Three months ended 31 December 2016
>> QUARTERLY HIGHLIGHTSMOMENTUM LOW
CHURN
4,250GWh
STRONG MOMENTUM CONTINUES FOLLOWING MERCURY RE-BRAND LOWEST CUSTOMER SWITCHING RATE OF THE MAJOR RETAILERS HYDRO GENERATION FORECAST MAINTAINED FOR FY17 >> COMMENTARYMOMENTUM CONTINUED FOLLOWING RE-BRAND
For the second consecutive quarter, Mercury's continued focus on rewarding customer loyalty resulted in the Company achieving the lowest switch rate (churn) amongst the major retailers. For the quarter ending 31 December 2016, Mercury's annualised churn was 15.9%, 3.3% below the market average of 19.2% based on publicly provided Electricity Authority data. This continued the strong momentum delivered following the Mercury re-brand in July 2016 and contributed to customer numbers increasing by 6,000 over the period.
During the quarter, more than 100,000 customers were rewarded with a Free Power Day and almost 100,000 customers also registered to benefit from the Company's new Airpoints partnership.
The average energy price to customers was down 4.4% to $106.11/MWh relative to the same period last year. This reflects additional commercial and industrial sales contracted throughout the year at lower prices than achieved historically (contributing to a $5.50 reduction in the VWAP of sales to business customers) and the timing of customer loyalty product offerings.
FY17 HYDRO FORECAST MAINTAINED
Total hydro generation increased 205GWh on the same period last year to 1,112GWh. This reflects inflows into the Taupo catchment being 28GWh above average and storage being 134GWh above average at the start of the period.
Based on the hydrological conditions observed throughout the quarter, Mercury continues to forecast midpoint FY2017 hydro generation at 4,250GWh.
LWAP/GWAP remained flat with the prior comparable period last year, at 1.03. This reflects a continuation of lower wholesale price volatility driven by above average national hydro generation. National hydro storage started 246GWh above average and remained above average throughout the quarter.
Reflecting the continued wet conditions, the locational wholesale price difference (basis) between Otahuhu and Benmore nodes was $8.38/MWh (or 21%).
DEMAND IMPACTED BY HIGHER TEMPERATURES AND WET CONDITIONS
After adjusting for temperature, national demand was down 3.2% compared to the same quarter last year. The irrigation, dairy processing and industrial sectors contributed -1.6%, -0.7%, and -0.7% respectively to the decrease in total national demand.
The decrease in the agriculture sectors can be attributed to the wet conditions experienced during the last six months with significantly lower South Island irrigation requirements compared to last year along with reduced national milk collection.
Mercury will release its financial results for the six months ended 31 December 2016 on 21 February 2017.
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE01 >> OPERATING STATISTICSOPERATING INFORMATION | Three months ended 31 December 2016 | Three months ended 31 December 2015 | Six months ended 31 December 2016 | Six months ended 31 December 2015 | ||||
ELECTRICITY SALES | ($/MWh) | Volume (GWh) | VWAP1 ($/MWh) | Volume (GWh) | VWAP1 ($/MWh) | Volume (GWh) | VWAP1 ($/MWh) | Volume (GWh) |
FPVV sales to customers | 106.11 | 1,088 | 110.94 | 1,000 | 112.30 | 2,395 | 115.56 | 2,253 |
FPVV sales to residential customers | 554 | 554 | 1,302 | 1,340 | ||||
FPVV sales to business customers | 534 | 446 | 1,093 | 913 | ||||
FPVV purchases from market | 1,150 | 1,056 | 2,529 | 2,380 | ||||
Spot customer purchases | 231 | 233 | 454 | 520 | ||||
Total NZEM Purchases | 48.38 | 1,381 | 70.23 | 1,289 | 54.83 | 2,983 | 63.27 | 2,900 |
ELECTRICITY CUSTOMERS ('000) | 387 | 380 | ||||||
North Island Customers | 346 | 344 | ||||||
South Island Customers | 41 | 36 | ||||||
Dual Fuel Customers | 43 | 41 | ||||||
CONTRACTS FOR DIFFERENCE | Volume (GWh) | Volume (GWh) | Volume (GWh) | Volume (GWh) | ||||
Buy CfD | 395 | 458 | 904 | 929 | ||||
Sell CfD | 905 | 893 | 1,801 | 1,919 | ||||
End User CFD | 346 | 353 | 673 | 746 | ||||
510 | 435 | 897 | 990 | |||||
ELECTRICITY GENERATION | VWAP ($/MWh) | Volume (GWh) | VWAP ($/MWh) | Volume (GWh) | VWAP ($/MWh) | Volume (GWh) | VWAP ($/MWh) | Volume (GWh) |
Hydro | 49.28 | 1,112 | 69.36 | 907 | 55.14 | 2,367 | 61.41 | 2,215 |
Gas | - | - | 76.74 | 46 | - | - | 68.62 | 146 |
42.94 | 657 | 65.48 | 669 | 48.71 | 1,290 | 58.93 | 1,299 | |
44.97 | 58 | 66.27 | 59 | 49.77 | 113 | 59.40 | 118 | |
Total | 46.87 | 1,827 | 67.91 | 1,681 | 52.78 | 3,770 | 60.78 | 3,778 |
LWAP/GWAP | 1.03 | 1.03 | 1.04 | 1.04 | ||||
CARBON EMISSIONS ('000 TONNES CO2E) | 90 | 99 | 186 | 249 | ||||
METRIX AMI METERS ('000) | 399 | 389 |
1 VWAP is volume weighed average energy only price sold to FPVV customers after lines, metering and fees
2 Includes Virtual Asset Swap volumes in both Buy and Sell CfD volumes of 176 GWh for the 3 months ended 31 December 2016 and 176 GWh for the 3 months ended 31 December 2015 and of 352GWh for the 6 months ended 31 December 2016 and 352GWh for the 6 months ended 31 December 2015
3 Includes Mercury's 65% share of Nga Awa Purua generation
4 Tuaropaki Power Company (Mokai) equity share
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE02 >> MARKET DATA > ELECTRICITY GENERATION BY COMPANY FOR THE THREE MONTHS ENDED 31 DECEMBERMERIDIAN ENERGY CONTACT ENERGY MERCURY GENESIS ENERGY TRUSTPOWER/TILT OTHER
15%
Financial Year Q2 2017
6%
5%
34%
16%
Financial Year Q2 2016
7%
5%
34%
19%
21%
17%
21%
Source: Electricity Authority
> SHARE OF ELECTRICITY SALES (GWh) FOR THE THREE MONTHS ENDED 31 DECEMBERMERCURY OTHER
Financial Year Q2 2017
Financial Year Q2 2016
14%
13%
86%
87%
Source: Mercury Purchases and Transpower SCADA
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE03 > OTAHUHU WHOLESALE PRICE AND NATIONAL HYDRO STORAGE LEVELS#REF! #REF! #REF! #REF!
1 80
0.9
0.8
75
0.7
0.6
h
Wh W
G0.5 70/M
$
0.4
0.3
65
0.2
0.1
0 60
0 0 0 0 0 0 0 0 0 0 0 0 0 0
AVERAGE NATIONAL STORAGE FY2016 NATIONAL STORAGE
FY2017 NATIONAL STORAGE ROLLING 12 MONTH AVERAGE OTA PRICE ROLLING 12 MONTH AVERAGE BEN PRICE
4000
$80
3500
$75
3000
$70
2500
$65
GWh
2000
$/MWh
$60
1500
$55
1000
$50
500 $45
0
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
$40
> TAUPO STORAGEAVERAGE SINCE 1999 FY2016 FY2017
600
500
400
GWh
300
200
100
0
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE04Mercury NZ Limited published this content on 24 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 24 January 2017 08:05:05 UTC.
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