Genesis has strongest first half in seven years

Genesis Energy has delivered $217 million EBITDAF for the first half of FY21, a 30% increase on the same period last year and its strongest first half performance since listing in 2014.

Net profit increased to $53m driven by stronger performance across the wholesale, Kupe and retail segments, boosted by lower thermal fuel costs, fewer planned outages and stronger margins respectively.

Genesis says net debt is down 5.5% to $1182m and free cash flow is up 69% to $159m with an interim dividend of 8.60cps declared.

Its Dividend Reinvestment Plan has been suspended until further notice.

“Our retail business has delivered improved efficiencies without compromising on our vision to be ‘customer’s first choice for energy management’,” Genesis Energy chief executive Marc England says.

“Our Energy IQ app now has 229,000 subscribers and, in 1H FY21, we launched advanced gas metering and new Energy Plus plans, which have already given 183,000 customers access to more customised payment options. The last six months has also seen a reduction in disconnections and bad debt, largely due to measures implemented by the business as part of its response to the customer impact of COVID-19.”

Huntly Power Station was again called upon to support the market in anticipation of a La Nina dry year, however, the high fuel costs that impacted the bottom line this time last year have moderated, England says.

The Waipipi Wind Farm entering the market in November has produced 54GWh of 100% renewable, zero emissions electricity as at January 31, 2021. It is due to reach its full 133MW capacity in March 2021, displacing 250,000-370,000 tonnes of carbon emissions annually.

Genesis completed a significant capital investment project at the Tekapo B Power Station during the half which improved generation efficiency at the station by 2.5%. In addition, the $26.5m seismic intake gate project was also completed, following a two-year programme of construction, enabling the Tekapo Power Scheme to operate back at full capacity.

Genesis’ Future-gen strategy aims to economically displace baseload thermal electricity generation with 2650GWh of reliable and affordable renewable electricity to support the country’s transition to a low carbon future.

The first phase of this strategy is complete as the Waipipi Wind Farm reaches 100% generation capacity next month. The second phase aims to bring a further 1350GWh of renewable electricity to market by 2024.

Genesis has also committed to removing at least 1.2 million tonnes of annual carbon emissions over the next five years to help keep global warming below 1.5°C by 2025.

EBITDAF guidance for the full year ended June 30, 2021 has been revised up from previous guidance of $395m-$415m to $415m-$425m, subject to market conditions. Capital expenditure guidance for FY21 is unchanged at up to $95m.

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