Genesis Energy first-half net profit tumbles

Thursday 17th February 2011

State-owned Genesis Energy's first half net profit tumbled to $17 million, compared to $64.5 million a year earlier.

The lower result was due to a range of factors including lower wholesale electricity margins, increased depreciation, depletion and amortisation charges related to the company's 31% interest in the Kupe oil and gas field, unfavourable fair value changes in derivatives, and higher borrowing expenses, Genesis said today.

Genesis' generation facilities include the thermal power station at Huntly, hydro schemes at Waikaremoana and Tongariro, and a wind farm in the Wairarapa.

As part of government policy, Meridian Energy's Tekapo A and B hydro stations are also being transferred to Genesis.

In the six months to the end of December, Genesis reported revenue of $948.6 million, down 1.3% from a year earlier.

Earnings before interest, tax, depreciation, amortisation, financial instruments and other gains and losses (ebitdaf) was $139.3 million, $4 million up from the year before.

That result benefited from lower operating costs and Kupe oil and gas field operations, Genesis said.

Chairwoman Dame Jenny Shipley said no final dividend was declared for the 2009/2010 financial year and no interim dividend for 2010/2011 due to the funding requirements for the proposed acquisition of the Tekapo A and B.

Generation in the six months was down 384 gigawatt (GWh) at 3535GWh, with thermal generation at 2415GWh down 14% and renewable generation volume at 1120GWh up 1%, Genesis said.

The average price received for generation in the latest six months was $61.20 per megawatt hour (MWh), compared to $50.52 per MWh for the same period in 2009.

Genesis met its six month customer acquisition targets in the South Island, despite fierce competition, and by December 31 had a total of 30,089 electricity and LPG customers in the South Island.

Total customer numbers were down 1% at 543,800, with gas customer numbers up 3% at 110,900, and LPG customers up by 2700 at 3400.

Dame Jenny said Genesis expected to meet full year financial targets in its statement of corporate intent, including net profit of about $40 million.

NZPA

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