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NZ Windfarms posts smaller first-half loss in period of disappointing wind flows

Tuesday 28th February 2012

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NZ Windfarms, which operates 97 turbines in the Te Rere Hau wind farm, reported a smaller first-half loss as electricity sales jumped, making up for lower-than-average wind flows and one-time costs to defend Environment Court action taken by the local council.

The loss was $1.3 million in the six months ended Dec. 31, from a loss of $1.8 million a year earlier, the Christchurch-based company said in a statement. Sales rose to $3.8 million from $1.6 million.

Electricity sales amounted to $3.58 million, based on 56,883 MWh generated at an average price of $62.86/MWh.

The company incurred one-time expenses costs in the period of $322,000 to meet the costs of an Environment Court action brought by the Palmerston North City Council over whether it was meeting the noise conditions of its resource consent.

Last year Windfarms bought a stock of spare parts for its turbines and exercised an option to acquire TRH Services, the windfarm maintenance and operations unit of Windflow Technology, which faced “fundamental financial uncertainty”. Windfarms is the only major customer of Windflow.

The company forecast full-year earnings before depreciation, amortisation and tax of $4.43 million, from a loss of $3.4 million on the same basis a year earlier. Including depreciation, amortisation and tax, the full-year loss would be $430,000, it said.

The company has hired Goldman Sachs to conduct a strategic review of the business and expects the results in the second half of the financial year.

Shares of Windfarms fell 0.6 percent to 17 cents. They have fallen from as high as $1.22 in April 2007.

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