MCY - Mercury Energy

Started by Left Field, Aug 16, 2022, 08:38 AM

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Left Field

Mercury calling it a 'transformational year.'.... they didn't mention an 'inflection point'.

Mercury reported $581 million EBITDAF, $118 million up on the prior year's $463 million EBITDAF reflecting the addition of wind generation and performance improvements in the core business.

Operational expenditure was $230 million, up $40 million on the prior year, primarily due to an increase in operational activity resulting from acquisitions. Total stay-in-business capital expenditure was $68 million, up $12 million on the prior year. After normalising for acquisitions and new activity operational expenditure was broadly flat for its ninth year in a row.

Mercury's net profit after tax was $469 million, up $328 million on the previous year, driven by the $367 million net gain on sale of Tilt Renewables shareholding which was immediately reinvested into the associated acquisition of Tilt's New Zealand operations and future development options.

https://www.nzx.com/announcements/397010

"The difficulty lies not in new ideas... but in escaping from old ideas." (J M Keynes.)

Waltzing

wholesales prices spiking and capacity at or near limits..

https://www.interest.co.nz/economy/129075/severe-lack-rain-wind-and-sun-exposing-risks-renewable-electricity-generations-role

global warming going to mean sun and wind needs building out?

Basil

Rankine units really showing their worth this winter !

lorraina

Therefore our GNE divie looks secure.

Basil

#4
Dividend security needs to be measured in years, not months.
What's becoming clear is their plans to replace baseload generation from Kupe, (oil and gas in decline) and the Rankines with renewables has flaws.  You should be okay at the new lower level for a few years as Kupe does its best to keep pumping out as much oil and gas as possible...after that as the field goes into its twilight years, I think the chances of another dividend reset even lower, are very high.
I'd rather own stocks where the dividends have a very long history of going up, (good example TRA), than down.
People need basic cars just like they need power.  You know that.

lorraina

Yes,but it great knowing every time I get a power bill I have it more than covered with my GNE divies.
And yes I love basic cars sellers too.Nice people.
 

Shareguy

#6
Have taken a position today.  Looks good buying to me. Most research is over $7.

Possible exit in MSCI index in Feb25

Shareguy

FB latest note says it all

"Mercury
Don't Be Passive, This is an Active Opportunity"

The recent share price weakness presents a compelling entry point says FB.


Basil

What's the gross forecast yield mate?

Shareguy

FB say DPS of 24c FY25E and 26c FY26E. Which is not fantastic but in falling interest rate environment acceptable for me for safe blue chip stock. Capital appreciation the drawcard.

Ferg

#10
Is Mercury like Spark where dividends are not sustainable over the long term?

Over the past 10 years:
  • dividends have exceeded cash earnings
  • capex has not added to EPS
  • dividends are being funded from generation asset revaluations which is non cash, and
  • consequently debts have doubled

Although they have bought the Trustpower customer base.  It will be interesting to see how that acquisition unfolds.

Shareguy

#11
Craig's latest saying they think will STAY in the index. Not long to wait.

•   Mercury (O/Weight TP $7.36, last at $6.13) – MCY is expected to print 1H25 EBITDA of c$437m (flat YoY) with CIPe for FY25 EBITDA $879m. This will be a solid interim result given the weak hydro during the period that was offset to some extent by new wind generation. MCY has the 2nd strongest Balance Sheet in the sector behind MEL and an established development pipeline. MCY shares are also trading close to 12-month lows, this partly reflects index selling based on expectations for MCY to exit the MSCI next month (for CEN) – see our Index discussion below – CIP are counter-consensus on this issue and do not expect MCY to exit, hence the shares are over-sold.

Waltzing

thanks for that have an old FOBA account somewhere and dont log in....
looks like the market started buy back at 5.70...