GNE - Genesis Energy

[xafalcon]

It's good they trying things. The sooner we ditch coal the better.
This bit in stuff article was a bit of a negative on the trial.

While the pellets contain a similar amount of energy to coal, Huntly had to use roughly 25% more wood to achieve the same amount of electricity generation.

I reckon gas would be a better transition fuel for nz and the electricity grid.
I read in the Uk they will eventually try to use hydrogen for heating their boilers instead of gas from around 2026.

That would be a good path for NZ if hydrogen could become commercially viable
Rather than ditch our gas infrastructure


I own some santos shares on asx. They seem to be selling plenty of gas going off their report today.

Existing gas infrastructure is not suitable for hydrogen.

[Shareguy]

A great result as expected. Increased dividend ...again.

Increased guidance

FY23 EBITDAF has been updated to around $515 million from around $500 million, subject to hydrological conditions, gas availability, and any material adverse events or unforeseeable circumstances

Genesis enjoyed strong customer growth, gaining 10,273 customers to reach a total of 481,285, an increase of 2.2%. Residential churn also declined by 1ppt to 12% from the same period in FY22.

The company delivered H1 EBITDAF of $298 million, an increase of 42% from $210 million in H1 FY22. The revaluation of long-term contracts has resulted in a Net Profit After Tax (NPAT) of $145 million, a 72% increase on the same period last year

[kiwi2007]

Interim Dividend of 8.8 cps, 100% imputed with a record date of 23 March 2023 will be paid on 6 April 2023.

Previous dividend imputation was 80%

[Perky]

Smart move by GNE to use the natural resource already in our backyard that already connects to Huntly ...I wonder if they had to ask the 51% owner if this was ok?


Chief financial officer James Spence said Genesis had, however, made what he described as a "difficult decision" to invest in new wells that will increase gas production from the Kupe gas field, offshore from Taranaki.

"We are acutely aware of the sensitivity of investing in the well at Kupe," he said.

"We do however, see that gas is an absolutely critical fuel, at least for the short term to medium term in providing thermal backup in an increasingly intermittent system. Others will have different views on that," he said.

Spence said Genesis believed the additional gas from Kupe would displace coal in the generation mix, meaning carbon emissions would be lower they would be without the investment.

[Shareguy]

Analyst reaction Jarden said it was a solid first half with a healthy upgrade. It set a target share price of $3.31 (shares were trading at $2.86 early Monday afternoon) and retained its 'overweight' rating. "Dam levels were 133% above average at the end of the half year, which bodes well for the start of 2H23E," it said.

"Key risks are regulation, less-than-optimal management of the exit of NZ Aluminium Smelters from New Zealand, an increasing carbon price outlook, and increased costs for thermal fuel."

[Basil]

Dividend up a "whopping" 1.1% when inflation is 7.2%.

[Shareguy]

Dividend up a "whopping" 1.1% when inflation is 7.2%.

Yes, but at least it's an increase and don't forget 100 percent imputed. Last divi only 80 percent. EPS was $0.138

[Onemootpoint]

Perhaps the reason why the market did not appear too excited today. Sentiment may change.

[Plata]

Dividend up a "whopping" 1.1% when inflation is 7.2%.

Don't be so glum! In gross terms the dividend is up ~7.1% by my calculations. Interesting they opted for 40% ownership on the new solar plant, and they seem keen to kick castle hill down the road a few more years. Pretty good result, cashflow really strong. I was initially thinking the cashflow was strong because they were turning coal into cash but it seems that they have maintained the coal inventory, haven't looked to deep into it yet though.

[Shareguy]

https://www.cnn.com/2023/02/27/energy/china-new-coal-plants-climate-report-intl-hnk

[Shareguy]

Craigs number one Gentailer

Record 1H23 result, full year FY23 guidance +3% to c.$515m
GNE delivered a record 1H23 EBITDA of $298m (CIPe $290m), +42% on the pcp and has declared an interim dividend of 8.8cps (8.7cps 1H22), fully imputed, payable on 6 Apr-23. FY23 EBITDA guidance has been upgraded +3% to $515m from $500m. The key driver of GNE's performance has been strong hydro inflows resulting in c.70% of its generation production coming from renewables (1H22, 46% RE) and less need for its high-cost thermal plant. GNE has been able to back its thermal plant away from a $50-70/MWh spot market resulting in lower portfolio fuel and emission costs. Retail customer numbers have grown over 1H23 (+2.5%) whilst netbacks increased across all fuels. Negative impact (c.-$11m of gross margin) has been incurred from a planned outage at Kupe, curtailing production volumes for the half in addition to an observable decline in the field. We update our forecasts for FY23 hydro generation and retail pricing, with our earnings uplift offset by the recent shift in RFR (4.7% vs 4.2%) to determine a Target Price of $3.38 (no change). GNE remains our preferred gentailer, on valuation grounds, Overweight

[Basil]

Don't be so glum! In gross terms the dividend is up ~7.1% by my calculations. Interesting they opted for 40% ownership on the new solar plant, and they seem keen to kick castle hill down the road a few more years. Pretty good result, cashflow really strong. I was initially thinking the cashflow was strong because they were turning coal into cash but it seems that they have maintained the coal inventory, haven't looked to deep into it yet though.

Good result no debate there and great its 100% imputed.
All I am saying is there's two ways to look at their dividend track record.
1. Impressively they've increased the dividend every year since they listed in 2014.  Sounds great at face value right?
2. Despite initially promising that their dividend policy was to increase it at a similar rate to inflation, every single year since they listed they have increased it at a rate lower than inflation so in real terms one's dividend has declined every single year.

[Shareguy]

Good result no debate there and great its 100% imputed.
All I am saying is there's two ways to look at their dividend track record.
1. Impressively they've increased the dividend every year since they listed in 2014.  Sounds great at face value right?
2. Despite initially promising that their dividend policy was to increase it at a similar rate to inflation, every single year since they listed they have increased it at a rate lower than inflation so in real terms one's dividend has declined every single year.

Good point. Did not realise they stated that. Not many companies on the NZX have such a good record of increased dividends as GNE.


Will be interesting to see if they get included in the S&P/NZX20 this week.  Should be some big funds buying in.

[Untamed]

Things change. Providing a company made this kind of "promise" in good faith, based on the global economic situation at the time, I am happy to give them a bit of slack if it becomes no longer doable down the track.

2. Despite initially promising that their dividend policy was to increase it at a similar rate to inflation, every single year since they listed they have increased it at a rate lower than inflation so in real terms one's dividend has declined every single year.

[Shareguy]

Provided GNE can deliver on FY23 expectations Craigs lift FY23 dividend from 17.9cps to 18.5cps (c.5% lift on FY22, 100% imputed, c.9% gross yield)