Genesis Energy

Genesis Energy Limited is an energy company which sells electricity, reticulated natural gas and liquid petroleum gas (LPG) through its retail brands of Genesis Energy and Energy Online. It generates electricity from a portfolio of thermal and renewable generation assets located in different parts of the country. It operates in four segments: Customer experience, Energy management, Oil and gas, and Corporate. The Customer experience segment includes supply of energy (electricity, gas and LPG), as well as related services. The Energy management segment includes generation and trading of electricity and related products, and electricity sales to the wholesale electricity market, derivatives entered into to fix the price of electricity, and wholesale gas and coal sales. The Oil and gas segment includes exploration, development, production and sale of gas, LPG and light oil. The Company also has 31% interest in the Kupe Joint Venture that owns the Kupe Oil and Gas Field.

Genesis Energy supplies 19 per cent of New Zealand's electricity from its thermal and renewable power stations. It is also a significant energy retailer supplying electricity, natural gas and LPG to more than 658,100 customers across the country. On the 17th April 2014, Genesis Energy Limited listed on the NZSX for an initial public offer price of $1.55.

Genesis Energy reported a 113 percent increase in net profit of $104.8 million on marginally increased revenues of $2.1 billion in the year to June 30, 2015. Total electricity, gas and LPG customers slipped 2 percent to 636,676.

Earnings before interest, tax, depreciation, amortisation and movements in the fair value of financial instruments, often seen as a preferred measure for underlying performance, rose 12 percent to $307.8 million.

Falling global oil prices saw returns from Genesis's 31 percent interest in the Kupe oil and gas field fall, with the oil and gas segment of operations showing a 13 percent drop in EBITDAF to $93.5 million, with Kupe contributing 27 percent of EBITDAF in the latest year, compared with 35 percent the previous year.

Improved cost to serve ratios saw the 'customer experience' segment improve EBITDAF earnings by $4.7 million to $87.2 million, while the energy management segment, which measures the company's wholesale electricity generation operations, showed a $32.2 million improvement, up 19 percent on the previous year, at $201.1 million. Contributors to that result were a 4 percent increase in total electricity generated to 6,698 Gigawatt hours, and a 7 percent improvement in the average price received for wholesale electricity, at $75.41 per Megawatt hour.

Genesis used 31 percent more coal and 5 percent less gas on electricity production during the year.  The company confirmed the two remaining 250MW gas and coal-fired units at its Huntly power station site would close in 2018, barring a major change in market conditions.

Genesis has been running down coal stockpiles at Huntly in anticipation of the closure and cancelled its coal contract with Solid Energy, using the state-owned coal miner's financial distress as a trigger to quit existing contracts early.

The company will pay an 8 cents per share final dividend, an increase from last year's 6.6 cents, taking total distributions in the current financial year to 16 cents, compared with 13 cents in the previous financial year. That equates to 80.9 percent of free cash flow, compared with 80.4 percent the previous year.  Free cash flow at $197.7 million was 22 per cent higher than the previous year.Genesis Energy said it has seen growth in electricity sales in the first three months of the new financial year after New Zealand's biggest electricity and gas retailer halted a slide in customers in the face of "aggressive" competition.

The company affirmed its guidance for earnings growth to stall in 2016. Earnings before interest, tax, depreciation, amortisation and changes to financial instruments would be in line with last year's $345 million, although the company expects to lift its total dividends for the year.  

To view the FULL REPORT on Genesis Energy please visit IRG ONLINE LIBRARY at shop.sharechat.co.nz

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