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

 

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news