Mercury Energy said dry weather had led it to revise down its operating earnings forecast for the current financial year.
The North Island-based power generator and retailer said it now expected its ebitdaf to come in at $505 million for the 2021 financial year, down from an earlier guidance of $515m.
"This reflects an expected 200 gigawatt hour (GWgh) decrease in full-year hydro generation to 3700 GWh due to dry weather conditions in the Taupo catchment in full-year 2021 to date," it said in a statement.
READ MORE:
• Drought drives Mercury Energy profit down, but not dividend
• Premium - Mercury ploughs ahead with $464m wind farm project despite uncertainty over Tiwai
• Genesis Energy profit falls on lower hydro power generation
• Fletcher Building shares rally after retaining MSCI position
Chair Prue Flacks said in speech notes to today's annual meeting that Mercury was well placed for the future.
"In our view the market outlook will be impacted by headwinds–demand growth constrained by economic activity, the exit of Tiwai and potential for further de-industrialisation leading to market uncertainty and volatility," she said
"Mercury is well-placed in these circumstances, your company produces 100 per cent renewable generation and the assets are entirely North Island-based, close to major customer demand centres and largely unconstrained by the transmission system," she said.
In its last financial result, Mercury eked out an increased final dividend and predicted another increase in the payout for 2021.
Operating earnings of $494m in the June 2020 year were down $12m on the previous corresponding period, but Mercury reported a 15.8cps dividend for the year, up 2 per cent on 2019.
At its last result, Mercury forecast a 17 cps dividend for the current year, despite uncertainty surrounding the future of the Tiwai Point aluminium smelter.
Shares in Mercury last traded at $4.78, having dropped by 4.8 per cent over the last 12 months.