Meridian Energy writes down its asset value after negotiating with Tiwai Point smelter

Meridian Energy has posted a 53 percent increase in underlying net profit after tax of $162.7 million, but has had to write down the total value of its assets by $476m after renegotiating the Tiwai Point aluminium smelter power deal.

The new deal, announced last week, gives the smelter cheaper power after majority owner Rio Tinto sought to renegotiate after a fall in global aluminium prices.

The writedown is the last piece of the puzzle as the Government seeks to partially privatise Meridian in a share float that is expected to see the country's largest power company by value list on the NZX later this year.

There are no details in the result of the float of up to 49 percent of the company, and no indication whether the total $252.4m in dividends for the last financial year will be repeated in future years.

Net profit after tax of $295.1m was 295.6 percent up on the previous year's $74.6m, but includes a one-off gain of $101m from Meridian's sale of its half share of the Macarthur wind farm development in Victoria, Australia.

Reflecting both the Macarthur sale and the smelter contract writedowns, total assets in the Meridian balance sheet are recorded at $6.77 billion at balance date 2013, compared with $7.96b a year earlier.

Meridian was last independently valued in 2011, at $6.5b, suggesting its value now may be around $6b and could yield around $3b in the partial float.

The result also includes a $17.9m writedown on the value of the North Bank hydro tunnel project, which Meridian has put on hold in the absence of demand growth in the New Zealand electricity market, and a further $5.7m writedown on the value of solar energy projects in the US, which it is quitting.