GNE - Genesis Energy

[entrep]

Good catch, that meaningfully closes the gap. Revised share counts:

Post-raise: ~1,300m
DRP issuance ~20m/year × 6.5 years: ~130m
FY32 total: ~1,430m

Revised per-share EBITDAF:

FY25 (pre-raise): $470m / 1,107m = ~42.5 cps
FY26: ~$505m / ~1,320m = ~38.3 cps
FY28: ~$550m / ~1,360m = ~40.4 cps
FY32: ~$700m / ~1,430m = ~49.0 cps

You're looking at roughly six years to get from 42.5 cps to 49 cps on a per-share EBITDAF basis. That's only about 2.4% per annum growth, not 6%.

The headline EBITDAF chart showing $470m to $700m looks great, but a huge chunk of that growth is being absorbed by the equity raise and ongoing DRP dilution. The per-share story is considerably less exciting.

That said, the dividend should still be fully imputed and the board has flagged moving to a more market-aligned (presumably growing) policy post-FY28. But the critique that this is substantially a stand-still on a per-share basis for several years has real validity.

You have to allow new shares issued under DRP - nearly 20,000 last year

that's another 130,000 plus shares through to F32 (6.5 years)

[Plata]

I will participate in the raise because:

Reduces prominence of thermal assets potentially increasing earnings multiple even if EBIDAF/share stays static
At 20.1 cps gross dividend p/a, placement price $2.15, gross yield = 9.3%
At rights issue price $2.05, gross yield  = 9.8%

Dividend seems pretty secure, I think in the volatile environment we are in the risk/reward here is reasonably compelling.

[Plata]

It is kind of tragic in some ways though that they didn't just rebase the dividend to a lower level a few years back. Imagine if all this development had been done on retained earnings, debt and DRP. Too many NZX companies are too beholden to dividend hunters, to the detriment of all.

[xafalcon]

It is kind of tragic in some ways though that they didn't just rebase the dividend to a lower level a few years back. Imagine if all this development had been done on retained earnings, debt and DRP. Too many NZX companies are too beholden to dividend hunters, to the detriment of all.

The gentailers would have been crazy to commit a penny of capital while NZAS were playing their "we're leaving" games. If NZAS closed down operations, the market would have been 25% oversupplied with the generators existing plant

Once the 20 year contract was signed, the new generation plants were committed. As any sensible business would do. It just takes some time for the new plants to be constructed

[winner (n)]

In FY24 and FY25 plus H126 Genesis have paid $400m in dividends (5 of them)

How much the capital raise - $400m

Surely not getting shareholders to fund dividends ...hmmm

Must be hard juggling the purse strings at Genesis (and other power companies)

[entrep]

Retail only getting 8% of what asked for.

[Basil]

Wow, glad I didn't bother.

[Otago K]

Retail only getting 8% of what asked for.

Yep, I've picked up a few hundred, via Invest Direct 7.65% of my applications, commissions aren't the full standard $29.90 thankfully. Think I'll end up consolidating into one holder entity rather multiple holders.

Question to BUY today on market for dividend, or think there's a day or two to get some more shares before they go ex the rights entitlement.

[Left Field]

With all the power companies tabling results this week, I wondered how the market compared their relative SP performances over the last 5 yrs.....

(I'll leave it to you to add in the dividend yields.)

ps I was tempted to add IFT into the comparison but maybe a bit unfair.

[Dolcile]

Wow, interesting chart - thanks!

[xafalcon]

With all the power companies tabling results this week, I wondered how the market compared their relative SP performances over the last 5 yrs.....

(I'll leave it to you to add in the dividend yields.)

ps I was tempted to add IFT into the comparison but maybe a bit unfair.

It really depends on when an investors entry point was (or their weighted average SP). For example, if an investor bought in mid-2024, the result would be quite different - GNE with a solid increase, CEN about flat, MEL & MCY showing a reasonable decrease

But no doubting the fact that GNE has underperformed on SP, especially following their exit from index funds (mid 2023 from memory) where sustained share transaction volumes were the highest in their history

[lorraina]

Rights Offer
Record date 7.00pm NZDT, Monday, 2 March 2026
Rights Offer opens Wednesday, 4 March 2026
Rights Offer closes Tuesday, 17 March 2026
Shortfall Bookbuild for Rights Offer Friday, 20 March 2026
Settlement on the ASX Tuesday, 24 March 2026
Settlement on the NZX Wednesday, 25 March 2026
New Rights Offer shares allotted and
commence trading on NZX and ASX Wednesday, 25 March 2026
Payment of any premium achieved in the
Bookbuild Tuesday, 31 March 2026

[HAWKDOG]

I'm looking at buying some shares,  tired of having the bill constantly being raised.  Collecting some dividends may ease the pain.
The change in the lower user rates is upping my bills a fair amount.

[Basil]

I think this could drift down very close to the offer price of $2.05 and I think its a BUY at very close to that level.

[Plata]

Barring political risk I fail to see how you can go too wrong below $2.30 and at $2.15 and below it seems like really compelling value for a defensive utility like this. Over 8% gross yield already and with good scope for increases once they put capital raise money to work, even now I doubt payout ratio is close to 100% so some scope for that to push higher once they are done building. I'm calling low $2.10s as the bottom and if it goes below that I'll probably take a maximum portfolio weighting here.