Meridian Energy (MEL.NZ) kicked off a review of its Australian energy business on Tuesday and said it would consider a partial or full divestment, as the company faces margin pressure and weaker wholesale electricity prices in the country.
The New Zealand-based power company said the ownership review will likely take several months and no decision would be made for the Australian unit until then.
In the interim results for the six months ended Dec. 31, 2020 the company released in February, Meridian noted thinner margins and said the benefit of higher electricity and gas sales in Australia was offset by lower average prices, which reflected weaker electricity demand and gas oversupply.
The company’s Australian energy margin was NZ$59 million ($42.66 million) for the first half of fiscal 2021, about 9% lower than the previous year.
Meridian Energy Australia has about 294 megawatts of renewable generation capacity, with a retail business “Powershop Australia” that delivers electricity to 140,000 customers and gas to 40,000 customers.
($1 = 1.3831 New Zealand dollars)
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