Chief executive David Prentice said the key drivers of the reduction in ebitdaf were a reduction in the ‘fair value’ of the company’s carbon credits after a gain in the prior year (net difference of $12m), along with additional new generation development expenditure ($6m) and a difference in the allocation of corporate costs ($5m).
“The first six months of the financial year was certainly a challenge,” Prentice said.
In the first quarter, the company navigated low hydro flows and high prices, and then in the second quarter it was strong hydro flows and low prices.
“Things settled down in the second half of the year, and the final quarter of the year finished particularly strongly with solid wholesale prices and strong generation volumes,” he said.
Manawa’s $150m bond issue was well supported.
The company declared an 8.5 cents per share dividend, taking the full-year dividend to 16 cents a share.
Prentice said the company had initially focused on relaunching as Manawa Energy.
“We have a diverse portfolio of existing renewable generation assets, strong development capability, a supportive major shareholder, and significant, flexible funding ability,” he said.
The company reported total electricity generation of 1917 gigawatt hours, up nine per cent on the 1760 gigawatt hours generated in 2022.
Manawa said important milestones were achieved across the new developments pipeline and the ongoing asset enhancement programme.
Prentice said Manawa’s pipeline of potential wind and solar developments had increased further to more than 900 megawatts over the past 11 months.
“We know Aotearoa New Zealand needs a huge amount of investment in renewable generation over the coming decades – this is inextricably linked to our strategy.
“We’re working hard to ensure we’re playing our part in meeting the rising tide of demand for electricity,” he said.
“As part of the portfolio of development options we are considering, we are advancing work on a 28-megawatt solar farm adjacent to the Argyle power station, part of our Branch River hydro scheme in Marlborough.”
Manawa anticipates this project will, if pursued, deliver enough electricity to power around 8,000 average homes.
The site had a great solar resource, excellent access to transmission, good construction characteristics, and was close to resources at the Argyle station.
“If it proceeds, we estimate the solar farm will cost around $55-60m to construct and we hope it will be up and running by 2026.”
Manawa’s announced earlier this month that it was pursuing the 230MW Project Huriwaka wind development in the central North Island.
“If it proceeds, it is expected to generate around 800GWh of electricity each year.”
Manawa said it was investing heavily in its existing generation assets and that it was on track to be delivering around an extra 80 gigawatt hours of electricity per year from these assets by the 2028 financial year.
Asset enhancement projects had been completed at the Branch River and Cobb River schemes, and major projects were also in full swing at the Waipori and Deep Stream schemes.
Manawa’s net profit came to $444m, up from $120m in the previous year, underpinned by the successful sale of the Trustpower mass market retail business early in the year.
Looking ahead, Manawa said it continued to be largely insulated from the high inflationary environment in Aotearoa New Zealand, with its revenue streams mostly linked to wholesale pricing or inflation-indexed contracts.
Prentice said there were headwinds from general cost inflation, particularly for new development project returns and major enhancement projects, but these were expected to be largely offset by projected increases in future wholesale electricity prices.
He said the company’s capital expenditure programme over the next three years was going to be significant.
The company’s guidance is unchanged from the detailed information provided in March 2023. Ebitdaf in FY24 is expected to be in the range of $120m to $140m, assuming wholesale prices remain materially in line with the current ASX forward curve, average hydrological conditions, operational expenditure of around $8m in relation to new developments, no material adverse events, and generation volumes of approximately 1915 gigawatt hours.
Capital expenditure over is expected to be in the range of $65m-$80m.
“It will undoubtedly continue to be a period of huge change and opportunity in the renewable energy sector,” Prentice said.
“We’re excited about the future as we continue to bring our strategy to life, creating value as we play our part in powering a sustainable future for Aotearoa New Zealand.”
