Genesis Energy chief executive Malcolm Johns .
Photo: Supplied / Brett Phibbs / PhibbsVisuals
Brimming hydro lakes and less utilize of coal and gas have powered Genesis Energy to a strong lift in half year profit, as it shiftd to raise $400m to finance new generation projects.
Key numbers for the half-year concludeed 31st December compared with a year ago:
- Net profit $95m vs $70m
- EBITDAF $303m vs $217m*
- Company to raise $400m in share sale, government to participate
- Interim dividconclude 7.3 cents per share vs 7.13 cps
*Earnings before interest, tax, depreciation, amortisation, fair value instruments – a measure of operating earnings.
Chief Executive Malcolm Johns stated increased hydro-generation across the countest allowed Genesis to acquire cheaper electricity on the wholesale market, divert gas towards industrial customers, and reduce expensive coal and gas-fired generation at Huntly.
That resulted in the company posting record operating earnings.
“Among the factors influencing the result were improvements in how we trade our portfolio, improved fuels management systems and the
improved positioning of our customer books.”
“At the same time, we progressed our renewable generation pipeline for self-sufficiency in the future.”
The company stated it would raise $400 million in a sale of new shares, with $100m to new investors and a $300m renounceable rights offer for existing shareholders.
The government confirmed it would invest up to $198m to maintain its 51 percent stake.
“Genesis’ proposed investments will directly contribute to enhancing energy security, including through enabling Genesis to bring more flexible capacity to the market which can be utilized to address dry-year risk,” Finance Minister Nicola Willis stated.
Johns stated the capital injection would speed up investment in renewable generation and “firming” capacity such as batteries and flexible thermal backup, reducing reliance on fossil fuels.
“We can execute this plan in a five to six-year window, without that funding, we’re viewing at 10 to 15 years,” he stated.
“Acceleration of opportunities that meet Genesis’ capital allocation framework are expected to both enhance value for Genesis’ customers as well as shareholders by bringing forward earnings growth and strengthen Genesis’ ability to support New Zealand’s energy security.
Genesis’ maintained its full year earnings forecast between $490m-$520m.
Johns stated wholesale power prices were expected to normalise as hydro conditions eased, meaning Genesis would likely run more gas-fired generation in the second half of the year.
Leave a Reply