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Genesis Energy grows electricity and retail gas sales volume

30 January 2014

Additional commercial electricity and residential gas customers joining Genesis Energy resulted in improved electricity and gas sales for New Zealand’s leading energy retailer in the three months to the end of December 2013 (Q2).

Chief Executive Albert Brantley said the Company’s Q2 operational performance was influenced by an increasingly competitive retail electricity market and lower wholesale electricity prices. The Quarter also experienced year on year increases in electricity generation from the Company’s gas-fired Huntly Unit 5 as well as increased production volumes from the Kupe oil and gas field.

Electricity sales volumes were up 3% to 1,296 GWh in Q2 due to new commercial and industrial customers increasing Time of Use sales by 105% to 196 GWh. This offset a 5% decline in mass market sales volumes versus the same period last year. Total retail gas sales were also up in Q2 (up 30% to 1.2 PJ) reflecting the sharp increase in gas customers in the last 18 months on the back of the Company’s dual fuel promotion.

Q2 marked a step up in competition for retail customers with customer switching rates across the market increasing significantly and market share gains being made by retailers outside of the top four companies. At 31 December 2013 the Company had 534,597 electricity customers (26.8% market share), up 1% in the last twelve months, but down 1% in the last three months and 2% lower than the 543,774 customers at the end of June 2013. Gas customers of 115,603 (43.7% market share) and 10,739 LPG customers are up 4% and 28% on Q2 2013 respectively.

Wholesale electricity prices in Q2 were negatively impacted by warmer than average weather conditions (lowering consumer demand) and above average storage levels in hydro catchments.

This influenced Genesis Energy’s total generation in Q2 of 1,475 GWh which was down 5% compared to 1,560 GWh in Q2 2013. Thermal generation of 700 GWh was down 17% on last year due to an 86% decline in coal fired generation which in turn reflected a preference for generating from gas. This along with a weaker comparable period in Q2 2013 (due to a planned outage for its first six year maintenance) led to Huntly Unit 5’s generation of 484 GWh being up 26% on the prior year.

Production at the Kupe oil and gas field was up significantly year on year due to a planned outage in Q2 2013. The Company’s share of gas sales of 1.5PJ was up 34%, oil production of 114kbbl up 19% and LPG sales of 6.2kT 33% higher than last year.

Despite competitive pressures in the retail electricity and gas market, Genesis Energy continued to leverage its diverse and flexible generation assets across New Zealand in an effort to manage the volatility in the market.

ENDS

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