The revitalised board of struggling electricity producer New Zealand Windfarms is exploring ways to pay a maiden interim dividend in the current financial year, the new chairman Rodger Kerr-Newell told shareholders at the annual meeting today.
The company reported a $3.9 million loss in the last financial year, partly because of lower wholesale electricity prices, although the company was now getting on top of the equipment failure and maintenance problems it had been experiencing with its two-bladed turbines, produced by Christchurch-based Windflow Technology and for which NZWF is the only customer of scale.
The Bank of New Zealand required the company hold $6.5 million in cash on hand relating to guarantees to network owner Powerco, with which NZWF has two lease agreements it has tried to restructure without success.
The company was "exploring alternative options" for providing the Powerco guarantee and "the directors are considering the possibility of declaring an interim dividend in the 2017 fiscal year".
Kerr-Newell he had been "disappointed on my board election as chairman in June this year to find no active process in place to move us from being a "price taker" with all that implies to shareholder value, to an entity which actively manages its revenue".
"Without performance targets and effective governance, we won't know where we are, where we are going and when we arrive. Be clear shareholders both these things will change," he said. "In the next four months, the directors will establish a strategic direction and will install a performance management system to ensure we are heading in the right direction. We must take control of our future. We must maximise shareholders value."
NZWF's shares have fallen 24 percent over the course of this year, although they rose 1.4 percent to 7.1 cents today.
The acting chief executive, Stuart Bauld, said the departure of the previous CEO Chris Sadler on Nov 23 after a sudden resignation had left him "completely unexpectedly" in the leadership role.
A director of the company, Bauld said it was "fair to say" that if the company was starting again, it would have been "unlikely" to use the Windflow 500 turbine.
However, "the farm was built using them, they do exist and they are our main asset. This means that our task is to operate them as efficiently as we can and optimise all other aspects of our business," he said.
Among the company's strategic challenges was overcoming its inability to generate consistent returns when wholesale power prices were low or the wind wasn't blowing. Full hydro lakes at present bode poorly for wholesale prices, so NZWF needed to consider ways to become more like a generator-retailer, smoothing its earnings through exposure to both wholesale and retail markets.
"We need to move from being wholesalers and price takers to accessing retail margins. Our task if you like, is to become part of the cartel," said Bauld, although at this stage he had no answer as to how that would be done and would be handing those problems to a new chief executive.