CEN- Contact Energy

[Shareguy]

Interesting results call.  Higher dividends on the cards.

Free cashflow for the year to June was 41.8c a share but could rise to 58-60c a share.

[Plata]

Would have thought it was pretty obvious FCF was going to increase given they did a capital raise not too long ago to build another geothermal plant. What in that result was unexpected to the upside? We all knew Rio was keen for a new deal, that CEN is way below their target debt band (hence building more capacity) and that new generation is coming online in next few years. Did I miss something or was the market expecting a poor result? Surprised at the price strength here... 8 bucks tomorrow?

[Hectorplains]

https://www.nzherald.co.nz/nz/free-power-offer-will-help-new-families/ZC464WB6X5CVXJS6LZZ63QBGE4/

Savvy piece of feel good marketing from Contact- three months of free power to Kiwi families expecting a baby from 01 February this year.

[Left Field]

Bit of a surprise here.... net loss n all!

https://www.nzx.com/announcements/406544

Net loss of $7m reported after recognising an onerous contract provision of $120m ($86m after tax) following a review of the estimated available capacity of the Ahuroa Gas Storage Facility (AGS). Excluding AGS, underlying net profit was $79m.

- Underling EBITDAF (pre-AGS provision) decreased by $76m to $246m as a result of lower wholesale prices, lower renewable and thermal generation, increased operating costs to deliver on strategic growth priorities and inflationary conditions.

[Hectorplains]

Bit of a surprise here.... net loss n all!

https://www.nzx.com/announcements/406544

Net loss of $7m reported after recognising an onerous contract provision of $120m ($86m after tax) following a review of the estimated available capacity of the Ahuroa Gas Storage Facility (AGS). Excluding AGS, underlying net profit was $79m.

- Underling EBITDAF (pre-AGS provision) decreased by $76m to $246m as a result of lower wholesale prices, lower renewable and thermal generation, increased operating costs to deliver on strategic growth priorities and inflationary conditions.

Net profit is not as important for Contact as Free Cash Flow.  They've had losses and profit swings before.  The FCF determines their ability to keep pumping out big dividends.  SP might dip on some retail alarm but it should recover quickly.  That all said, I'm still of the opinion that Genesis  and several others are better bets in this space.

[winner (n)]

No pay rise this time for those who rely on their dividend income

[Hectorplains]

Down 1.5% (12cps) on the morning trades.  CEN conference call was effective in spinning the positives.

[Onemootpoint]

The energy stocks have had a bit of love recently.
CEN reached a 52 week high Friday and matched it midday today. Slowly edging towards that 2 year high.

Will be interesting to see if the earnings report around 2 weeks from now will provide further support of the share price.

[Waltzing]

Is there a big pipe line of income in the future?

P/E is a bit high... havnt been following the energy sector in NZ for a while.  Never know what the next GOVT will do... Nationalise the grid? (just joking)..

RMA -  the complete stalling of development unless Local IWI allow it.. Contact energy say they will make it much harder to develop renewables.

https://www.buzzsprout.com/944017/13289771-national-mp-chris-bishop-on-the-rma-replacement-and-national-s-alternative

[Onemootpoint]

Contact Energy's Tauhara geothermal power station strikes problems
https://www.rnz.co.nz/news/business/502093/contact-energy-s-tauhara-geothermal-power-station-strikes-problems

Forbar downgraded CEN. Share price down over 5% the past 5 days.

https://www.nbr.co.nz/investment/forbar-downgrades-contact-on-geothermal-delay/?utm_source=ActiveCampaign&utm_medium=email&utm_content=NBR+HEADS+UP%3A+Jeremy+Moon+s+2nd+startup+about+to+hit+US+premium+petfood+market&utm_campaign=NBR+Newsletter%3A+2023-11-14+09%3A14%3A32

[winner (n)]

This should boost shareprice

Things going well and increased divies

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CEN/434092/422252.pdf

[Basil]

Great they're doing so well but on the other side of the coin...oh dear...it's really tough for some people.
https://www.nzherald.co.nz/nz/four-months-with-no-electricity-new-zealand-families-rationing-and-living-without-power-to-eat/JDNUEU3FCBFALNVSAJ47VOVEYY/

[BlackPeter]

Great they're doing so well but on the other side of the coin...oh dear...it's really tough for some people.
https://www.nzherald.co.nz/nz/four-months-with-no-electricity-new-zealand-families-rationing-and-living-without-power-to-eat/JDNUEU3FCBFALNVSAJ47VOVEYY/

Oh dear, what happened?

No matter how good the news, you spread misery all over the place ...
Do we need a thread "the beagles misery"?

Seriously - I hope you are ok?

[Basil]

Just providing a link to another perspective on life for many families.  Nothing more to it than that.
The economy is a bit of a long hard grind, but it is what it is.  I take vitamin D tablets for SAD, (seasonal affective disorder) and walk the dog most days, highly recommend both those things.  Taking the boat out for a spin tomorrow. I'm fine, thanks for asking.
P.S. For what it's worth, (I don't hold), I thought the announcement by CEN was a good one with rising sustainable dividends in the years ahead.  After Adiran Orr's more dovish tone today its clear interest rates are headed down in the not too distant future so the extent of the share price drop in CEN, with a further meaningful drop today is quite surprising.  I suppose it's a buy the rumour sell the fact type situation ?

[Crackity]

AFR tonight reporting $500 mill cap raise incoming.

How come NZ outlets don't get Sunday night scoops eh