Genesis Energy Limited (NS) Analysis

Overview

Genesis Energy is a New Zealand-owned energy company that fosters strong links with its customers and community stakeholders.

Formed in April 1999, Genesis Energy is a state-owned enterprise with a diverse electricity generation portfolio. 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.

Our aim is to operate as a commercially-focused sustainable company providing responsible energy solutions to our customers. This underpins the way we operate and do business, how we interact with our customers and stakeholders, and can be seen in our efforts to reduce our impact on the environment.

On the 17th April 2014, Genesis Energy Limited Listed on the NZSX with ordinary shares "GNE".

GNE has been granted Listing with a 'Non-Standard' ("NS") designation. This designation was granted because of provisions in GNE's constitution regulating the ownership and transfer of its Ordinary Shares due to the Crown's shareholding. For further information, please see a copy of the waiver under Documents on GNE's homepage on nzx.com.

Performance

The following information was extracted from Genesis Energy Limited's full year results, released on 22 August 2024:

Genesis Energy delivered FY24 EBITDAF of $407.2m with Net Profit after Tax (NPAT) of $131.1m in a challenging operating environment. The financial result was impacted significantly by gas supply constraints, low hydro and wind levels and a seven-month unplanned outage of Huntly Unit 5. Fuel costs were $169.5 million higher, while 99.9% of Genesis customers were not impacted by the higher wholesale prices.

During the period, good progress was made in delivering on Gen35 strategy. The first stage of a new lower-cost retail operating model was implemented, a final investment decision was made on installing 100 MW/200 MWh of battery storage at Huntly Power Station, a new site for a 127 MWp solar farm was confirmed, and negotiations are ongoing in securing a local and sustainable supply chain of biomass.

The operating conditions for FY24 were in direct contrast to the prior comparable period where near historic high hydro levels drove a record financial performance.

The company declared a final dividend of 7.0 cps. This takes the annual declared dividend to 14.0 cps.

Chief Executive Malcolm Johns said Gen35 is focused on driving earnings growth from new investments by FY27.

“In FY24 we met our challenges head on, demonstrated the resilience of the generation portfolio, shaped the business for the future and set up the 8 by ‘28 framework to deliver Horizon 2 of Gen35. These are our eight key deliverables for growth over the next four years,” Johns said.

“Battery storage and biomass were advanced as we evolve Huntly Power Station to provide 1,400 MW of energy security for a high renewables grid, with 500 MW by FY28. In our solar programme, we are pleased to have secured another large solar site, we continue due diligence on other locations and Lauriston solar farm in Canterbury is on track for first generation toward the end of this calendar year.

“These show Genesis is delivering new renewables and energy security at scale.”