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Tilt lifts annual guidance on solid first-half result

Thursday 31st October 2019

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Tilt Renewables lifted its full-year earnings guidance after a solid first half that saw net profit rise 40 percent and revenue increase 7.1 percent from a year earlier.  

The Melbourne-based energy developer said earnings before interest, tax, depreciation, amortisation and fair value movements of financial instruments in the six months to Sep. 30 were A$71.4 million, up 6.7 percent from a year earlier. It now expects full-year ebitdaf to be A$127-132 million following the solid start to the year. It had previously signaled a range of A$122-129 million. 

Group revenue was A$103.4 million versus A$96.6 million a year earlier and net profit was A$11.9 million versus A$8.5 million after a “combination of healthy wind, full period contribution from Salt Creek and annual increases in power purchase agreement prices," it said. 

The result also reflected lower depreciation charges following a revaluation of the Australian assets in the prior year and some capitalisation of larger component replacement costs under the operations and maintenance contracts, it said.

The company, majority-owned by Infratil and Mercury NZ, said it would not pay an interim dividend “considering the near-term growth opportunities available to the company.” 

The dividend policy was updated to reflect the likelihood of the company continuing to hold cash to help fund growth opportunities. The policy now has a pay-out range of 0–50 percent of operating free cash flow after debt servicing.

Among other things, the 133-megawatt Waipipi Wind Farm investment was approved and financial close achieved for a project-finance debt package on Sept. 6, with equity contribution fully funded from internal cash.  

The construction of the 336 MW Dundonnell Wind Farm continued to progress, with the project on track for completion in the third quarter of the 2020 calendar year, it said. 

Total group production was 1,062 gigawatt-hours with the Australian assets performing well, reflecting a full half-year of production from Salt Creek, good wind conditions and higher reliability, including at the Snowtown 2 wind farm, it said. Production was down 0.7 percent on the year but 1.4 percent ahead of long-term expectations, it said.

Tilt said the decision to start construction at the Waipipi wind farm in New Zealand meant that, combined with the Dundonnell wind farm, the group now had 469 MW under construction for a total investment of more than A$900 million.

Once completed, both projects will bring total assets under management to more than 1,100 MW, nearly twice that at the time of demerger from Trustpower in October 2016.

Regarding the Snowtown 2 wind farm strategic review it said the process is ongoing and reiterated that while “market interest in the asset is high," the "review includes options other than sale.” It expects to update the market at the end of the calendar year.

The stock last traded at $2.84 and has lifted 37.5 percent so far this year. 


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