October 14 - ** New Zealand's Mercury (MCY.NZ) shares once fell 1.3% to 6.69 New Zealand dollars, before narrowing losses to trade down 0.6% later in the Wellington afternoon session
** The power retailer (link) reported a 19% year-on-year rise in first-quarter operating margin, as new wind and geothermal output offset lower hydro output caused by drought
** Morningstar noted that the record drought quarter led to a 24% decrease in hydro output (that is, 332 GWh), but total electricity production was down only 1%
** The investment research firm added that, although derivative gains boosted results, underlying performance remained robust, highlighting the value of a diversified generation asset portfolio
** Reservoir water storage was around 25% below average, and the likely El Niño-driven rainfall reduction is expected to adversely affect hydro output for the 2027 fiscal year
** "We basically maintain our original forecast," and keep the fair value estimate at 6.8 New Zealand dollars — Morningstar
** Shares are up 4% year-to-date
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