Genesis reports earnings slip, raises fullyear forecast

NEW PLYMOUTH: Genesis Energy has raised its fullyear earnings forecast citing ongoing gas outages, dry conditions and uncertainty about the availability of Contact Energy’s Taranaki Combined Cycle plant.

The company yesterday lifted its fullyear operating earnings forecast to $360 million$375 million, from the $350 million$370 million it was picking late last year. It reported $361 million of earnings before interest, tax, depreciation, amortisation and changes in financial instruments last year.

Genesis, the country’s biggest

retailer of gas and electricity, operates the country’s biggest fleet of gas and coalfired generation. It also runs three hydro schemes and a small wind farm and tends to benefit when conditions are dry.

Wholesale power prices have remained high for the past two months as North Island hydro storage has declined, gas deliveries from the Pohokura field have again been reduced during maintenance, and Contact has repeatedly extended an outage under

way at its TCC plant at Stratford.

Genesis chief executive Marc England said the impact of the fuel supply ‘‘shock’’ the country went through late last year would probably be felt through to winter.

The company will pay an 8.45c interim dividend on April 18, up from 8.3c a year ago.

Genesis shares rose 0.2% to $2.775, taking their gain for the past year to 18%.

Earlier yesterday, the company reported a 2% decline in firsthalf

operating earnings when an unusual combination of events late last year required greater coalburn at the firm’s dualfuel Rankine units at Huntly but also reduced its gasfired capability.

That, and reduced oil and gas production from the Kupe field it owns 46% of, offset gains from improved pricing and volumes in its retail business.

Group ebitdaf fell to $196 million for the six months through December, from the record $198 million reported a year ear

lier. Net profit jumped to $49 million, from $28 million, on fair value adjustments and reduced depreciation charges. Underlying profit rose 4% to $43 million.

Wholesale power prices surged in October and November as declining South Island hydro storage coincided with reduced gas supply from Pohokura and a fiveweek shutdown of the 400MW E3p gasfired plant Genesis operates at Huntly.

That combination lifted the

firm’s average generation price for the halfyear to $146/MWh — 52% higher than a year before — but production fell by 12%.

As a result, ebitdaf from the firm’s wholesale business fell to $104 million, from $106 million a year earlier. Trading earnings were boosted by $9 million, but that was more than offset by a $7 million impact from having to buy more coal, hedges and other spot gas supplies during the E3p shut. Losses on the firm’s marketmaking activities in the ASX

futures market were also $4 million higher than the year before.

Reduced production from Kupe, had ebitdaf from the firm’s oil and gas arm fall to $53 million from $56 million a year earlier.

In the customer business, electricity sales were 4.4% higher at 3139GWh. Average prices were also higher. Gas and lpg volumes improved, again boosted by sales to business and heavy industry.

That resulted in customer group ebitdaf climbing by $6 million to $62 million.

Mr England noted gross customer churn was down 4.8% and the number of customers taking multiple fuels was up 6.4%.