner69]

Businessdesk has article BlackRock’s looming sell down of Meridian may never happen

Quotes a guy from Kernel Wealth who says all the talk is incorrect

Like this bit -

“To be frank, most active managers in New Zealand don’t understand how indices work,” he said.


Wonder if they still think this

[Hoop]

What are your thoughts on TA reliability during large rebalancing events?
What I have found is the high volume helps TA reliability. I guess large volume rebalancing events falls into this catergory.

...TA unfriendly stocks (poor reliability) tend to be illiquid with low volume trading activity or those that have a very large percentage of buy & hold type shareholders (tightly held)

[Traderx]

Sell off has not occurred yet, in fact holdings have increased slightly in last few days (fund inflows) see https://www.ishares.com/us/products/239738/ishares-global-clean-energy-etf

[bull....]

they are all reporting in the newspapers the sell down is today

[JohnnyTheHorse]

It is effective from Monday 19th (US time), which means the rebalancing occurs on the Friday.

NZX have just confirmed it's happening today with extension of adjust session. Should be a fun day.

[winner69]

they are all reporting in the newspapers the sell down is today

Be funny if Kernel Wealth man is right and there is no big sell down

[glennj]

Be funny if Kernel Wealth man is right and there is no big sell down

Yes it will be interesting to see what happens. There may in deed be no huge sell down and associated big fall in price?
I've got a cheeky order in which is unlikely to be filled? This is for CEN not MEL.
Thus if there is a big price fall I'm happy to grab some CEN. (already hold both MEL & CEN)
If there is no big price fall it does not matter but if there is going to be a big discount on the current price I'll partake.

[Aaron]

I have my buy prices for both MEL & CEN but they mustn't be realistic looking at the depth and morningstars valuation in ASB securities. 7-8% yields not realistic in todays environment.

I wouldn't be surprised after seeing the article in the herald this morning that there will be more than enough eager buyers to prevent a significant fall.

[JohnnyTheHorse]

Be funny if Kernel Wealth man is right and there is no big sell down

Be embarrassing if it turns out he was talking about himself in not knowing how indicies worked.

[BigBob]

In with a cheeky bid for CEN too - happy to pick up some if they drop significantly, but not really expecting it to happen.

[JohnnyTheHorse]

My contact is advising latest confirmed numbers are MEL dropping from 4.63% to just under 0.8% of the fund.

Note: I don't have access to verify this information.

[winner69]

My contact is advising latest confirmed numbers are MEL dropping from 4.63% to just under 0.8% of the fund.

Note: I don't have access to verify this information.

Jeez, that’s an awful lot of shares to sell then

Just as well instos been selling heaps of other things to buy up (on the cheap) ...least that alleviates the problem for a while until those instos rebalance their own portfolios

[Sideshow Bob]

Hmmmm, MEL trading up 11c at the moment.

NZX website saying 3500 trade so far today.....average trade 184 shares.....

[JohnnyTheHorse]

Hmmmm, MEL trading up 11c at the moment.

NZX website saying 3500 trade so far today.....average trade 184 shares.....

I would expect all selling will occur in the closing auction and after market. This would be the strategy most likely to obtain the best price.

[Baa_Baa]

Jeez, that’s an awful lot of shares to sell then

Just as well instos been selling heaps of other things to buy up (on the cheap) ...least that alleviates the problem for a while until those instos rebalance their own portfolios

I can't remember where I got it from but the note I put on my chart some time ago says "Blackrock selling 100 million shares on 19/4/21"

All a bit of a mystery, and SP is up today so far.

[winner69]

I can't remember where I got it from but the note I put on my chart some time ago says "Blackrock selling 100 million shares on 19/4/21"

All a bit of a mystery, and SP is up today so far.

ThT 100 million quoted a lot - the Kernel Wealth man says it’s a lot less because not all Black Rock shares are invested in the index in questions.

[Traderx]

The wording on the SP website says changes take effect prior to market opening on Monday 19th. The funds could therefore trade on Monday morning NZ time, I think this is likely then (despite NZX seeming to suggest trading would be today and extending the after hours session), unless we are going to see a mad rush shortly.

https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20210324-1345159/1345159_spglobalcleanenergyconsultationexpscorecou ntweightingresults3-24-2021.pdf

Very little volume through currently.

[Greekwatchdog]

From the Herald..

The NZX is extending its trading hours by 45 minutes today to accommodate changes arising from the rebalancing of the S&P Global Clean Energy Index.


NZX Product Operations said the "adjust" trading session on the exchange's X-stream trading platform would be extended for the NZX main board, debt market, and the Fonterra Shareholders' market.


All eyes on Contact, Meridian as S&P index rebalancing looms - NZ Herald
"This amendment has been made to accommodate the rebalance of the S&P Global Clean Energy Index," NZX said.


Trading normally finishes at 5pm.


Heavy trading is expected to occur in Meridian and Contact Energy when the index changes take effect as they will see their weightings reduce substantially.


Trade in Contact and Meridian has already been volatile in advance of the change.


BlackRock - the world's biggest asset manager - has two iShares clean energy exchange traded funds (ETFs) which have amassed big stakes in Meridian and Contact. Both funds track the S&P Dow Jones Global Clean Index.


S&P will add 51 stocks to the index, which currently comprises just 30 green energy stocks.


There will also be modifications to the index's constituent weightings scheme.


It is understood that Contact's weighting will fall from 4 per cent to just under 0.7 per cent and Meridian's will go from 4.5 per cent to just over 0.7 per cent.

[peat]

always weirds me out a bit how they get extra time....

however let me say that I've been thinking everyone will be disappointed if they are expecting wild discounts to be available on this share.

[Greekwatchdog]

lol Yeah, make for an interesting watch from the sidelines. Might need to have a drink handy..

[Maxtrade]

In with a cheeky bid for CEN too - happy to pick up some if they drop significantly, but not really expecting it to happen.

What happened to the sell off. Haven't seen any large volume of shares traded today yet. I know the trading day isn't over yet but surely they aren't just going to dump them on market end of the day for Mondays opening??

[blockhead]

In with a cheeky bid for CEN too - happy to pick up some if they drop significantly, but not really expecting it to happen.

What price you set your cheeky bid in at ?

[Biscuit]

What happened to the sell off. Haven't seen any large volume of shares traded today yet. I know the trading day isn't over yet but surely they aren't just going to dump them on market end of the day for Mondays opening??


Both CEN and MEL been rising steadily all day. Clearly the market is not expecting a big sell off any day soon.

[JohnnyTheHorse]

Both CEN and MEL been rising steadily all day. Clearly the market is not expecting a big sell off any day soon.

Likely all part of the plan. Pump it during the day, then selloff in closing auction. That way you'll feel like you got a great discount, even though you just got them at todays opening price. That's my theory anyway.

[BigBob]

What price you set your cheeky bid in at ?

A long way from were we are now... 🙂

[Biscuit]

Likely all part of the plan. Pump it during the day, then selloff in closing auction. That way you'll feel like you got a great discount, even though you just got them at todays opening price. That's my theory anyway.

You could sell a few now and take the chance to buy back at the close. Don't think I'd take that gamble though. Closing action could be interesting, but not really looking that way at the moment. Maybe they still asleep?

[blockhead]

That nails it down then !

[Maxtrade]

Do they legally need to have rebalanced the ETF by Monday morning NZT. ie does the sell off absolutely need to occur before closing today, or could it be pushed out through the day on Monday. Haven't seen anywhere near the volume of shares trade on or off market today as the rebalance was suggesting. 72 Million contact energy shares, a long way off from that! Also what happens if the ETF haven't sold them off by cut off time?
Could they just be holding off and stalling to freak the shorters out into buying pushing the SP up then selling off then?

Anybody really know?

[mfd]

I expect they've made arrangements with other institutions to shift the bulk at the end of the day for a small discount. I picked up a few a couple of weeks ago and will have another pop today just in case there's a big sale into the auction but I'm not too hopeful.

[Traderx]

I expect they've made arrangements with other institutions to shift the bulk at the end of the day for a small discount. I picked up a few a couple of weeks ago and will have another pop today just in case there's a big sale into the auction but I'm not too hopeful.

Interested to know why the instos would take this on? Its a big chunk to digest. Whats in it for them?

[Maxtrade]

Doesn't even appear that they have even tried selling any off through the open market today??

[bull....]

61 m for sale at 5.89

[BigBob]

That nails it down then !

OK then - there's a strong support level around 560... I am slightly above that...

As I said, cheeky bid... Happy to get them (although not expecting to) and happy if they don't drop...

[ScrappyO]

Wow..Finished 6.05

[mfd]

Interested to know why the instos would take this on? Its a big chunk to digest. Whats in it for them?

Probably easier to negotiate a discount with some large institutions than dump tens of millions of shares onto the market without any prearranged deals

[Balance]

Looks like shorters have got their tail feathers burnt!

[Maxtrade]

Surprised there were that many buyers out there at $6.05! Way higher than many thought. Surprising! Will be interesting to see if that price now stabilises there or who knows what happens. There doesn't seem to be any logic to trading these days.

[blockhead]

OK then - there's a strong support level around 560... I am slightly above that...

As I said, cheeky bid... Happy to get them (although not expecting to) and happy if they don't drop...

Ah, I thought it was CEN you had the cheeky bid in for, I was going to try a few myself but neither MEL or CEN have gone where I thought they may have today.

[JohnnyTheHorse]

Well there you have it... essentially the opposite of what everyone was expecting! I think I mentioned a few pages back that this often often happens (although my base case was still that it would drop).

I covered my longer term short at 560 after the resistance break and strength of the stock. Hopefully the volatility continues as this has been a fantastic trading stock.

Only disappointment with this one is it never reached the level where I would add a significant position to the long term portfolio. No worries though, still some great deals on the NZX in select stocks.

[Traderx]

You’ve got to take your hat off to blackrock, much better outcome for them than I expected! Who on earth is on the other side of the trade?

[Joshuatree]

Yay ,huge overhang gone ,like a spring released up and away.

[ados_nz]

Short Friday. Long Monday.

[BigBob]

Ah, I thought it was CEN you had the cheeky bid in for, I was going to try a few myself but neither MEL or CEN have gone where I thought they may have today.

It was CEN...

But I put you wrong - I was not at my computer when I posted and couldn't quite remember...

I was actually just over 660... Not 560...

Anyway, miles off regardless... Alg...

[JSwan]

MEL and CEN are becoming like meme stocks now 😂

[Baa_Baa]

It was CEN...

But I put you wrong - I was not at my computer when I posted and couldn't quite remember...

I was actually just over 660... Not 560...

Anyway, miles off regardless... Alg...

I was in the bid but way under that, until Blackrock showed their hand in the auction and amazingly (to me anyway) the bids just piled in over the top, millions of them. About then I canceled my order, became obvious pretty quickly there was not going to be a capitulation bloodbath. Basically they managed to get out on market at about 5% discount to the price at trading close. Remarkable. Still they lost an eye watering amount on their recent buy in. Big end of town, hard to understand at times. Fun watching though, confounded most everyone who posted here it seems.

Anyone made a killing on this?

[RGR367]

Dividends paid today and at the rate MEL is paying dividends, I will recoup what I paid in its IPO in less than 3 years. And that's computing only on the basis of net dividends paid. I cannot complain for this being a good-bottom-drawer kind of a share.
GL and kudos to all long term holders.

[Hoop]

I wondered on Wednesday if it was wise for me to present my chart showing MEL's breakout. I wasn't overly confident as breakouts do fail, albeit rarely...and there would be a good reason if this breakout failed even though the oncoming share dump was widely publicized....However TAers (Chartists) get criticised (losing their credibility by using hindsight) when they produce a chart after the event....so I went ahead and published the chart on Wednesday and held my breath...

My chart showing MEL's bullish breakout triggering TA buy signals before the re-balance (Wed 14th April) (https://www.sharetrader.co.nz/showthread.php?9340-MEL-Meridian-Energy/page115).probably didn't make sense to a few investors who figured using price/demand logic that the huge share dump would significantly drop the price back towards its fundamental value..

At close today the huge number of shares presented to the market at Friday's close were gobbled up at $6.05 up 5c for the day and above the rectangle pattern price breakout ...Earlier today, charted price support was tested with a price fall (throwback) (https://www.investopedia.com/terms/t/throwback.asp) but the price bounced up during the afternoon and at market close remained above it's support.(very bullish)

Score (so far) TA=1 shorters and bargain hunters =0 :D

Monday trading has question marks and perhaps later on as those shares get on sold through the system...Next week we may get educated as how the system protects itself when a sudden but expected re-balance causes a surge of shares which could swamp a small market..Greekwatchdog post (https://www.sharetrader.co.nz/showthread.php?9340-MEL-Meridian-Energy/page116) tells us part of it.....All very interesting :)


What are your thoughts on TA reliability during large rebalancing events?

This result shows TA can be reliable during large re-balancing events.

[alex f]

You’ve got to take your hat off to blackrock, much better outcome for them than I expected! Who on earth is on the other side of the trade?

They are playing games, they were pumping the price all day.
At the end of day, I’m sure some corporates wanted blocks but the rest were probably “sold” to other Blackrock holdings.
Buyers for 100m shares don’t just appear from no where.
They’ll unload them over time, but may very well drive the price up in the short term to flush out shorters

[Biscuit]

They are playing games, they were pumping the price all day.
At the end of day, I’m sure some corporates wanted blocks but the rest were probably “sold” to other Blackrock holdings.
Buyers for 100m shares don’t just appear from no where.
They’ll unload them over time, but may very well drive the price up in the short term to flush out shorters

Good thinking, that seems a reasonable explanation.

[pak]

Good thinking, that seems a reasonable explanation.
Seems logical.
Can any one here gain access to those large transactions to see who was the buyer?

[Balance]

Actually, people forget how big Blackrock is - US$8.67 trillion (yes, trillion) under management.

So there are plenty of funds within its control which they would be happy to put a measly NZ$1 billion (of undervalued stocks forced to be sold) into.

That’s the real story.

Shorters also got caught in the squeeze and scrambled to cover.

[Biscuit]

Actually, people forget how big Blackrock is - US$8.67 trillion (yes, trillion) under management.

So there are plenty of funds within its control which they would be happy to put a measly NZ$1 billion (of undervalued stocks forced to be sold) into.

That’s the real story.....

I thinks that's the substance of Alex's comment. Essentially Blackrock never needed to dump the shares on market at all.

[Balance]

I thinks that's the substance of Alex's comment. Essentially Blackrock never needed to dump the shares on market at all.

They still have to sell on market to avoid conflict of interest & not to favour one fund over another.

But yes, they do not have to dump the shares and sell them cheap.

The NZ$1billion represents less than 0.01% of FUM for Blacktock.

[Tomtom]

I missed a Zumba class to get the bunting out of storage. So much time wasted.

[Balance]

Actually, people forget how big Blackrock is - US$8.67 trillion (yes, trillion) under management.

So there are plenty of funds within its control which they would be happy to put a measly NZ$1 billion (of undervalued stocks forced to be sold) into.

That’s the real story.

Shorters also got caught in the squeeze and scrambled to cover.

Down 22.5c today - who would have thought after the mad scramble for the Blackrock sell down stock on Friday.

Looks like the shorters should have waited until today?

[peat]

Down 22.5c today - who would have thought after the mad scramble for the Blackrock sell down stock on Friday.

Looks like the shorters should have waited until today?

Hoops breakthrough certainly not following through immediately. Unless today changes a couple of daily black candles will make the TA look somewhat less attractive though it might still be considered 'back to test'.

[Hoop]

Hmmm ..a great example of a conflict between a fearful media and a favourable TA..

TA has been showing a bullish divergence these last 6 weeks which says the high number of buyers were optimistic of a possible bargain in the near future.. not fearful as the media lead us to believe..

If I believed in Conspiracy Theories this would be a candidate.

Previously I wrote on this thread that I believed MEL's value to be between $4.00 to $5.00..but the recent market behaviour indicates the price should be a lot higher than that..

TA says buy

Disc: have no MEL



I wondered on Wednesday if it was wise for me to present my chart showing MEL's breakout. I wasn't overly confident as breakouts do fail, albeit rarely...and there would be a good reason if this breakout failed even though the oncoming share dump was widely publicized....However TAers (Chartists) get criticised (losing their credibility by using hindsight) when they produce a chart after the event....so I went ahead and published the chart on Wednesday and held my breath...

My chart showing MEL's bullish breakout triggering TA buy signals before the re-balance (Wed 14th April) (https://www.sharetrader.co.nz/showthread.php?9340-MEL-Meridian-Energy/page115).probably didn't make sense to a few investors who figured using price/demand logic that the huge share dump would significantly drop the price back towards its fundamental value..

At close today the huge number of shares presented to the market at Friday's close were gobbled up at $6.05 up 5c for the day and above the rectangle pattern price breakout ...Earlier today, charted price support was tested with a price fall (throwback) (https://www.investopedia.com/terms/t/throwback.asp) but the price bounced up during the afternoon and at market close remained above it's support.(very bullish)

Score (so far) TA=1 shorters and bargain hunters =0 :D

Monday trading has question marks and perhaps later on as those shares get on sold through the system...Next week we may get educated as how the system protects itself when a sudden but expected re-balance causes a surge of shares which could swamp a small market..Greekwatchdog post (https://www.sharetrader.co.nz/showthread.php?9340-MEL-Meridian-Energy/page116) tells us part of it.....All very interesting :)



This result shows TA can be reliable during large re-balancing events.

down again..561c -27c.... Breaking support ..Is it a failing breakout in progress Hmmmm..a crazy market...What did I say about not believing in conspiracy theories.. Glad to be away from this market and on the side lines

Shorters = 1 TA= 0...

[RRR]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MEL/370918/344518.pdf

Blackrock already have reduced their stake from 7.09% to 3.33%

They have also reduced contact energy stake

[bull....]

dry starting to impact mels profits i reckon

NZAS and Meridian: voluntary load reductionhttps://www.nzx.com/announcements/371280

[peat]

monthly update shows the overall situation is slightly better as regards storage (tho still quite low ) but the SI/NI imbalance worsens.

[IAK]

Hopefully, the weather system moving over the South Island this weekend will see plenty of water going into the southern hydro lakes

[Sideshow Bob]

Hopefully, the weather system moving over the South Island this weekend will see plenty of water going into the southern hydro lakes

Not showing any bump as yet.....

https://www.meridianenergy.co.nz/who-we-are/our-power-stations/lake-levels

https://www.genesisenergy.co.nz/rivers-lakes-and-rainfall-graph?image=Lake%20Tekapo&Region=Tekapo&measurement=lake-level

[boysy]

https://www.metservice.com/maps-radar/rain/cumulative-rainfall?tab=last-24-hours

Plenty of rain falling where it needs to, will take a few days to show up in the meridian data on lake levels

[Beagle]

Has anyone got any detailed broker research they could share with me on this one and / or other's in this sector ? Please PM me and I will advise my email address.
Thanks in advance.

[peat]

I have just what you want

12660

/s

[Sideshow Bob]

I have just what you want

12660


/s

Nice one Peat!! :t_up: None of the EBIT, EPS, PE, ROE sort of rubbish!

[peat]

Off thread topic

but I saw Mark Lister of Craigs speak last night.... I enjoyed it and his view is positive with re-opening of the world economy the big factor. I appreciate the time it took him to visit this out of the way little town. Golf club was packed!! No doubt the free drinks and canapes helped. I didnt stay for those - it looked like everybody else had sharpened their elbows in preparation lol .

[Beagle]

Nice one Peat!! :t_up: None of the EBIT, EPS, PE, ROE sort of rubbish!

LOL I do like the ESG of this one but definitely not to the exclusion of all else.

[Entrep]

Share price still in the doldrums. I note Craigs perfer CEN and MCY over this.

[peat]

yes I think all that activity over the last year has really tired this one out. Perhaps still being shuffled around?
I wonder if that excitement might return in the fullness of time - quite some time perhaps but....
Those attributes that were sought still exist and are still revered.

[Joshuatree]

Shakespeare?

[STr]

mmmmm - DRO or Divy cash. Another decision to make for today.

[Beagle]

Tried reading through the investor presentation this morning. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MEL/377872/353026.pdf, nearly passed out from boredom.

Tried wading through the almost endless pages up front of cultural and ethic inclusion, diversity, sustainability, Iwi initiatives, injury's, pictures of birds and on and on and on and on and on it went.
Financial results buried down the bottom of the report like some fourteenth rate priority.
Under investigation for overcharging and I wouldn't mind wagering that St Cindy would love to rip into this for the benefit of all her comrades.

Nothing flash at all with the results and to be frank this company takes ESG stuff to a really extreme level. The dog is not impressed with the numbers or the extreme ESG approach and is pretty sure St Cindy will cause trouble to distract us from our worries about Covid and from their super slow motion vaccine roll out, so its not for me. Stick with my dirty old Indonesian coal burning GNE, numbers will look much better tomorrow I reckon and less ESG nonsense to wade through too.

[ScrappyO]

Tried reading through the investor presentation this morning. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MEL/377872/353026.pdf, nearly passed out from boredom.

.

That’s funny, I thought the exact same thing. It’s like they had to fill the presentation up with something.

[peat]

Financial results buried down the bottom of the report like some fourteenth rate priority.

Yes I know riiight
I totally was wearing out the Page Down key

(Disc minor holding)

[Beagle]

Vastly different approach with GNE's presentation this morning. Gets straight to the point of what's important to investors. See GNE thread and link therein.

[Mista_Trix]

I'm now worried about how much political interference this stock will have going forward. Was happy to accumulate over time and just have it as a divvy. But if the govt wants change in this space then 1. SP will bounce around and 2. Divvy could be jeopardised. What are peoples thoughts?

[peat]

this govt is a threat to all business

I raised regulatory risk on the Power Shares thread. Its a real thing

[nztx]

this govt is a threat to all business

I raised regulatory risk on the Power Shares thread. Its a real thing


Already happening - remember the recent commotion over Discounts ? ;)

It's all about the lowest common denominator not reading things correctly, paying late
& then screaming ripped off on whatever discount disallowed .. ;)

[RTM]

this govt is a threat to all business

I raised regulatory risk on the Power Shares thread. Its a real thing

Governments come and go.....we'll need power forever. Yes...I am also concerned about regulatory risk, but not enough to bail out of my Power Shares.

[ados_nz]

12911Are others experiencing this on depth?

[Onion]

What do you think is unusual?

That looks pretty normal for the last 15 minutes of trading -- the "Pre-close" period.

No trades occur during that period but bids and asks are matched off for execution at 5:00pm if there is an overlap in pricing. The pink-shaded trades are the "matched" ones.

[bull....]

big jump in price yesterday , wonder if it has anything to do with ampol looking at buying meridian aus assets which are for sale

[RTM]

https://www.newsroom.co.nz/tiwai-point-smelter-owner-refuses-to-give-power-back-to-the-people?utm_source=Friends+of+the+Newsroom&utm_campaign=ecb21b37e8-Week+In+Review+4.9.21&utm_medium=email&utm_term=0_71de5c4b35-ecb21b37e8-97906431

[Beagle]

Rio Tinto basically said it was unprofitable and that may well have been the case when Aluminum prices were well south of $2,000. Since then aluminum prices have roared up and Meridian locked in an ultra low rate deal for four years with no apparent price escalation clause in the event of Aluminum prices recovering ? Seems like a very one sided deal.

[ratkin]

Rio Tinto basically said it was unprofitable and that may well have been the case when Aluminum prices were well south of $2,000. Since then aluminum prices have roared up and Meridian locked in an ultra low rate deal for four years with no apparent price escalation clause in the event of Aluminum prices recovering ? Seems like a very one sided deal.

Meridian will get their revenge when the next round of negotiations start. The hydro situation is why I have shares in both Genesis and Meridian, when lake levels are low Genesis does well

[fish]

Meridian will get their revenge when the next round of negotiations start. The hydro situation is why I have shares in both Genesis and Meridian, when lake levels are low Genesis does well

Rio Tinto in their quest to make big profits have damaged their future and may well regret driving such a hard bargain .
Kiwis like to play clean and fair .
Threatening jobs of loyal workers and damaging the environment is not what it should be about .
Does anyone think there is a possibility that they might see the light and renegotiate ?

[Beagle]

The case to tell Rio Tinto to get stuffed has got a lot stronger with the way they are conducting themselves, there is no question about that but I retain serious reservations about the negotiating skills of Meridian's senior management.

I am sure they will get their revenge in 2024 but in the meantime this deal is clearly an absolute shocker for shareholders. Surely heads need to roll ?

[Joshuatree]

https://reneweconomy.com.au/australias-big-smelters-could-also-be-giant-batteries-and-go-green-at-same-time-86721/

Smelters could be giant batteries

[alex f]

Is there a government review being held, regarding generator market positions.? Stuff mentioned a review due out later this month and Meridian being forced to sell a generation asset (not happy about the cutting generation to raise the spot price)
Who’s doing the review? Likely outcomes?

[turnip]

Is there a government review being held, regarding generator market positions.? Stuff mentioned a review due out later this month and Meridian being forced to sell a generation asset (not happy about the cutting generation to raise the spot price)
Who’s doing the review? Likely outcomes?

I think it is the Electricity Authority wholesale market competition review (https://www.ea.govt.nz/monitoring/enquiries-reviews-and-investigations/2021/wholesale-market-competition-review).

It seems to me that forcing 51% govt owned Meridian to sell a big generation asset would be seen as a further privatisation by stealth, unless the buyer was Genesis or Mercury who are also 51% govt owned. Perhaps less messy just to split Meridian into two smaller companies instead, with the govt retaining its 51% share in both.

[Marilyn Munroe]

Is there a government review being held, regarding generator market positions.? Stuff mentioned a review due out later this month and Meridian being forced to sell a generation asset (not happy about the cutting generation to raise the spot price)
Who’s doing the review? Likely outcomes?

There is also the possibility of a repeat of the Governments Tekapo Power Scheme cash grab where Meridian was directed by the government to sell the scheme to Genesis and forced Meridian to hand over the cash from the sale but made Genesis take on debt to fund the purchase.

Boop boop de do
Marilyn

[peat]

paywalled
Winners and losers in electricity price changes | BusinessDesk (https://businessdesk.co.nz/article/energy/winners-and-losers-in-electricity-price-changes)

[Joshuatree]

Can you at least tell us who the winners are Peat,thanks.

[RTM]

paywalled
Winners and losers in electricity price changes | BusinessDesk (https://businessdesk.co.nz/article/energy/winners-and-losers-in-electricity-price-changes)

Hmmmm....well I think I own them all...so I guess it will even itself out !

[peat]

In dollar terms, Mercury NZ would pay $8.6m more a year, Auckland-based lines company Vector $7.8m more and NZ Steel $6.8m more.
The big winners in dollar terms would be Meridian Energy, paying $14.3m less a year, and Tiwai, $13.6m less.

But this is just a proposal and the article points out that last time the TPM was attempted to be rewritten the analysis was scrutinsed to death and found wanting.

[Master98]

https://www.stuff.co.nz/business/126785572/households-pay-extra-200-a-year-for-power-because-of-smelter-watchdog-believes
"But the authority did not raise the possibility of requiring Meridian or any other generators to relinquish assets, or requiring the structural separation of gentailers into separate generation and retail businesses."

[peat]

we anticipate there will be areas where the Authority's analysis will benefit from feedback and more information from stakeholders


:p

(trans. Its a crock of sh*t mate)

[Swala]

Meridien price now down to a level not seen since May 2020. Time to buy? Interested in any viewpoints.

[rmnz]

Meridian agrees terms for the sale of Australian businessMeridian’s Board has agreed the sale of Meridian’s Australian business to a consortium of Shell Energy Operations Pty Ltd, a wholly owned subsidiary of Shell (“Shell”) and Infrastructure Capital Group (“ICG”) (together, “the Consortium”) for A$729 million, subject to possible adjustment depending on the timing of completion. (Meridian agrees terms for the sale of Australian business - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/383219))

[Slim_Pikins]

Why does the market hate the energy shares now? is it just the prospect of higher interest rates?

[GTM 3442]

Why does the market hate the energy shares now? is it just the prospect of higher interest rates?

Partly interest rates, but a larger part has to do with uncertainty, especially Meridian. I am tempted to try to catch a falling knife.

[Beagle]

Partly interest rates, but a larger part has to do with uncertainty, especially Meridian. I am tempted to try to catch a falling knife.

Confucius say "man who try to catch falling knife lose fingers".

[Slim_Pikins]

Confucius say "man who try to catch falling knife lose fingers".

I know what you mean. I literally have to "Thumb" my way through paperwork nowadays.:)

[Onion]

Why does the market hate the energy shares now? is it just the prospect of higher interest rates?

SP less than half the value back in January!

[Snoopy]

SP less than half the value back in January!

SP less than half the price back in January. That ESG fund that pushed up the price in January were pretty flakey with their 'valuations'. All brainless index buying IIRC.

SNOOPY

[Joshuatree]

Its dropped because the mkt was expecting $1.$1.2 bill for the sale of aus assets? According to craigs recent Oct research estimate anyways.

[Joshuatree]

A snippet from an investment broker

"Estimated acquisition price range of NZ$1 to NZ$1.2b
We assume an acquisition price will be based on c. NZ$40m EBITDA, a lower earnings outlook to prior years due to ASX Futures pricing but also supported by the long-run average of NEM wholesale electricity prices. MEL currently trades on an EV/EBITDA multiple of 19x, with its Australian business making up c. 5% of its earnings. We assume an acquisition multiple of between 25x to 30x, allowing for a price premium driven by the business' vertically integrated nature, small development pipeline and buyer motivation, thus resulting in a valuation of NZ$1b to NZ$1.2b."

[Joshuatree]

Up 6c!!:huh::eek::eek2:Is the bottom in,Jeez i hope so!

[kiora]

Bottoms in
https://www.stuff.co.nz/business/127020332/land-bought-for-1-billion-bid-to-turn-southland-into-global-it-hub?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Monday+17+J anuary+2022

[Aaron]

Bottoms in
https://www.stuff.co.nz/business/127020332/land-bought-for-1-billion-bid-to-turn-southland-into-global-it-hub?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Monday+17+J anuary+2022

With a 4.5% gross yield and 29 times earnings in a rising interest rate environment. How confident are you that the bottom is in?

[fish]

With a 4.5% gross yield and 29 times earnings in a rising interest rate environment. How confident are you that the bottom is in?

Likely to provide a far better return than a Bank term deposit (which will have a negative real return with rising inflation driving a rising interest rate environment )
Looks a really good yield that has the potential to massively increase when current Tiwai contract expires .
As to the SP impossible to pick the bottom but it must be close .
The rationale I use is ask myself is the sp likely to be a dollar higher in 5 years or a dollar lower.Then I move to 2 dollars higher or lower and so on

[Beagle]

Yes the new contract will be different in due course but that's quite some time away and then there's this to also consider.
What faith do you have in management who were so stupid to sign such a MASSIVE giveaway deal to Tiwai point with no price escalation clause if Aluminum recovered ? How do you have confidence in these people going forward that they can execute future commercial deals that optimize returns for shareholders ?

For mine, Rio showed management up as completely incompetent and for my money that insight has value to me in terms of whether I would choose to trust management going forward.

Disc: GNE shareholder on a vastly higher yield and a believer that all things highly ESG are currently priced well beyond fair value for no other reason than its the "flavour of the month and year to do so"

[Jantar]

This new data centre is good news for both Meridian and Contact.
https://www.stuff.co.nz/business/127020332/land-bought-for-1-billion-bid-to-turn-southland-into-global-it-hub?fbclid=IwAR3mZ011abV2V8T2NGVcCoX5PZIc5bnFKYSvE S7iZL-GpOZv9Ii6AXEBv8U

[fish]

This new data centre is good news for both Meridian and Contact.
https://www.stuff.co.nz/business/127020332/land-bought-for-1-billion-bid-to-turn-southland-into-global-it-hub?fbclid=IwAR3mZ011abV2V8T2NGVcCoX5PZIc5bnFKYSvE S7iZL-GpOZv9Ii6AXEBv8U

Thank you for confirming this-I tend to forget about Contact with Tiwai but they also felt compelled to give cheap power to Tiwai .
Jantar your expert input is always much appreciated .
Can I ask your opinion re the future of the tiwai contract assuming aluminium price stays high .
I assume the data centre has already negotiated a supply price which would be higher than Meridian and Contact are supplying Tiwai now .
Has Tiwai shot itself in the foot by paying a low price in the current Contract ?
Would it be in Tiwai s best interest to start negotiating now for 2025 onwards ?

[Jantar]

…..
Can I ask your opinion re the future of the tiwai contract assuming aluminium price stays high .
I assume the data centre has already negotiated a supply price which would be higher than Meridian and Contact are supplying Tiwai now .
Has Tiwai shot itself in the foot by paying a low price in the current Contract ?
Would it be in Tiwai s best interest to start negotiating now for 2025 onwards ?
I no longer have the inside information I used to have access to. My gut feeling is that Tiwai has shot itself in the foot to some extent. If they decide to keep operations going they may be able to negotiate a favourable short term contract, but longer time frames will see them paying similar to other large users. Apart from the data centre MEL and CEN are investigating a hydrogen plant in Southland that would use a similar amount of energy that Tiwai does now. The advantage of a hydrogen plant is that it can stop production instantly and remain off without damage until supply is restored. That means they can react to price, and have a ceiling price at which production would stop. The smelter can't be offline for more than 90 minutes without suffering damage.

I would assume that tentative negotiations for electricity supply to the data centre have already happened, and would likely to be at least 50% higher than Tiwai pay.

[fish]

I no longer have the inside information I used to have access to. My gut feeling is that Tiwai has shot itself in the foot to some extent. If they decide to keep operations going they may be able to negotiate a favourable short term contract, but longer time frames will see them paying similar to other large users. Apart from the data centre MEL and CEN are investigating a hydrogen plant in Southland that would use a similar amount of energy that Tiwai does now. The advantage of a hydrogen plant is that it can stop production instantly and remain off without damage until supply is restored. That means they can react to price, and have a ceiling price at which production would stop. The smelter can't be offline for more than 90 minutes without suffering damage.

I would assume that tentative negotiations for electricity supply to the data centre have already happened, and would likely to be at least 50% higher than Tiwai pay.

thanks Jantar
Hydrogen plants look exciting-so versatile and as you say can stop energy requirement instantly
wholesale prices are spiking high as I write .
It used to be said that cen made big profits in a dry year but is this still the case ?
Is mel positioned well in this regard?

[Jantar]

...
It used to be said that cen made big profits in a dry year but is this still the case ?
Is mel positioned well in this regard?
Yes, to an extent.
It depends on gas availability. If there is gas available then CEN can benefit from a dry year, but if there is a shortage of gas then CEN will be hurt as badly as MEL.

[Sideshow Bob]

Media coverage on Tiwai Point aluminium smelter - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/386901)

Meridian Energy notes today’s media coverage on the future of the Tiwai Point aluminium smelter. Meridian confirms it is not in discussions with the smelter’s owner, NZAS1, about a new electricity contract. The existing contract between Meridian and NZAS ends on 31 December 2024.
1NZAS is a joint venture between Rio Tinto (79.36%) and Sumitomo Chemical Company Limited (20.64%).

[Louloubell]

Does todays finish point to a pleasant surprise tomorrow?

[Master98]

Does todays finish point to a pleasant surprise tomorrow?
maybe cash bonus from Australia business sale?

[Sideshow Bob]

Nope, no special.


Meridian Energy Limited 2022 Interim Results - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/387714)

Meridian Energy has reported net profit after tax of $145 million from continuing operations for the six months ended 31 December 2021, $82 million (36%) lower than the same period last year, mainly reflecting negative changes in the value of hedge instruments. Excluding these hedge value movements, Meridian reported a $1 million decrease in EBITDAF1 and a $5 million decrease in underlying net profit after tax2.

Meridian’s Board has declared an interim ordinary dividend of 5.85 cents per share, 2.6% higher than for the same period last year. The company’s Dividend Reinvestment Plan will apply to this year’s interim dividend, at no discount to the average market price over a five-day period ending on 23 March 2022. The interim dividend will be paid, and new shares issued under the reinvestment plan on 8 April 2022.

Meridian’s Chief Executive Neal Barclay says that operating performance in the first half of this financial year includes a reduction in revenue received from the Tiwai Point Aluminium Smelter, so the on-par performance with last year reflects continued strong momentum in the company’s operating business.“It’s pleasing to see continued growth in retail sales, which reflects an enduring commitment to excellent customer service and support.

Our retail performance has helped offset the impact of NZAS exit pricing, and we’re making sound progress on our strategy to develop new sources of South Island demand following the Tiwai contract end in 2024,” Mr Barclay says.Meridian completed the sale of MEA (which includes Powershop Australia) on 31 January 2022. The final sale price was A$740 million including interest and intercompany funding movements since 1 July 2021.

With completion of the MEA sale having occurred on 31 January 2022, Meridian’s investment in MEA has been classified as held for sale and a discontinued operation at 31 December 2021. Meridian expects to recognise a gain on sale in the order of $240 million in its full year accounts for 2022. “This transaction is an outstanding result for Meridian’s shareholders and a testament to the quality of the Meridian Energy Australia business and the employees who have been dedicated to its success,” says Mr Barclay.

Meridian has commenced bulk earthworks at its Harapaki wind farm development in Hawke’s Bay and has been actively working to increase its renewable development pipeline. This includes the company’s November 2021 announcement of the development of Ruākākā Energy Park.

This project will house a battery energy storage system (BESS) at least 100MW in capacity, as well as a utilityscale solar farm.F

our potential partners have been selected for the next phase of the Southern Green Hydrogen project, a joint venture between Meridian Energy and Contact Energy to investigate the feasibility of developing the world’s first large-scale green hydrogen plant in Southland.A process is now underway to assess proposals from each of the four counterparties to develop the production and export facility in Southland.

“We’re excited to move forward with the RFP and bring the project closer to fruition,” adds Mr Barclay.The electricity sector has been the focus of a number of regulatory reviews, including the Electricity Authority’s Wholesale Market Review and reviews of the 9 August 2021 power outages.

“While we have some concerns with some of the preliminary findings from the Electricity Authority’s most recent Wholesale Market Review, there is no doubt that as an industry we need to move faster to help New Zealand achieve its climate goals. We always support ways that the sector can provide better outcomes to consumers, and we’re committed to working with the sector, businesses, government, and consumers to ensure we achieve these goals

[Master98]

Nope, no special.
Last few days good run seems market too optimistic about today's results.

[Dlownz]

Nothing stands out as impressive in this one. Guess they have to wait till 2025 and they put the price up on tiwai

[Marilyn Munroe]

Aluminium is often refered to as electricity in solid form.

The price of aluminium is going gang busters, and could go even higher if aluminium sanctions are placed on Czar Putin.

Rio Tinto know the intimidation they used on the Government and Meridian last time won't work in the future. This hopefully will mean more jingling in Meridians cash register.

Boop boop de do
Marilyn

[buy_high_sell_lo]

Hello everyone, from my stance looking at the report I can get the following take away.
Retail, wholesale and commercial businesses are growing which is a positive however the poorer margins from the NZAS has been weighing overall topline, cashflow and EBITDAF1 down.
This is somewhat expected however with aluminum prices rising there is an opportunity to improve the energy margins going forward.

What I am hoping someone would help me with is understand is whether or not there is any material impact of the drop in the value of hedge instruments?
Please see from above report
"Meridian Energy has reported net profit after tax of $145 million from continuing operations for the six months ended 31 December 2021, $82 million (36%) lower than the same period last year, mainly reflecting negative changes in the value of hedge instruments."

When I look at the income statement I can see the main culprit is:
Net change in fair value of energy hedges - (68) vs previous period 73

Going into the notes under D1 I have found that they are a combination of:
1. Total Treasury Hedges - Assets 82 vs previous period Assets 88
2. Foreign Exchange hedges and swaps - Assets 24 Liabilities (84) vs previous period Assets 24 Liabilities (207)
3. Energy Hedges - Assets 256 Liabilities (52) vs previous period Assets 194 Liabilities (64)

Net Position Assets 362 Liabilities (136) vs previous period Assets 306 Liabilities (271)

Unfortunately I was not able to make sense of the notes enough to make this section balance the income statement...
However going back to my initial question, does this have any material impact on the actual profitability of the business?
Also if anyone would like to assist in making this balance I would very much appreciate it.

[dreamcatcher]

Thanks Meridian & NZ for helping us achieve this profit..........

"Rio Tinto has reported its best-ever annual profit and a record full-year dividend of US$16.8bn"

[stoploss]

Thanks Meridian & NZ for helping us achieve this profit..........

"Rio Tinto has reported its best-ever annual profit and a record full-year dividend of US$16.8bn"

I can't understand why they didn't link the price Rio paid for electricity to the price of Aluminium on the spot market.
They complained about the low prices and it not being viable for them to operate . MEL look like they wrote a one way deal , very poor for shareholders.

[Cyclical]

I can't understand why they didn't link the price Rio paid for electricity to the price of Aluminium on the spot market.
They complained about the low prices and it not being viable for them to operate . MEL look like they wrote a one way deal , very poor for shareholders.

NZ Inc. is pretty good at that tbf...push overs.

[RTM]

I can't understand why they didn't link the price Rio paid for electricity to the price of Aluminium on the spot market.
They complained about the low prices and it not being viable for them to operate . MEL look like they wrote a one way deal , very poor for shareholders.

Hold some RIO shares as well ! I am enjoying then…apart from Mr Pip.

[RGR367]

Don't you just love it when one of your biggest holdings paid you a dividend today :t_up: This payment made each share of mine basically at 18 cents as far as my ledger is concerned. Another year with a higher pay out will make this another negative-book-value holding :p

[limmy]

MEL has been a great investment, best amongst my energy sector.

[bull....]

lake levels getting low

https://www.nzx.com/announcements/390582

[kiora]

lake levels getting low

https://www.nzx.com/announcements/390582

"National electricity demand in March 2022 was 1.3% lower than the same month last year"
All as a result of agriculture lower?
"Agricultural volumes were -18.2% lower than March 2021"

[Sideshow Bob]

"National electricity demand in March 2022 was 1.3% lower than the same month last year"
All as a result of agriculture lower?
"Agricultural volumes were -18.2% lower than March 2021"

Irrigation from the sky was on over the last few months, in many of the farming areas that traditionally rely on irrigation. Except in the areas of the main hydro lakes.....

[Louloubell]

Up nearly 7% today. The big boys reshuffling or something brewing, like Tiwai and MEL talking?

[mfd]

Look who's come crawling back. Hopefully MEL have a stronger negotiating position this time with the proposed hydrogen plant lining up as an alternative.

https://i.stuff.co.nz/national/129405479/nzas-begins-power-negotiations-to-keep-tiwai-aluminium-smelter-open-beyond-2024

[Sideshow Bob]

Up nearly 7% today. The big boys reshuffling or something brewing, like Tiwai and MEL talking?

Meridian notes NZAS statement on Tiwai Point smelter - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/396018)

Meridian Energy notes the statement from New Zealand’s Aluminium Smelter (NZAS1), that the owners of the Tiwai Point smelter have begun exploring potential pathways with electricity generators for the smelter’s future, beyond the end of the current contract in December 2024.
Meridian will engage with NZAS as part of its process and expects this will include contract negotiations.
A copy of NZAS’s statement can be found here:
www.nzas.co.nz/files/3841_2022072875725-1658951845.pdf

[bull....]

Meridian notes NZAS statement on Tiwai Point smelter - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/396018)

Meridian Energy notes the statement from New Zealand’s Aluminium Smelter (NZAS1), that the owners of the Tiwai Point smelter have begun exploring potential pathways with electricity generators for the smelter’s future, beyond the end of the current contract in December 2024.
Meridian will engage with NZAS as part of its process and expects this will include contract negotiations.
A copy of NZAS’s statement can be found here:
www.nzas.co.nz/files/3841_2022072875725-1658951845.pdf (http://www.nzas.co.nz/files/3841_2022072875725-1658951845.pdf)

so they want to stay if the pricing is right

[xafalcon]

Look who's come crawling back. Hopefully MEL have a stronger negotiating position this time with the proposed hydrogen plant lining up as an alternative.

https://i.stuff.co.nz/national/129405479/nzas-begins-power-negotiations-to-keep-tiwai-aluminium-smelter-open-beyond-2024

NZAS cannot be trusted. Their negotiation tactics are reprehensible. I'm happy for them to keep operating, but they must pay a price that is stand-alone profitable. The current situation where pricing requires subsidy from all other electricity users in NZ is unacceptable

Any new agreement must be long term eg. 10 years. With pricing and annual increases linked to a publicly accessible benchmarks

[bull....]

NZAS cannot be trusted. Their negotiation tactics are reprehensible. I'm happy for them to keep operating, but they must pay a price that is stand-alone profitable. The current situation where pricing requires subsidy from all other electricity users in NZ is unacceptable

Any new agreement must be long term eg. 10 years. With pricing and annual increases linked to a publicly accessible benchmarks

didnt they allude they were prepared to pay a bit more than last time? anyway i think this is very positive news + add in the future potential for meridian of the data centre and hydrogen businesses to come and mel should be looking sweet in the future

[gains]

so they want to stay if the pricing is right

"..securing a long-term presence forthe smelter." the concrete palace down there has done it's dash as I only interpret that one way - rebuilding facilities.

[xafalcon]

didnt they allude they were prepared to pay a bit more than last time? anyway i think this is very positive news + add in the future potential for meridian of the data centre and hydrogen businesses to come and mel should be looking sweet in the future

They screwed the government when the power companies had their IPOs. They screwed MEL a couple of years ago by threatening to close the joint. They screwed transpower over transmission costs. They have screwed all other electricity users in NZ for decades. Now it's pay-back time

Come 2024, there will be other options for the power. Those options don't have the baggage that NZAS has. Make NZAS tender for electricity supply

But yes, very good news for all electricity generators. Nothing like competition for available electricity. Moves the balance of power firmly into the generators court

[bull....]

But yes, very good news for all electricity generators. Nothing like competition for available electricity. Moves the balance of power firmly into the generators court

all gentailers up today on the news so the market agrees it looks good for them.
combine with falling bond yields recently and all good

[SPC]

No. This mining company has been playing successive governments like a pack of naive fools, and the current government is probably the most naive and foolish of them all. RT know labour will buckle under the threat of blue collar jobs going in the run up to a cliff hanger election and Meridian et al will bend over and touch their toes at the 'negotiation table' for another 4 years of taxpayer subsidised fiscal sxdomy. It's time NZ grew up and chucked these bxtards out of the country.

[iceman]

I hear Iceland's national power generating company is doing very well from Rio Tinto this year after signing a different contract in February 2021 that included an electricity price base linked to the USA CPI and aluminium prices.
That was achieved after years of wrangling and word for word same tactics by Rio Tinto as we have seen in NZ.
https://energycluster.is/agreement-reached-between-landsvirkjun-and-rio-tinto/

[sb9]

I hear Iceland's national power generating company is doing very well from Rio Tinto this year after signing a different contract in February 2021 that included an electricity price base linked to the USA CPI and aluminium prices.
That was achieved after years of wrangling and word for word same tactics by Rio Tinto as we have seen in NZ.
https://energycluster.is/agreement-reached-between-landsvirkjun-and-rio-tinto/

I would say stick it to them, always been a bit of big bully the Rio Tinto boys and extracted maximum bargain out of NZ power companies. Time to get some back!!!

[xafalcon]

No. This mining company has been playing successive governments like a pack of naive fools, and the current government is probably the most naive and foolish of them all. RT know labour will buckle under the threat of blue collar jobs going in the run up to a cliff hanger election and Meridian et al will bend over and touch their toes at the 'negotiation table' for another 4 years of taxpayer subsidised fiscal sxdomy. It's time NZ grew up and chucked these bxtards out of the country.

Every NZ household is paying an extra tra $200 per year thanks to the current pricing agreed by MEL & CEN. That is $0.025/kWh based on average 8000kWh usage

[fish]

I hear Iceland's national power generating company is doing very well from Rio Tinto this year after signing a different contract in February 2021 that included an electricity price base linked to the USA CPI and aluminium prices.
That was achieved after years of wrangling and word for word same tactics by Rio Tinto as we have seen in NZ.
https://energycluster.is/agreement-reached-between-landsvirkjun-and-rio-tinto/
In the link the ceo of the generator states it will improve their efficiency.
Does mean improved flexibility of amount of electricity supplied ?

[GTM 3442]

Every NZ household is paying an extra tra $200 per year thanks to the current pricing agreed by MEL & CEN. That is $0.025/kWh based on average 8000kWh usage

That's not difficult. No NZ household has the volume to exert pricing power. RT has the volume to exert pricing power. So it does. You or I would do the same.

But once there are serious options available to use the electricity currently used by RT, the threat of closure diminishes and the picture changes.

Now, out of idle curiosity, should RT close the smelter, who is liable for any site clean-up costs?

[xafalcon]

Now, out of idle curiosity, should RT close the smelter, who is liable for any site clean-up costs?

NZAS has acknowledged they are responsible for remediation costs, when they finally shut down the plant

[SPC]

Rio T will be thinking there is no way the manapouri electricity will be used for any other purpose because the current Government simply can't build or deliver anything. Talk of a green hydrogen plant is pie in the sky. RT must be laughing.
Redeployment of smelter workers at a data centre is not going to happen as these are largely lights out operations.
Meridian and co will tell us they're going to talk tough...then later we'll hear they sold NZ down the drain, again.

[tommy_d]

NZAS will be prepared to pay more so that they can start getting the emissions trading scheme industrial allocation subsidy again.
here's a little summary of that change earlier this year for those who missed it
https://www.newsroom.co.nz/smelters-carbon-credit-subsidy-slashed

and if you want the detail:
https://www.treasury.govt.nz/sites/default/files/2022-04/ria-mfe-seaf-mar22.pdf

[Louloubell]

https://i.stuff.co.nz/business/129457220/rio-tinto-and-meridian-square-up-for-another-round-of-brinkmanship-at-bluff

[Louloubell]

Quietly keeps on trucking in the right direction. I love it.

[bull....]

Electricity Authority makes 'urgent' move to block cheap Tiwai smelter power deal

https://www.stuff.co.nz/business/129610289/electricity-authority-makes-urgent-move-to-block-cheap-tiwai-smelter-power-deal

[Jaa]

Looked like a big increase in revenue was coming for Meridian:


The smelter is believed to paying its major supplier, Meridian Energy, a low-ball price of about 3.5 cents per kilowatt-hour for power
....
Market speculation prior to the authority’s intervention suggested that a new power contract could be struck at a price in the region of 6 to 8 cents per kilowatt-hour.

The bureaucrats think they know better than the professionals though...

A positive interpretation is the EA will leverage Rio Tinto into paying more but we all know they are just a political construction so can and will be ignored by the government once the pressure comes on. So will just result in an increase in costs and uncertainty for everyone and yet more bureaucrats being hired where there should be none.

Amazing how dysfunctional and inefficient the power market is.

[Sideshow Bob]

Meridian Energy Limited 2022 Full Year Financial Results - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/397479)

Meridian Energy has reported underlying net profit after tax1 of $233 million, a slight increase on the prior year figure of $231 million. EBITDAF2for the year was $709 million, up $17 million or 2.5% on the prior year. Including the benefit of a $214 million gain on the sale of its Australian business and $281 million of positive non-cash movements in the value of hedge instruments, Meridian Energy has reported$664 million of net profit after tax for the year ended 30 June 2022

[Davexl]

Meridian Energy Limited 2022 Full Year Financial Results - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/397479)

Meridian Energy has reported underlying net profit after tax1 of $233 million, a slight increase on the prior year figure of $231 million. EBITDAF2for the year was $709 million, up $17 million or 2.5% on the prior year. Including the benefit of a $214 million gain on the sale of its Australian business and $281 million of positive non-cash movements in the value of hedge instruments, Meridian Energy has reported$664 million of net profit after tax for the year ended 30 June 2022


So why the 3% drop in the SP?
Surely after the extraordinary one-off gains we could be looking at a special div perhaps?

[Louloubell]

A good monthly update, moi thinks.

[RTM]

https://www.meridianenergy.co.nz/news-and-events/new-blog-post-7

Thought this might have warranted market advice.
For those interested.

[mwri]

Seems Meridian is trying to pitch this as an alternative to onslow. Will be interesting to see where it goes, especially after contact backs out

[mwri]

Meridian to build battery at Ruakaka. 100MW peak delivery, with 200MWh of storage to be completed in 2nd half 24

Meridian to build Ruakākā Battery Energy Storage System - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/404090)

[RGR367]

Divvy in the bank yesterday. One more payment like it will make this holding in the negative-book-value territory. A very nice gift from the gov't had you participated and/or accumulated since its IPO. Congrats to all holders :t_up:

[Sideshow Bob]

https://www.nzx.com/announcements/417236

Meridian Energy has reported net profit after tax of $95 million for the year ended 30 June 2023, downfrom $664 million reported last year, which included the gain on the sale of Meridian's Australianbusiness and positive non-cash movements in the value of hedge instruments.

Excluding the gain on sale and non-cash movements in hedge instruments, underlying net profit aftertax1 was up 35% to $315 million and operating earnings or EBITDAF2, was up 10% to $783 million forthe year ended 30 June 2023. This improved operating result was driven by higher customer sales,higher generation volumes and positive wholesale trading results.

“We’ve continued to focus on playing a key role in helping Aotearoa New Zealand to decarbonise bydriving forward with our renewable developments and offering customers an enhanced range of cleanenergy solutions,” says Chief Executive Neal Barclay.“I’m particularly proud that Meridian is leading the market in being the first New Zealand company toprogress a grid-scale battery construction in this country, which will add significantly more flexibility tothe electricity system in the form of energy storage. We have also secured credible and committedpartners to advance the Southern Green Hydrogen project. We see this as a potential game changeras it will support Aotearoa’s drive to energy independence by providing significant demand responseand an energy source for hard to abate processes.”

The Board declared a final ordinary dividend of 11.90 cents per share, 3% higher than the previousyear. This brings the total ordinary dividends declared for the year to 17.90 cents per share, also 3%higher than the previous year.

Meridian grew overall sales volumes by 2.6%, while also increasing focus on creating moremeaningful relationships with customers to support their decarbonisation opportunities.

The company has made good progress expanding the Zero electric vehicle charging network, as wellas electric vehicle and solar customer participation. Meridian is also supporting customers with bothprocess heat conversion and demand flexibility volumes, which is building on the 50MW demandresponse agreement reached with New Zealand’s Aluminum Smelter, announced in June, andsupports our low carbon hedge portfolio.

This month, Powershop won Consumer New Zealand’s People’s Choice award for the third year in arow, and the sixth time since 2015.During the year, Meridian completed the migration of the Meridian customers to the Flux customercare and billing platform.

All Meridian customers are now on this world-class platform that will enablethe business to continue to deliver great customer service and innovative products in a rapidlyevolving competitive environment. The company also expects to continue to reduce the cost to serveits customers.

Meridian’s Energy Wellbeing program, launched during the year, continued to support the company’smost vulnerable customers.“An initial trial provided support for 250 households, and we found that by being a conduit into socialsupport agencies and by applying our own capabilities we were able to help these customers withenergy affordability challenges,” says Barclay.

“We are now ramping up the program and targeting $5 million into a new Energy Wellbeing Fund tosupport families in energy hardship with the aim of reaching 5,000 households by the end of 2024.”

[Marilyn Munroe]

The United States has announced sanctions prohibiting the trading of Russian metals including aluminum on the London Metal Exchange and the Chicago Mercantile Exchange. In addition they have prohibited the import of these metals into the United States.

This should strengthen the hand of Meridian in power supply negotiations with the smelter

https://www.bloomberg.com/news/articles/2024-04-12/us-imposes-sanctions-on-use-of-russian-metals-on-exchanges

Boop boop de do
Marilyn

[xafalcon]

The United States has announced sanctions prohibiting the trading of Russian metals including aluminum on the London Metal Exchange and the Chicago Mercantile Exchange. In addition they have prohibited the import of these metals into the United States.

This should strengthen the hand of Meridian in power supply negotiations with the smelter

https://www.bloomberg.com/news/articles/2024-04-12/us-imposes-sanctions-on-use-of-russian-metals-on-exchanges

Boop boop de do
Marilyn

I think the deal has largely been agreed already.

The smelter recently bought new uniforms for all their staff, the cost was eye-watering (6 figures from memory). No business about to "up sticks and leave" would waste that amount of money on new sets of kit for soon the be redundant employees

And transpower has upgraded the lines heading north, so manapouri power is no longer entirely stranded in southland if NZAS ever decides to leave

The days of NZAS having overwhelming leverage are gone. However, NZAS pays an important role in the electricity market, helping to keep supply and demand balanced (always on the tight side), and consequentially keeping wholesale prices high. So this will have added some restraint to price demands

[Sideshow Bob]

https://www.nzx.com/announcements/432102

Meridian and NZAS Sign Long Term Contracts


Meridian Energy and New Zealand’s Aluminium Smelter (NZAS) have signed a package of conditional 20-year contracts for part of the NZAS Tiwai Point aluminium smelter’s electricity needs. The package includes a long-term fixed price contract for wholesale electricity price cover and a significant demand response agreement.

Meridian Energy Chief Executive Neal Barclay says the agreement is an excellent result after many years of hard work.

“This is a fantastic outcome for New Zealand and the Southland region. It’s further proof that large industrial businesses can utilise New Zealand’s renewable energy advantage and create low carbon sustainable products, high value jobs and export dollars for our country.”
“We are very pleased that the NZAS team have adopted a more flexible approach toward their operations. The demand response element of this new agreement is groundbreaking, not only for this country but globally. The level of flexible demand offered by NZAS will support the electricity system to become even more renewable, while relying less on coal and gas when the hydro lakes are low.”

Mr Barclay says the contracts are also a good result for Meridian.

“This new package of contracts is commercially sustainable and delivers value for our shareholders, so we are talking a real win-win here. The NZAS decision to extend the smelter life removes significant uncertainty for the electricity sector, which also helps pave the way for new renewable energy to be built.”

Meridian will now consider implications on future pipeline investment and dividend policy. An update on the dividend policy can be expected at Meridian’s full year results briefing in late August.

Key terms of the long-term contracts include:
• 377 MW base load volume from 2025
• pricing that begins 1 July 2024 with a 20-year term, up to and including 31 December 2044
• four demand response options, ranging from 25 MW to 185 MW – an upper limit that roughly equates to one of Huntly’s Rankine units. Three quarters of a called option will come off Meridian’s contracted volume

A maximum of approximately 800 GWh of demand response is available in any given year, with an average of approximately 400 GWh per annum over the 20-year term of the contract. This will be valuable during periods of low lake inflows, providing critical dry year cover to the electricity system.

The new arrangements will replace all the current arrangements between Meridian and NZAS, with the current arrangements terminating when the new arrangements take effect.

The contracts are conditional on satisfaction of conditions precedent, which include regulatory approval from the Electricity Authority. If approval is given, the contracts will take effect from the later of 1 July 2024 and the date Meridian confirms to NZAS that all conditions precedent are satisfied or waived. If conditions precedent are not all satisfied or waived before 31 December 2024, the contracts will not come into effect.

NZAS has provided Meridian with a letter setting out their commitment to environmental remediation of the smelter site, including details of their work to date with key stakeholders. A copy of the environmental remediation letter accompanies this release.

A copy of the long-term electricity contract, the demand response agreement and the other related conditional contracts signed by Meridian and NZAS are available here. A summary of the key terms of the long-term electricity contract and the demand response agreement accompanies this release.

[kiwikeith]

https://www.nzx.com/announcements/432102

Meridian and NZAS Sign Long Term Contracts



Meridian will now consider implications on future pipeline investment and dividend policy. An update on the dividend policy can be expected at Meridian’s full year results briefing in late August.



The price that NZAS pays is going up but there are implications on future pipeline investment. So does this mean the dividend is going to rise or fall?

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looks like they are already deploying the terms of the agreement with NZAS, as they have issued a 25MWh reduction notice for end of June, July and beginning of August

Guess this means they see a shortfall in their available quantity of hydro during this period. And they'll have to pay NZAS for use of this facility ...