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

 

R18: The Warehouse Group Praised For Removing Games

The decision by New Zealand’s largest retailer The Warehouse Group (TW Group), to withdraw stocks of the latest version of Grand Theft Auto V (GTA V) and other R18 games, has been praised by advocacy group Stop Demand Foundation. More>>

ALSO:

Air NZ Wine Awards: Victory For Villa Maria As Pinot Noir Thrills

It was a night to remember as Villa Maria Estate picked up one of the highest accolades of the evening, the O-I New Zealand Reserve Wine of the Show Trophy, at the 28th Air New Zealand Wine Awards. The Villa Maria Single Vineyard Southern Clays Marlborough ... More>>

ALSO:

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Commerce: Supermarket Inquiry Finds No Breaches By Countdown

The Commerce Commission inquiry into anti-competitive behaviour by Countdown supermarkets, alleged by former Labour Party MP Shane Jones, has found nothing to warrant prosecution, although it warns supermarkets to take care in the way they communicate... More>>

ALSO:

Crown Accounts: English Flags ‘Challenge’ To Budget Surplus

Finance Minister Bill English is warning next month’s half yearly fiscal and economic update from the Treasury may not forecast a budget surplus, saying that returning the government’s accounts to surplus in 2015 will be “a challenge”, given the decline in commodity prices and weak global inflation. More>>

ALSO:

March 2015: Netflix To Launch In Australia And New Zealand

World’s Leading Internet Television Network to Offer Original Series, Movies, Documentaries, Stand-Up Comedy Specials and TV Shows for Low Monthly Price More>>

ALSO:

Price Of Cheese (Is Up): Dairy Product Prices Fall To Five-Year Low

Dairy product prices fell in the latest GlobalDairyTrade auction to the lowest level in more than five years, led by declines in rennet casein and skim milk powder. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news