Genesis Energy has reported its result for the first half to December 31. Photo / Brett Phibbs
Genesis Energy has reported its result for the first half to December 31. Photo / Brett Phibbs
Genesis Energy said its earnings dropped in the first half as generation costs rose due to lower hydro inflows and the extended outage of its gas-powered Unit 5 turbine at Huntly.
This resulted in earnings before interest, tax, depreciation, amortisation, and financial instruments (ebitdaf) of $202 million for the first half, down 32 per cent on the previous corresponding period.
Genesis cut its interim dividend to 7 cents a share from 8.8 cents.
With hydro inflows falling back from last year’s near historic levels, Genesis said its coal and gas-fired Rankine units at Huntly, with higher fuel costs and emissions, supported the electricity market during the Unit 5 outage.
Both these factors also impacted on the company’s gross margin, which fell $71.3m.
Reduced earnings meant the company’s net profit came in at $38m, down 74 per cent.
Genesis said it had grown its customer base for the fourth consecutive quarter, adding nearly 9,500 customers, up 2 per cent, and started executing its long-term growth strategy, “Gen35″.
With hydro inflows falling back from last year’s near historic levels, Genesis said its coal and gas-fired Rankine units at Huntly supported the electricity market. Photo / NZME
Chief executive Malcolm Johns said the company had plans to tackle operating costs.
Genesis said late last year that jobs were on the line.
In today’s release, it said a reduction of around 200 roles was expected across this year and next year, with about 70 per cent confirmed in 2024.
Johns said the challenging operating environment underlined the flexibility of Genesis’ portfolio of generation assets.
He said Genesis was setting the foundations for future growth out to 2035.
“Full-year 2024 is the first of those and crucial for setting the platform to transition ourselves, our customers, and help the country reach net zero 2050,” he said.
‘We’re making good progress,” Johns said.
For the full year, Genesis expects ebitdaf to be around $430m, subject to hydrological conditions.
The financial impact of Unit 5′s outage is estimated to be $20m to $25m in ebitdaf and is included in the latest guidance.
The ebitdaf guidance for 2025, as outlined at the November 30 investor day, remained at $500m.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
