Thursday 25th February 2021
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NZ Windfarms Limited’s has met expectations for the half year and affirms guidance for the full year. Financial performance has been solid for the half year with EBITDAF of $3.2m (HY20 $5.0m) but down on the record set in the prior period.
The net electricity price received including the effect of realised hedging was $83.09 MWh. Again this was down on the record set during the prior period $103.50 MWh. Half year electricity generation was 64.9 GWh’s down on the prior period 67.7GWh’s but ahead of budgeted generation for the period.
The half year revenue (including realised hedges), half year net electricity price, and half hear EBITDAF, are the second highest in the Company’s operating history. The half year performance continues to reflect effective cost control, capital management and electricity price hedging through the company’s variable volume fixed price agreement (VVFPA). Management also successfully worked through the COVID-19 lockdowns and were beneficiaries of above average generation conditions.
During the period the company successfully completed its second VVFPA. The VVFPA is for 100% of the company’s production from 1 January 2021 to 31 December 2021. Terms for the agreement were agreed 19 October 2020, and commercial terms and documentation was executed 1 December 2020. As with the previous VVFPA this provides improved certainty around future revenue.
Our second half has begun on budget and broadly within expectation. Our VVFPA means that future revenue becomes more predictable, and we will continue to work on continuous improvement across our operations to improve efficiency and maintain margins.
With the completion of the company’s second VVFPA, the company is advancing its strategy of becoming a reliable and transparent yield generator for our shareholders and other stakeholders and we are investigating repowering options that could occur before the end of the decade.
Recent announcements about the medium-term future of Tiwai point is pleasing as it firms medium term aggregate electricity demand, it enables industry to construct transmission infrastructure north and it allows stakeholders to consider viable alternatives for the Tiwai site and any surplus renewable electricity. We also recognise recent Government renewable energy policy commitments and endorse those.
We note that the ASX forward electricity price curve has lifted significantly and firmed across tenures. NWF is currently unhedged beyond 31 December 2021.
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