Genesis Energy, New Zealand's largest electricity retailer, posted a 2.7 percent decline in annual operating earnings as a combination of lower electricity, gas and oil prices combined with ongoing retail market competition to reduce revenues slightly more than operating costs.
Earnings before interest, tax, depreciation, amortisation and movements in the value of financial instruments declined by $9.5 million to $335.3 million in the year to June 30, on total revenues of $2.01 billion, against $2.02 billion in the prior year, the Auckland-based company said in a statement. Total operating expenses fell to $1.68 billion from $1.75 billion.
The Genesis board was "satisfied with the overall performance of the company in what has been a challenging year," chair Jenny Shipley said.
"Genesis Energy continues to perform well in a constantly and quickly evolving energy market."
The result reflected "a determination by the board to drive improved cost control and efficiencies to offset the external influences impacting on the business as it looks to the future".
Newly appointed chief executive Marc England, who replaced long-serving Albert Brantley in May, said the company was reorienting to improve its ability to "execute its strategies at speed".
England has delivered a shake up of the company's senior management team.
"In the short term, we are determined to extract more value from our existing operations while we implement our plans to deliver new services for our customers and thrive in the evolving energy market," he said.
Net profit after tax increased to $184.2 million, from $104.8 million the previous year, as its generation assets were revalued up by $138 million, compared with no movement in their value the year earlier.
The board declared a final dividend of 8.2 cents per share for total distributions for the financial year of 16.4 cents, compared with total distributions of 16 cents last year. The dividends are only 80 percent imputed versus 100 percent imputed in the previous year.
The final dividend will be paid October 14 with a record date of September 30. The company will forecast earnings at its October 19 annual meeting.
Earnings per share of 18.4 cents per share compares with 10.5 cents in the previous financial year.
Consistent with other players in the sector, capital expenditure plans for the year ahead are limited because of current over-supply of electricity capacity, with just $39.7 million of "stay-in-business" capex planned.