Why the Meridian Energy (ASX:MEZ) share price is sliding

The Meridian Energy share price is sliding in morning trade. We take a look at the ASX energy share's latest report.

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The Meridian Energy Ltd (ASX: MEZ) share price is sliding in morning trade, down 1.4%.

Below we take a look at how New Zealand's largest sustainable electricity generator fared in April.

ASX renewable energy shares represented by wind turbines on a hillside

Image source: Getty Images

What did Meridian report for April?

Meridian Energy's share price is moving lower even though the company reported a 15.4% increase in national electricity demand compared to April 2020, when New Zealand was under strict COVID lockdowns.

Meridian, which relies heavily on hydropower, also revealed that in the month to 14 May, the somewhat depleted national hydro storage increased from 59% to 67% of its historical average.

But not all parts of its New Zealand operations gained. While hydro storage on South Island ramped up to 71% of the historical average, North Island saw water levels fall, with hydro storage sinking to 35% of the average by 14 May 2021. The company said that April was warmer and drier than average across much of the nation.

Reflecting the reopening of the country following largely successful virus suppression, Meridian reported that its April New Zealand retail sales volumes increased 36.9% year-on-year.

Breaking that down into segments, sales to small and medium-sized business (SMBs) leapt 91.7%, while large business sales increased 12.8% and corporate was up 39.9%. Agricultural sales grew strongly too, up 63.5%.

With more people returning to the office or simply out and about outside their homes, Meridian's residential sales segment decreased 2.3% compared to April 2020.

Both its energy supply costs and the price it received for power generation climbed steeply year-on-year. Meridian reported an 87.9% increase in the price it received while its costs to supply customers shot up 88.8%.

Power generation in Australia also increased, up 23.1% from April 2020. Meridian said that came from lower levels of wind generation and more hydro generation.

Meridian Energy share price snapshot

The Meridian Energy share price remains up 11% over the past full year, trailing the 29% gains posted by the S&P/ASX 200 Index (ASX: XJO).

2021 hasn't been as kind to shareholders.

After hitting an all-time closing high of $8.64 on 8 January, shares have fallen hard as some major institutional holders sold their stakes and retail investors digested the company's performance. That's seen the Meridian Energy share price fall 30% year-to-date, and sink 43% since 8 January.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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