Genesis half-year profit rises

23:12, Aug 14 2013

State-owned Genesis Energy has lifted operating profits by 3 per cent in the six months to the end of December to $196 million, in what it calls a "solid" result.

Genesis, the country's biggest energy retailer, also declared a $57m interim dividend to the Government.

The 3 per cent rise in earnings before net finance expense, tax, depreciation, amortisation and fair value adjustments (Ebitdaf), reflected a solid first half of the year despite lower wholesale electricity prices and total generation being down 5 per cent on the same period last year.

After-tax profit for the six months ended 31 December was $71m, up 85 per cent from $38m in the previous period. The bottom-line profit was up because of improved operating earnings, lower depreciation, depletion and amortisation expenses, and a positive swing in non-cash fair value gains.

It was the first time in two years that Genesis has paid a dividend after absorbing the earlier acquisition the Tekapo A and B hydro power stations in the South Island.

In the half year volatile hydro lake inflows meant generation volumes fell to 3786GWh (3983GWh in 2011).

Genesis also said it faced a lower average wholesale price received of $64.77, down 19 per cent from $79.89 in the same period of 2011.

As a result, revenue fell to $1.031 billion from $1.112b.

Revenues were also affected by reduced wholesale gas volumes and a planned outage at Kupe that reduced oil and gas sales. This was offset to some degree by higher LPG and retail electricity sales.