Genesis Energy has improved its full-year profit, supported by the revaluation of derivative contracts, and the company avoided a repeat of one-off costs that dented the previous year's result.
Photo: GENESIS ENERGY
Key numbers for the year ended 30 June compared to a year ago:
- Net profit $221.9m vs $33.5m
- Operating earnings $440 m vs $358m
- Revenue $2.8b vs $3.22b
- Full year dividend 17.6cps vs 17.4cps
The energy generator and retailer's operating earnings increased 24 percent, but revenue fell 12 percent, as wholesale electricity sales fell.
Genesis also faced rising operating expenditure as staff costs increased and due to the continuation of its digital transformation programme.
Genesis Energy chief executive Marc England said the company demonstrated its role in delivering energy security for New Zealand, as supply chain issues and the war in Ukraine created energy crises elsewhere.
"Our fixed price gas supply contracts and coal purchased well in advance of global supply issues have cushioned New Zealand's electricity system from price shocks seen elsewhere in the world. More recent rainfall has also added to a healthy level of hydro energy for the rest of 2022," he said.
Genesis forecast operating earnings to be $455 million in 2023, depending on hydrological conditions, gas availability and barring any unforeseen circumstances.
It said current "swaption" contracts will end in December 2022, and depending on the outcome of negotiations and market conditions in the second half, there was a potential for more variability in the current year's results.
Capital expenditure guidance for 2023 is about $80m.
The company also remained on target to meet its 'Science Based Target' of sustainably reducing 1.2 million tonnes of annual carbon by 2025.
England said as New Zealand transitioned to a higher level of renewable electricity, thermal back up would remain essential to maintain security of supply.
"Our forecasts show New Zealand's electricity generation will be 96-98 percent renewable by 2030, but there will still be times when it doesn't rain, the wind doesn't blow, and the sun doesn't shine.
"Huntly can continue to provide security to the renewable electricity system day to day for the country's energy consumers to decarbonise over the long term," he said.