Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Genesis 1H earnings slide 23% on weak demand, prices

Genesis 1H earnings slide 23 percent on weak demand, low wholesale prices

Feb. 12 (BusinessDesk) - Genesis Energy, the state-owned power company slated for partial privatisation this year, reported a 23 percent drop in first-half operating earnings, reflecting stiff retail competition and a warm winter, which meant hydro-storage was above average wholesale prices were lower.

But the company still increased its interim dividend as the sale of up to 49 percent of the government’s shareholding in the country’s largest power company by customer numbers looms in the early part of this year.

Earnings before interest, tax, depreciation, amortisation and fair value changes in financial instruments fell to $150.5 million in the six months ended Dec. 31 from $195.9 million a year earlier, the Auckland-based company said in a statement.

Net profit, which includes movements in the value of financial instruments and is not a good indicator of underlying performance, slumped 72 percent to $19.7 million, while revenue fell 6 percent to $973.1 million.

The interim dividend payment to the government will rise to $64 million from $57 million a year earlier.

“The company has held its market share in electricity and gas retailing, despite intense competition, particularly from smaller retailers, and has grown customer accounts by two per cent,” chair Jenny Shipley said. “When the ‘one-off’ costs over the first half year are taken into account, the board believes that the company is responding well to the commercial challenges it faces and is confident in its ability to pay an interim dividend of $64 million.”

The Genesis part-sale is expected to raise between $700 million and $1 billion. The partial privatisation programme has had mixed success after an Opposition proposal to overhaul the electricity market saw traders discount the value of the power companies, accompanied by growing recognition that New Zealand has excess generation capacity that may last some years, keeping a lid on prices.

Genesis incurred a $2.4 million charge in preparing the company for its listing this year.

Customer numbers rose 1 percent to 534,597 in the half, giving it about 27 percent of the market, while gas customers rose 4 percent to 115,613, or 44 percent of the market. LPG customers rose 28 percent to 10,739.

The average retail electricity purchase price dropped 19 percent to $53.98 per megawatt hour due to the weaker wholesale market, and the average price received for generation declined 16 percent to $54.55MWh with lower retail demand and increased storage in hydro-lakes as a result of the mild winter.

Genesis’s thermal generation dropped 17 percent to 1,875 gigawatt hours, with coal generation down 61 percent as the company winds back use of the ageing Huntly power station, which can also run on natural gas. The company recently restructured contracts for coal for Huntly, ending imports from Indonesia.

Renewable generation was down 3 percent to 1,468 GWh, and total generation fell 12 percent to 3,344 GWh.

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Business Research And Development Up 29 Percent

Computer services and machinery manufacturing firms led the way in an almost 30 percent lift in business spending on research and development (R&D) in 2016, Stats NZ said today. Businesses spent $1.6 billion on R&D in 2016, up $356 million (29 percent) from 2014. More>>

ALSO:

China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news