The Mercury NZ Ltd (ASX: MCY) share price was up by more than 5% today after the 100% renewable energy generator and retailer released its governance presentation. The Mercury share price has since pulled back slightly to be up 2.62% at the time of writing.
Mercury, which is 51% owned by the New Zealand government, acquired fellow energy provider Tilt Renewables (ASX: TLT) this month, with the aim to subsequently acquire its $770 million gross operations annually.
Mercury share price and earnings strong
Mercury shares have returned more than 60% over the past 12 months, with a price-to-earnings ratio of 33 and earnings per share of 14.21. Over the past 12 months, the Mercury share price has gone from $3.66 to its current price of $5.88.
Mercury reported its earnings before interest, taxes, depreciation, amortisation and fair-value adjustments (EBITDAF) have increased by $36 million in half-year FY21 compared to the previous period, due to lifts in sales yields and trading gains. The company also reported its 13th year of ordinary dividend growth, increasing its interim dividend by 6.3%.
Mercury has managed to secure this growth despite a slightly falling generation due to a high-priced energy market, with sustained elevated wholesale prices across the industry.
The company says its slowly pivoting its focus away from retail customers towards the wholesale market due to these gains.
Flexibility focus in ASX renewable energy market
Mercury was formed in 1994 and currently operates nine hydroelectric generating stations on New Zealand's Waikato river and five geothermal plants in Taupo. It recently sold renewable energy infrastructure interests in California.
The company completed an executive restructure in February and Mercury CEO Vince Hawksworth was keen to let investors know the company is focused on continual innovation in a rapidly evolving industry.
"We are undertaking process and operational changes aimed at enhancing efficiency and effectiveness and are reviewing both our long-term asset management plans and our customer strategy to ensure they are fit and flexible enough for such a dynamic environment," Mr Hawksworth said.
"Guiding our evolution is our desire to balance the internationally recognised energy trilemma of ensuring that we achieve our sustainability goals, keep the lights on for New Zealanders and do this all at the least-cost for consumers."
Mercury's ASX gains today haven't been replicated on the New Zealand exchange, where it's down 1.2% today.
