GNE - Genesis Energy

[Basil]

I am sure shareholders are thrilled to take a 20% reduction in dividend because they are helping to save the planet and at the same time investing in renewable generation to replace dirty and aging capacity. They get a 7.7% gross yield as their reward, (for as long as 100% imputation remains).

[LoungeLizard]

I am sure shareholders are thrilled to take a 20% reduction in dividend because they are helping to save the planet and at the same time investing in renewable generation to replace dirty and aging capacity. They get a 7.7% gross yield as their reward, (for as long as 100% imputation remains).

Heel boy, heel!

Most of the earnings and cost pressure come from the issues as stated - low hydro levels, Huntley being out of commission etc. GNE have already flagged that as they transition to renewables dividends were likely going to be under pressure. If you have bought into the plan to future proof the business then todays figures aren't a surprise or concerning.

Personally I see nothing wrong with a 7.7% gross yield in a transitionary period. By the looks of things the market - Institutions in particular - are not concerned either. SP is unchanged.

[Basil]

I presume the transition period you refer to is their FY35 plan, so 11 years of 20% dividend sacrifices, ouch !  Gosh that's quite some "transitionary period" as they "hope" to replace dirty aging assets with shiny new clean ones that they "hope" they can generate the same level of generation output and profitability from.
Just as well they said the reset dividend is going to match inflation going forward and you can hope this really is the case because...oh no...hang on a minute they have spun that B.S. before and never even ever made an honest attempt to match the rate of inflation in any year they have existed.  Surely a Govt majority owned company wouldn't lie to you again.  I guess you could hope they mean it this time when they say dividends will be increased in line with inflation going forward.  In the meantime you hope they can maintain 100% imputation credits and hope they don't have to do another dividend reset due to capex cost blowouts.  Just as well hope is a great basis upon which to invest eh mate     You'll have to forgive the old dog mate and his deep cynicism when it comes to this one...Beagles pet hate is when they promise him more dog food each year and then management and staff eat it themselves instead.   

[winner (n)]

What's up ...GNE share price down to 244 after being above 250 for some time

[kiwi2007]

7c fall at open but it's Divi day (7c Supp 1.235 Imp 2.722)

HALFYR: GNE: Genesis meets expectations in challenging environment

Guidance
FY24 EBITDAF is expected to be around $430 million subject to hydrological
conditions, gas availability, and any material adverse events or
unforeseeable circumstances.

As previously announced, Huntly Unit 5 has returned to service. The
financial impact of this event is estimated to be in the range of $20 million
to $25 million EBITDAF and is included in EBITDAF guidance.

Operating expenditure is expected to be around $380 million. Capital
expenditure in FY24 is expected to be around $145 million.

As stated at Investor Day on 30 November 2023, FY25 EBITDAF outlook remains
around $500 million. This is subject to hydrological conditions, gas
availability, and any material adverse events or unforeseeable circumstances.

[winner (n)]

GNE share price down ...down below 240

I thought that when expectations that rate cuts were coming soon the share price would be heading up ...not down

[Plata]

Hydro lake levels are trending downward, increases chance of tight supply later in the year. Genesis has not done that well in the recent past when this was the case. Now days they say that was because they didn't want to hold people to ransom with thermal prices, but now days they also say they are not being fairly compensated for their thermal backup. Guess we will see what happens this year. Probably also doesn't help that rates are more widely expected to be higher for longer these days. Don't forget dividend too.

[Plata]

Didn't think this would get this low, the other generators have held up alright. Anyone got any theories or is this just random price wander?

[kiwi2007]

Didn't think this would get this low, the other generators have held up alright. Anyone got any theories or is this just random price wander?

According to MorningStar

Hydro generation fell 24% in the fiscal year to date due to reduced rainfall, largely reverting to a normal year. This forces the firm to rely more heavily on its costly gas- and coal-fired power stations, with the total cost of generation rising 56%.

 Earnings are expected to improve on investment in renewable power generation and storage, cost-out initiatives, roll-off of unfavorable gas contracts and higher retail margins. Solid oil prices should also help.

[Bob50]

Quote from the business desk. 3 days ago.
———-
Forsyth Barr says ongoing problems at the Kupe gas field appear to be overly weighing on Genesis Energy's share price.Genesis reported on Monday that production at Kupe remained curtailed, with an ongoing drilling programme to lift gas extraction being delayed.
————-
Another dividend stock that has disappointed.

Again I hold and hope for improvements.

[Basil]

It'll be interesting to see if they honour their promise to keep the measly new much lower 14 cps annual dividends adjusted each year in line with inflation.  I seriously doubt it.  They never have honored their original promise in this regard since they listed so we should believe they will this time because of what ?  They have never even owned up to the last lot of lies about dividend inflation adjustments before. A leopard does not change its spots. Also, their ability to impute dividends and to what extent is about as clear as mud.  Highly likely to keep disappointing shareholders is how I see GNE.

[Bob50]

A few months ago I listened to the CEO of Genesis doing an interview on the Sharies podcast platform.
I recall being surprised how most of his discussion was about reducing carbon. All the green investment they were doing to meet NZ's targets. No mention of how this investment was to be funded or how it would effect dividends.

Plenty of gleeful talk about the need for Huntley to produce less and more as a back up. No talk about the cost of having their major asset sitting idle or at least producing less.

It felt more like listening to an interview with an environmentalist rather than a CEO of a company discussing how to maximise share owner's profits.

[Basil]

It's easy to forget that GNE is majority owned by the Govt so has to do their bidding on ESG matters whether it makes commercial sense or not.

The other thing is some leaders get to a certain age and then their focus shifts to all being about leaving a legacy.  I suggest there's a very real chance that's the case here.

[xafalcon]

A few months ago I listened to the CEO of Genesis doing an interview on the Sharies podcast platform.
I recall being surprised how most of his discussion was about reducing carbon. All the green investment they were doing to meet NZ's targets. No mention of how this investment was to be funded or how it would effect dividends.

Plenty of gleeful talk about the need for Huntley to produce less and more as a back up. No talk about the cost of having their major asset sitting idle or at least producing less.

It felt more like listening to an interview with an environmentalist rather than a CEO of a company discussing how to maximise share owner's profits.

It doesn't sound like you actually listened to the interview, or you wouldn't be making comments like this.....

"Green" funding = comes from Kupe income

Dividend effect = remove Kupe contribution

Huntly = has no "e", never has

Huntly idle cost = discuss with other generators and government to obtain "payment for availability of asset"

[Crackity]

Huntly = has no "e", never has

Quite a bit of "P" though