Latest / Best of Business / Stew Hamilton: Mercury Energy CEO on the company returning to profit

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Stew Hamilton: Mercury Energy CEO on the company returning to profit · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks Be follow
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  Speaker 2: Got another healthy set of books for another gen. Taylor.
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  Speaker 2: Mercury's recorded a net profit of twenty million dollars for
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  Speaker 2: the first half of the year. That's up from last
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  Speaker 2: year's sixty seven million dollar loss in the Chief executive
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  Speaker 2: Stu Hamilton joins us now.
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  Speaker 1: High stup, Hi, how are you very well?
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  Speaker 2: Good to talk to you again. I'm not tempted to
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  Speaker 2: do a capital raise like the others.
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  Speaker 3: No, No, we're in a position in which we think
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  Speaker 3: is well managed. We've been disciplined and how we manage
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  Speaker 3: our money, how we earn our money and spend it.
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  Speaker 3: So we're investing wisely, performing strongly, and think that gives
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  Speaker 3: us options without having to go and seek capital from
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  Speaker 3: our owners.
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  Speaker 2: Now. I have heard some commentary today blaming the high
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  Speaker 2: power prices that we're all paying across the country on
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  Speaker 2: high dividends and you've lifted dual dividends. Is that a
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  Speaker 2: fair point that's been made.
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  Speaker 3: No, I can understand why people will be thinking that way,
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  Speaker 3: Like there's a tough time in New Zealand and energy
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  Speaker 3: prices certainly contribute to the cost of living, but the
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  Speaker 3: number of things we do and actually to try and
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  Speaker 3: bring it down, and part of that is taking over
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  Speaker 3: half of the money we earn and investing at back
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  Speaker 3: and our current power plants and in new power plants.
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  Speaker 2: What are your thoughts on LNG.
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  Speaker 3: We're broadly supportive of LERG. I think the thing that's
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  Speaker 3: trying to be solved here is to come up with
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  Speaker 3: a mechanism that ensures that in the dry years we've
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  Speaker 3: got something that backs us up. Now, we had to
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  Speaker 3: look at ourselves and for Mercury we didn't see it
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  Speaker 3: necessary to fit inside our suite of assets in portfolio.
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  Speaker 3: But I think overall for New Zealand, depending on how
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  Speaker 3: that the prices flow through, it's probably something that should
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  Speaker 3: be part of the mix. But it's probably part of
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  Speaker 3: the mix, it's not the whole mix.
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  Speaker 2: What price does it have to be to be cheaper
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  Speaker 2: than coal?
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  Speaker 3: So if coal comes in, it's typically sets a selling
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  Speaker 3: of what the price should be and typically somewhere around
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  Speaker 3: that two hundred, two hundred and fifty dollars per megord
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  Speaker 3: hour for coal, which means that ol ange gas coming
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  Speaker 3: into New Zealand probably needs to be around that fifteen
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  Speaker 3: to twenty dollars per gigadul, which.
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  Speaker 2: Is but it's coming on at twenty five, Yeah, so
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  Speaker 2: it might be a little bit.
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  Speaker 3: So what it'll wind up doing is set a ceiling
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  Speaker 3: on what the price could go to during those dry years.
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  Speaker 3: So back in twenty twenty four when we had that
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  Speaker 3: period of high wholesale power prices and they went up
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  Speaker 3: to about eight hundred dollars for Mega what hour, this
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  Speaker 3: would set a cap which means that it shouldn't be
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  Speaker 3: heading up. There should be sort of capped around that
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  Speaker 3: two hundred and fifty to three hundred dollar manie.
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  Speaker 2: Yeah, okay, I really appreciate you talking to it. By
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  Speaker 2: the way, you're putting up power prices this year, the power.
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  Speaker 3: Prices are typically going up around that five to seven percent,
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  Speaker 3: but a big chunk of that is associated with lines
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  Speaker 3: and transmission increases.
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  Speaker 2: Okay, sheer, Thank you as always, Stu Hamilton, Mercury's Chief executive.
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