Banks, energy companies post huge profits as households struggle

Banks and energy companies are seeing huge profits as inflation bites and household bills soar.

In recent weeks, energy companies Meridian, Mercury and Genesis have shown a combined increase in net profit of $ 1.3 billion.

Meridian is up 55%, Mercury 42% and Genesis is up from a $ 31 million profit to $ 221 million, a near 600% increase.

In banking, Kiwibank announced a profit of $ 131 million, up 4% on the previous financial year, while ASB is up 11%.

Experts believe the profits stem from the global financial climate that has seen oil prices rise and materials be in short supply.

“Banks, energy companies driven by global changes in interest rates and energy companies probably impacted by the global theme relating to decarbonisation,” New Zealand Shareholders Association’s Oliver Mander told 1News.

Craig Renny of the New Zealand Council of Trade Unions said: “Profits are well in excess of what we’ve seen in the past, for many of them they are not associated with investments but windfall gains from extra oil prices, or shortage of materials or supply chain restraints. ”

“When companies are doing really well they need to make sure their workers are doing really well, energy companies in particular need to maintain their social license with their customers, making sure the customers that are doing it tough, have ways to pay.”

But not all companies are faring so well.

On Thursday, Air New Zealand, hit by rising fuel and labor costs, more than doubled its loss on the previous year, going from a $ 292 million loss in 2021 to $ 591 million this year.

In a statement, the national carrier said they had experienced “greater than expected” demand for travel in the last quarter, but the airline’s operating revenue was “significantly impacted by pandemic related travel restrictions”.

“Cargo and domestic revenues helped lift overall revenue by 9%, however high fuel prices and reduced flying over much of the year resulted in a loss for the period.”

Expenses grew from $ 2.18 billion to $ 2.738 billion.

SkyCity also recorded at $ 33 million loss. The company say their results “have been significantly impacted by the disruptions caused by Covid-19”, and “dividends will not be paid due to debt covenant waiver restrictions”.

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