NWF - NZ Windfarms

[Jantar]

Looks more like a SW Glitch. Check again ... production now seems to be back to normal
Looking at the generation graph on EM6 it appears to be a planned shutdown, but no such shutdown was announced to the electricity market. And on such a windy day, with high forecast prices, it would have to be the worst possible day for a planned shutdown of the whole farm.

[Hectorplains]

http://www.upworthy.com/try-not-to-jiggle-while-watching-these-amazing-bladeless-wind-turbines

Not strictly on topic, but is this the next generation of wind generators?

[JAYAY]

https://www.nzx.com/companies/NWF/announcements/282593

No special general meeting. Well there's a cost saving.

[BlackPeter]

interesting ... the board realised that they are lacking skills (I certainly agree with that ....) and they found that they are currently wanting in the following areas:

- they need to add an commercial Engineer preferably with wind or rotating plant experience
- they need a candidate with experience in corporate governance
- they need a candidate with extensive commercial experience
- and they realise that they lack independence (given that the majority of them sits one way or another on the Vector gravy train)

https://www.nzx.com/files/attachments/237445.pdf

Just wondering - if they find this amazing "super board member" - what are the other three board members needed for (other than warming the remaining board chairs ...)?

Discl: hold (probably too many ...)

[blackcap]

interesting ... the board realised that they are lacking skills (I certainly agree with that ....) and they found that they are currently wanting in the following areas:

- they need to add an commercial Engineer preferably with wind or rotating plant experience
- they need a candidate with experience in corporate governance
- they need a candidate with extensive commercial experience
- and they realise that they lack independence (given that the majority of them sits one way or another on the Vector gravy train)

https://www.nzx.com/files/attachments/237445.pdf

Just wondering - if they find this amazing "super board member" - what are the other three board members needed for (other than warming the remaining board chairs ...)?

Discl: hold (probably too many ...)

Are they not seeking one more member to replace Dr Julian Elder (the current chairman) who is resigning effective 15 June?
https://nzx.com/companies/NWF/announcements/283984

[Joshuatree]

I'm watching the electricty market on a quiet saturday night, and can see one of NWF's problems very clearly.

MELCA are generating 1451 MW of which 62 MW is from wind, but all from the coastal wind farms near Wellington.
CEN are generating 888 MW of which 82 is from a GT peaking unit.
GNE are generating 835 MW, of which 605 MW are from Huntly. 1 coal unit and their CCGT.
MRP are generating 720 MW of which 45 is from Southdown.
TPW are generating 85 MW, but none from wind.
NWF is not generating a single MW.

The wholesale price at Bunnythorpe is $104, and windfarms in general are earning almost nothing.

Because of the way the market is structured, when the wind blows, wholesale prices are low. When the wind doesn't blow wholesale prices are high. NWF management needs to learn how to take advantage of these situations, rather than suffer when wind generation is low.

Any chance of an update Jantar? Warm weather and good lake inflows can't be helping NWF

[Jantar]

I'm watching the electricty market on a quiet saturday night, and can see one of NWF's problems very clearly.

MELCA are generating 1451 MW of which 62 MW is from wind, but all from the coastal wind farms near Wellington.
CEN are generating 888 MW of which 82 is from a GT peaking unit.
GNE are generating 835 MW, of which 605 MW are from Huntly. 1 coal unit and their CCGT.
MRP are generating 720 MW of which 45 is from Southdown.
TPW are generating 85 MW, but none from wind.
NWF is not generating a single MW.

The wholesale price at Bunnythorpe is $104, and windfarms in general are earning almost nothing.

Because of the way the market is structured, when the wind blows, wholesale prices are low. When the wind doesn't blow wholesale prices are high. NWF management needs to learn how to take advantage of these situations, rather than suffer when wind generation is low.


Any chance of an update Jantar? Warm weather and good lake inflows can't be helping NWF

OK, It is now right on the morning peak, on a warm winter day.

MEL are generating 1878 MW of which 135 MW is from wind, mainly from the Waiarapa.
CEN are generating 1270 MW of which 169 is from GT peaking units.
GNE are generating 949 MW, of which 400 MW are from Huntly. 1 coal unit and their CCGT.
MRP are generating 989 MW of which 429 is from geothermal.
TPW are generating 304 MW, of which 118 MW is estimated from wind.
NWF is generating 18 MW.

The wholesale price at Bunnythorpe is only $32, and windfarms in general are generating 271 MW, but not earning very much.

Overnight the wind was stronger and the windfarms were generating more, but the whole sale price was only a few cents, not even $1 per MW.

[BlackPeter]

OK, It is now right on the morning peak, on a warm winter day.

MEL are generating 1878 MW of which 135 MW is from wind, mainly from the Waiarapa.
CEN are generating 1270 MW of which 169 is from GT peaking units.
GNE are generating 949 MW, of which 400 MW are from Huntly. 1 coal unit and their CCGT.
MRP are generating 989 MW of which 429 is from geothermal.
TPW are generating 304 MW, of which 118 MW is estimated from wind.
NWF is generating 18 MW.

The wholesale price at Bunnythorpe is only $32, and windfarms in general are generating 271 MW, but not earning very much.

Overnight the wind was stronger and the windfarms were generating more, but the whole sale price was only a few cents, not even $1 per MW.

cheers Jantar.

Here is the link to NWF's production data and power price, if people want to check for themselves:
http://203.114.161.10/trh.htm

Obviously - NWF is not a good short term investment (well, it was not for the last 10 years or so, but for the spike from 5 cent to 10 cents end of last year) and I doubt that watching this graph helps to make sensible investment decisions.

More important is in my view
* what we think the power prices will do over the next handful of years? Note: increasing temperatures mean lower power prices in winter and higher in summer - irrigation & A/C;
* whether the new board is any better than the old one? We still have some regulatory questions and a hostile relationship to some neighbours to resolve;
* whether they find a way out of the financial straitjacket (line lease) the old board chose to get into and
* whether they really managed to get the teething problems with the windflow turbines under control (just for completeness - I do have little concerns in this area) ... ah yes, and
* whether they manage to curb their bureaucratic overhead (a huge and expensive management team spread across NZ just to run a tiny Palmy North company) without loosing essential know how;

Lots of ifs ... but hey - at current you could buy 91 turbines, each with a retail value of (from memory) around $ 500k a pop for a lousy market cap of $27m. Thrown in are the concrete towers and the resource consents for free. Could be a bargain, if there wouldn't be all the if's ...

[Joshuatree]

Excellent thanks guys; fascinating stuff.
Yes there have been many issues with the turbines and gearboxes in the past; this design being pretty much a one off pet project ii think from memory.
A slight diversionary detail ; I've noticed a former poster on here talking happily about his early buy in to NZW on H/C recently.

[BlackPeter]

Excellent thanks guys; fascinating stuff.
Yes there have been many issues with the turbines and gearboxes in the past; this design being pretty much a one off pet project ii think from memory.
A slight diversionary detail ; I've noticed a former poster on here talking happily about his early buy in to NZW on H/C recently.

NZW? Do you mean NWF?

[Joshuatree]

whoops yes

[JAYAY]

https://www.nzx.com/companies/NWF/announcements/284899

Does anyone know anything about our new Independent Director Rodger Kerr-Newell?
All I can find on google is that he's done the rounds as a Council trougher.

http://www.localmatters.co.nz/Features/AucklandCouncil/Auckland+Council+Feature+Archives/Rodney+chief+executives+golden+handshake+largest+i n+Auckland.html

[BlackPeter]

Oh dear ... how hard can it be to identify saving opportunities in a small local company with a total of 20 staff but remotely run by a rampant management overhead spread across New Zealand?

Instead of doing the obvious the new board hired now not one but two consultants to prepare reports. I suspect that's another at least high 5 digit sum (or more likely low 6 digits) down the gurgle just to tell us what we knew all the way along.

https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=4195060

But I guess we deserve it ... at the end it was the inaction of share holders which resulted in the appointment of the current board ...

[blackcap]

Oh dear ... how hard can it be to identify saving opportunities in a small local company with a total of 20 staff but remotely run by a rampant management overhead spread across New Zealand?

Instead of doing the obvious the new board hired now not one but two consultants to prepare reports. I suspect that's another at least high 5 digit sum (or more likely low 6 digits) down the gurgle just to tell us what we knew all the way along.

https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=4195060

But I guess we deserve it ... at the end it was the inaction of share holders which resulted in the appointment of the current board ...

I think there is more than meets the eye here BlackPeter. Lets give the new board a chance and see how they go. The old board did nothing for nigh on 5 years.

[BlackPeter]

I think there is more than meets the eye here BlackPeter. Lets give the new board a chance and see how they go. The old board did nothing for nigh on 5 years.

make that 10 years ...

Anyway - always open for positive surprises, I guess at the end hope is all which is left, isn't it?

[blackcap]

make that 10 years ...

Anyway - always open for positive surprises, I guess at the end hope is all which is left, isn't it?

Your not wrong there. And yes it was about 10 years but willing to give them the benefit of the doubt :)

[JAYAY]

The Directors representing Vector (with 22% shareholding) would not have been in there "doing nothing" all that time.
Michael Stiassney as chairman would not have tolerated non performing directors or CEO.
I don't think you guys are taking account of the fact that the board had been seriously hamstrung by on going litigation by NPCC.
The consultants have been hired to try to appease disgruntled shareholders.
They will tinker around the edges to try and justify their fee.
What are you going to say when they don't come up with anything substantial?
We have some major shareholders in there. Why are they not making waves?
Is it because they know that all they can do is patiently wait for power prices to rise as they surely must.

[BlackPeter]

The Directors representing Vector (with 22% shareholding) would not have been in there "doing nothing" all that time.
Michael Stiassney as chairman would not have tolerated non performing directors or CEO.
I don't think you guys are taking account of the fact that the board had been seriously hamstrung by on going litigation by NPCC.
The consultants have been hired to try to appease disgruntled shareholders.
They will tinker around the edges to try and justify their fee.
What are you going to say when they don't come up with anything substantial?
We have some major shareholders in there. Why are they not making waves?
Is it because they know that all they can do is patiently wait for power prices to rise as they surely must.

Good to see one happy shareholder.

Personally I would prefer to direct my donations to the red cross or some other charity rather than continue to feed the old boyz club of existing and previous Vector employees and contractors with the shareholder capital they destroyed.

Just help me to understand why a small Palmerston North windmill needs next to a site manager in Palmerston North an expensive CEO with office in Auckland (managing the company presumably over the phone) and a GM residing in Christchurch doing regular (company paid) round trips to windy Palmy. What exactly are the CEO and GM doing justifying their salaries?

Does a company of 20 staff really need a CFO ... or would a part time accountant do the job maybe at a more reasonable price?

Ah - and ever considered that you need two to Tango (re the continuous litigation). I haven't seen a lot of activity and openness from any of the previous boards in really engaging with Palmerston North City council and with their neighbourhood. Sure - after 10 years of litigation the boundaries have hardened up on both sides, but don't blame the litigation for the huge destruction of shareholder value. Open your eyes and blame the board who allowed this to drag on!

Big share holder happy? Well, I don't know how you measure that. But sure - this is for some time one of Vectors projects, staffed by Vector people ... and Vector have the benefit that they have the say but only pay 23% of the bills. The rest of the bill is paid by the small share holders who have basically no voice around the board table.

Vector can't be happy with the financial performance of the company, but they might have a hidden agenda ... which may or may not be aligned with the agenda of us small share holders. I doubt it.

[blackcap]

I think the new board are looking at cutting some of the "fat" as you describe there BP.

[Jantar]

...

Just help me to understand why a small Palmerston North windmill needs next to a site manager in Palmerston North an expensive CEO with office in Auckland (managing the company presumably over the phone) and a GM residing in Christchurch doing regular (company paid) round trips to windy Palmy. What exactly are the CEO and GM doing justifying their salaries?

....
To put it in perspective: The total output of all of NWF's assets is less than a single generator at Genisis' Tokaanu Power Staion. The GM of the whole Tongariro group is on a salary of around $200 - $250 k pa. Why should anyone at NWF earn more than this for lower responsibility?

[JAYAY]

BP, I never said I or the big shareholders were happy.
If these consultants can come up with big savings then I will be happy but I am not building up high expectations.

[BlackPeter]

Monthly reporting time ... well, for CEN this is: https://www.nzx.com/files/attachments/241356.pdf

Highlights:
The average NI unit price achieved ($68 / MWh) is well above the average unit price NWF achieved last year ($55.37 for NWF) and much better than the average unit price for the same month last year ($54 / MWh). Obviously - we had some cold spells, but maybe the effect of the capacity reduction (CEN mothballing Huntly) starts to kick in as well?

More wind (and more wind-electricity generated) in July 16 than in July 15. I didn't try to run the charts back into numbers, but just looking at the pictures - I'd say something like 25 to 50% more wind power generated in July 2016 (vs July 2015):

2015 graph:
8226

2016 graph:
8227


On the downside:
Plenty of water in the hydro storage and not that much wind in the first half of August.
Overall electricity demand down 3% compared to last year.

Still - looks sort of promising. Should shape up to a good first quarter and support the current SP;

[Jantar]

........
The average NI unit price achieved ($68 / MWh) is well above the average unit price NWF achieved last year ($55.37 for NWF) and much better than the average unit price for the same month last year ($54 / MWh). .......
The main reason for the disparity in average price reported by CEN and that by NWF is because of wind generation, and the way that pricing on the NZEM is discovered. On the (very) few times that wind generation is exactly where it is forecast to be, the prices shown on Transpower's forward schedules, both short and long, are very close to the final prices. But when the North Island wind is less than forecast, then peaking plant at $65 or more is required to replace it. When the wind is stronger than forecast, then scheduled peaking plant is not dispatched and the price will fall to that of stored hydro water.

We have seen this happening for many years now, and that is why CEN reports wind generation even though they do not have any wind themselves. Wind directly affects the prices.

NWF only has wind, and they will not hedge against those time when the wind doesn't blow. This means that when the wind blows strongly, they generate plenty and achieve only low prices. When the wind does not blow, prices go high, but NWF cannot generate, so doesn't realise those same higher prices. For NWF to be in a sustainable profit situation they need to reduce their average cost of generation to below the cost of generation by gas fired plant, or hedge against those high price periods where they are not generating. Both would be better.

The answer they gave to hedging at the last AGM showed quite clearly that they only ever considered hedging against generation, not against lack of generation.

[BlackPeter]

...

NWF only has wind, and they will not hedge against those time when the wind doesn't blow. This means that when the wind blows strongly, they generate plenty and achieve only low prices. When the wind does not blow, prices go high, but NWF cannot generate, so doesn't realise those same higher prices.
...

True - however this dynamics was unchanged in July 2015 as well as in July 2016 (and at any other point in time), however the average July 2016 power prices are well above the average July 2015 power prices. This should benefit even wind generators, particularly considering that they generated more electricity (at higher power prices) in July 2016 than in July 2015 at lower power prices (which somewhats negates your argument, but I agree, there are other factors to consider as well).

What I wanted to say is - based on this report (and assuming the trend sticks around) - has Q1 2017 for NWF the potential to look much better than Q1 2016 ... and this must be good (if you are still holding ...;))!

[Jantar]

.... ... and this must be good (if you are still holding ...;))!
Still holding and increasing. NWF has the ability to be very profitable as soon as they reduce their cost structure.

[BlackPeter]

I guess not enough "flesh" to assess whether this is a good or a bad thing for NWF:

https://www.nzx.com/companies/NWF/announcements/287522

I agree - the outcome of the agreed process will be price sensitive, but based on the currently provided information is it unclear to me whether it will push the price up or down.

On the other hand ... it is already a good thing that they found enough common ground to sign a MoU together with PNCC. So maybe a time to be cautiously optimistic - there is a plan to reduce the uncertainty swirling around the consents process.

[Jantar]

It is a good thing that they won't be spending as much on legal fees, so it all helps.

[JAYAY]

The announcement is not clear on who will be paying for the Independent Acoustics Expert from Australia. I.E. how independent is he going to be?

[BlackPeter]

The announcement is not clear on who will be paying for the Independent Acoustics Expert from Australia. I.E. how independent is he going to be?

In all likelihood this will be NWF. That's the way it is in resource consent hearings ... it is usually the applicant paying for experts.

[BlackPeter]

Annual results are out.

https://www.nzx.com/files/attachments/242541.pdf

It seems to be a tradition to release negative results towards the end of the day, and NWF is in this regard no exception.

Anyway - more power generated at a lower price (we knew that bit already) and a $4.9m impairment assuming lower future power prices (based on MoB numbers) results in a $3.9m loss.

Cash increased despite the $1m one off payment from Windflow only by roughly 600k, this makes you wonder how the next year will go ... but hey, maybe they finally manage to reduce these annoying legal fees (still 433k). Doubt however the latter, given that the resource consent process is still lingering.

So we can do what we always did: hope for more wind, higher power prices and a better board.

But hey - they even talk about the board being prepared to consider a divie for 2017. This will bring the SP into the stratosphere! Hope though the consideration will not be too exhausting for the new board, otherwise they might need to increase the board fees.

Discl: not one of my better investments. This will teach me to invest in environmentally friendly technologies ...

[mshierlaw]

Annual results are out.

https://www.nzx.com/files/attachments/242541.pdf

It seems to be a tradition to release negative results towards the end of the day, and NWF is in this regard no exception.

Anyway - more power generated at a lower price (we knew that bit already) and a $4.9m impairment assuming lower future power prices (based on MoB numbers) results in a $3.9m loss.

Cash increased despite the $1m one off payment from Windflow only by roughly 600k, this makes you wonder how the next year will go ... but hey, maybe they finally manage to reduce these annoying legal fees (still 433k). Doubt however the latter, given that the resource consent process is still lingering.

So we can do what we always did: hope for more wind, higher power prices and a better board.

But hey - they even talk about the board being prepared to consider a divie for 2017. This will bring the SP into the stratosphere! Hope though the consideration will not be too exhausting for the new board, otherwise they might need to increase the board fees.

Discl: not one of my better investments. This will teach me to invest in environmentally friendly technologies ...

And not a buyer in site on the bids table. Keyword: TAKEOVER.

[BlackPeter]

And not a buyer in site on the bids table. Keyword: TAKEOVER.

Well, technically that's not correct - I still can see two buyers, but I admit the volume is not material.

Not sure about takeover ... Vector didn't made a move so far.

On the other hand - if the consent issues get resolved (which they might in the next half year or so) and the price is still right, they might be interested - a good time window would be for them probably before the board starts to consider dividends ;).

Just updated my DCF spreadsheet and it comes quite close to the published NTA (even a tick above - 15.7 cents), could justify a takeover offer around 11 cents - 20% above MA100 ?

They certainly could save a lot of money when taking NWF over - remove the board and two of the redundant managers (i.e. 2 out of 3 - Site manager, CEO, GM) and the wind farm is already profitable just for saving board fees and salaries!

Lets wait and see, anyway no other option around ...

Discl: holding - and no insider knowledge at all ... DYOR;

[Jantar]

Well, technically that's not correct - I still can see two buyers, but I admit the volume is not material.....
Hehe.. I won't say which bid is mine.

[blackcap]

I see the AGM is going to be held in Palmerston North on 29 November at 10.30AM with an opportunity to visit the farm at conclusion......

https://nzx.com/companies/NWF/announcements/289967

[BlackPeter]

I see the AGM is going to be held in Palmerston North on 29 November at 10.30AM with an opportunity to visit the farm at conclusion......

https://nzx.com/companies/NWF/announcements/289967

Yep, noticed that as well ... and must say - at l(e)ast something good coming out of the new board! Having the AGM in Palmy is in my view a first, but very sensible step to bring the wind farm closer to the minds of the locals - and make it a "local" company.

Bit more revenue for the local airport and for some of the pubs (and maybe hotels) ... all good!

[Snoopy]

Hedging is more than just an insurance scheme, it is mainly a revenue leveling system that should work to benefit of both parties involved. There are a large number of hedge products available from time to time; forward contracts on the ASX are just one of them, and probably the least used.


I have been looking over the derivative products for the NZ power market, as listed on the ASX

http://www.asx.com.au/products/energy-derivatives/new-zealand-electricity.htm

One curious thing. There is mention of prices traded, but no mention of volume traded.

e.g. NZ Electricity Benmore Base Load Monthly (EH) Futures

I would have thought volume traded is just as critical as price, because traders need to know the size of the market they are engaging with. So why is trading volume not recorded?

There is a link on the RH side of that page:

http://www.asx.com.au/documents/products/ASX-NZ-Electricty-Futures-Base-Peak-Load.pdf

This mentions the size of the contacts (between 67MWh to 74MWh, dependent largely on the number of days in the month). But it doesn't mention if there is any limit on the number of contracts traded. So once again it seems the hedging market is opaque.

So how does this ASX based "NZ Power hedging" market work with such (apparently) poor disclosure of market information?

SNOOPY

[JAYAY]

I have been looking over the derivative products for the NZ power market, as listed on the ASX

http://www.asx.com.au/products/energy-derivatives/new-zealand-electricity.htm

One curious thing. There is mention of prices traded, but no mention of volume traded.

e.g. NZ Electricity Benmore Base Load Monthly (EH) Futures

I would have thought volume traded is just as critical as price, because traders need to know the size of the market they are engaging with. So why is trading volume not recorded?

There is a link on the RH side of that page:

http://www.asx.com.au/documents/products/ASX-NZ-Electricty-Futures-Base-Peak-Load.pdf

This mentions the size of the contacts (between 67MWh to 74MWh, dependent largely on the number of days in the month). But it doesn't mention if there is any limit on the number of contracts traded. So once again it seems the hedging market is opaque.

So how does this ASX based "NZ Power hedging" market work with such (apparently) poor disclosure of market information?

SNOOPY

My limited understanding of hedging contracts is that they are essential for the large generators eg meridian, contact, mighty river etc especially as it is a cost they can pass on in their retail pricing.
However the benefits for a minnow like NWF are minimal if any.
The big beneficiary would be the hedge fund.
Correct me please if I am wrong.

[Jantar]

.....

I would have thought volume traded is just as critical as price, because traders need to know the size of the market they are engaging with. So why is trading volume not recorded?

There is a link on the RH side of that page:

http://www.asx.com.au/documents/products/ASX-NZ-Electricty-Futures-Base-Peak-Load.pdf

This mentions the size of the contacts (between 67MWh to 74MWh, dependent largely on the number of days in the month). But it doesn't mention if there is any limit on the number of contracts traded. So once again it seems the hedging market is opaque......

SNOOPY
The ASX is not the most common hedging platform for the NZEM. Many participants in that market are not even associated with the New Zealand power industry, but just using at as the TAB of the power industry and betting on what the future prices will be. One of the largest players is deutschebank. Contracts on the ASX are in 0.1 MW parcels, so the size of the contract is simply the number of MWhs contracted. Most hedging in the NZEM is simply company to company CFD contracts where companies with large thermal plant, or base load geothermal plant will want to sell CFDs at their SRMC or slightly higher to justify keeping such plant on load, or to buy CFDs at a price less than their SRMC to justify shutting down such plant for a reasonable length of time.

A small company like NWF would almost always lose money by hedging on the ASX, or by selling CFDs from an intermittent generation source, but could improve their earnings if they can buy CFDs at less than their average cost of energy. NWF's cost of energy is quite high at around $65 per MWh ( I would need to look back at the annual report for the exact figure) so if they could buy say 10 MW of CFDs at around $55 they would reduce their CoE and hedge themselves against the times that wind isn't blowing.

[JAYAY]

http://www.stuff.co.nz/manawatu-standard/news/85449831/health-risks-from-wind-turbines-not-recognised-says-researcher

So now we have an "expert" who has no doubt been paid well to come all the way from Portugal to say what some vested interest wants her to say.
Why else would she bother coming here?

[Jantar]

http://www.stuff.co.nz/manawatu-standard/news/85449831/health-risks-from-wind-turbines-not-recognised-says-researcher

So now we have an "expert" who has no doubt been paid well to come all the way from Portugal to say what some vested interest wants her to say.
Why else would she bother coming here?
They didn't need to pay someone to come from Portugal; we have our own experts here who can give the same advice. Unfortunately the Windflow turbines used by NWF are worse for low frequency sound than the Vesdas used by the opposition.

[JAYAY]

https://nzx.com/companies/NWF/announcements/291417

Those people who wanted Vector out of the way have got their wish.
Now what!

[Flugenbear]

Rather short notice....something's going on.
I don't know a lot about Simon but 8 years as Group Chief Executive for Vector you'd think he'd know a thing or two.

[Blue Horseshoe]

Flugenbear;642173]Rather short notice....something's going on.
I don't know a lot about Simon but 8 years as Group Chief Executive for Vector you'd think he'd know a thing or two.[/QUOTE]

Maybe a complete take over offer coming from Vector, board has to be impartial ?.

[ados_nz]

Flugenbear;642173]Rather short notice....something's going on.
I don't know a lot about Simon but 8 years as Group Chief Executive for Vector you'd think he'd know a thing or two.

Maybe a complete take over offer coming from Vector, board has to be impartial ?.[/QUOTE]

Could someone smarter than myself clarify/speculate what would a complete takeover from Vector mean for those holding NWF?

[BlackPeter]

Maybe a complete take over offer coming from Vector, board has to be impartial ?.

Could someone smarter than myself clarify/speculate what would a complete takeover from Vector mean for those holding NWF?

Not pretending to be smarter than yourself (well, I don't know ...), but a takeover of NWF by Vector would make lots of sense - they could immediately move towards profitability, just by removing the management overhead and NZX listing overhead.

Question is - how much of this money would they be prepared to share with the other share holders (vs keeping it for themselves)?

Current SP is 7 cents, NTA (reflecting long term earning potential) is 14 cents, though should be more for VCT, given that they could save a lot of money by just turning them into a Vector department;

Just speculating - but might end up with an offer somewhere in the (early) 10 cents (maybe 10 to 12), however obviously only if VCT thinks that NWF is now "de-risked" enough in terms of resource consents and neighbourhood disputes to be happy for them to put their name on the company ...

[kiora]

Maybe a complete take over offer coming from Vector, board has to be impartial ?.

Could someone smarter than myself clarify/speculate what would a complete takeover from Vector mean for those holding NWF?[/QUOTE]

It would mean adios NWF and for those holding you may or may not be rewarded but hopefully you are more likely to be rewarded than not.

[JAYAY]

Some encouraging comments from you guys.
I would love to think you are right.
I would even be happy to take Vector shares as payment.

[JAYAY]

https://nzx.com/companies/NWF/announcements/291617

Sudden and immediate resignation by Simon McKenzie followed immediate appointment of Sean Joyce - who looks like a very high powered apointment.
Definitely something brewing.

[JAYAY]

https://nzx.com/companies/NWF/announcements/291773

A bit too much upheaval for my liking.
What do you guys make of this?

[Blue Horseshoe]

Yep the sh*t definitely hitting the turbine, something up. Watching closely.

[BlackPeter]

https://nzx.com/companies/NWF/announcements/291773

A bit too much upheaval for my liking.
What do you guys make of this?

I guess a CEO resignation without notice and without "Thank You" does not sound like a resounding vote of confidence. However - without any additional information difficult to make sense out of this information.

Obviously - the old guard (including Simon and now Chris) clearly destroyed a huge amount of share holder value and it always felt that Vector basically controlled NWF without owning a majority stake (and clearly without visible advantage to other share holders).

So what could it all mean (all hypothetical scenarios)?

(1) Rats leaving the sinking ship: The people in the know expect a bad outcome of the ongoing consent approval process ... and don't want their names tarnished by association. Hope this is not the case, but we probably can't discount this scenario;

(2) Some of the new big share holders might have discovered evidence that the association between Vector and NWF was much closer than "arms length" - and are now "silently" clearing the deck

(3) Vector wants to take over and removing everything looking like direct influence on the NWF board (though not clear why this would require a resignation without notice from the CEO - an Ex VCT man);

(4) Board and CEO disagreeing about the outcome of the recent company review (aren't we still owed an update on the outcome?) and Chris leaving under protest;

(5) Chris thinks that he did an amazing job at NWF but didn't got enough love and support out of the new board. Throwing the towel;

(6) Both events have nothing to do with each other and Chris is resigning for innocent reasons like health or family ... only thing I am wondering ... if this is the case - why don't they say so?

Whatever it is - I think the communication from the board could be better. Interesting to note that none (*) of the remaining directors has ever been elected by NWF share holders (if you can call it an election if many share holders just give the chair a blank cheque with their vote - proxies) ... our board system is clearly lacking and it probably will be again share holders who are paying the bill for that.

Next AGM will be interesting but might be a sad event for shareholders.

Discl: Holding, but didn't bother to buy this time a flight ticket to Palmerston North ... managed to somewhat reduce my holding since last year (but still holding to many);

(*) Changed from "only one" (which was clearly wrong) to "none". Thanks, crackity for pointing this out to me - you are (unfortunately) absolutely correct.

[Blue Horseshoe]

I like option "3". Maybe after Vector takeover they want Chris to run the show.

[JAYAY]

I guess a CEO resignation without notice and without "Thank You" does not sound like a resounding vote of confidence. However - without any additional information difficult to make sense out of this information.

Obviously - the old guard (including Simon and now Chris) clearly destroyed a huge amount of share holder value and it always felt that Vector basically controlled NWF without owning a majority stake (and clearly without visible advantage to other share holders).

So what could it all mean (all hypothetical scenarios)?

(1) Rats leaving the sinking ship: The people in the know expect a bad outcome of the ongoing consent approval process ... and don't want their names tarnished by association. Hope this is not the case, but we probably can't discount this scenario;

(2) Some of the new big share holders might have discovered evidence that the association between Vector and NWF was much closer than "arms length" - and are now "silently" clearing the deck

(3) Vector wants to take over and removing everything looking like direct influence on the NWF board (though not clear why this would require a resignation without notice from the CEO - an Ex VCT man);

(4) Board and CEO disagreeing about the outcome of the recent company review (aren't we still owed an update on the outcome?) and Chris leaving under protest;

(5) Chris thinks that he did an amazing job at NWF but didn't got enough love and support out of the new board. Throwing the towel;

(6) Both events have nothing to do with each other and Chris is resigning for innocent reasons like health or family ... only thing I am wondering ... if this is the case - why don't they say so?

Whatever it is - I think the communication from the board could be better. Interesting to note that only one of the remaining directors has ever been elected by NWF share holders (if you can call it an election if many share holders just give the chair a blank cheque with their vote - proxies) ... our board system is clearly lacking and it probably will be again share holders who are paying the bill for that.

Next AGM will be interesting but might be a sad event for shareholders.

Discl: Holding, but didn't bother to buy this time a flight ticket to Palmerston North ... managed to somewhat reduce my holding since last year (but still holding to many);

I am hoping it was No. 4.
The review was supposed to completed by end of August and acted on with urgency. Yet we have heard nothing.
I would also like it to be No.3.

[Dassets]

Tilt, market cap of NZ$725m, debt of A$570m, total EV circa NZ$1325m. 582Mw installed capacity with NZ at 197Mw. $ per Mw circa NZ$2.27m installed. Yes there are some other factors, ie Aust capacity and federal/state support.

But NWF $10m in bank, $20m market cap so $10m for assets. Farm operating at 43Mw installed maybe a touch better. so NZ$0.232m per Mw. Yes all the other things are known about the company but an AGM is coming up where shareholders will vote on directors. There has been a lot of change since these new directors started and it is what the company needed.

[kiora]

But NWF $10m in bank, $20m market cap so $10m for assets. Farm operating at 43Mw installed maybe a touch better. so NZ$0.232m per Mw. Yes all the other things are known about the company but an AGM is coming up where shareholders will vote on directors. There has been a lot of change since these new directors started and it is what the company needed.
(Plus an operational lease on power lines they can't get out of ?

[Jantar]

Looks like NWF are finally heeding the wishes of the shareholders. https://www.nzx.com/companies/NWF/announcements/292048

That is a saving of almost double last year's loss.

[Harvey Specter]

makes sense. They have a single customer who is a price setter. CFO/FC/Accountant/bookkeeper role could be outsourced for less than $10k using Xero. Head role pretty much needs to be an engineer to ensure those blades keep turning and electrons flowing to the GXP.

[whatsup]

Problem with Windfarms is they sell their product on the spot market and as such are a price taker instead of a price maker !

[Jantar]

Problem with Windfarms is they sell their product on the spot market and as such are a price taker instead of a price maker !
They don't really have any option other than sell at spot. But they could buy CFDs to counter the times that the wind isn't blowing, then they could sell some at commercial or even retail rates.

[Dassets]

Head role should actually match the outputs required from the role. AIR NZ used to have a focus on engineering and departure time versus planned departure time variation. It took a new board to reshape that desired executive output and make it focused on what it took the business to be successful.

With respect to the company only selling on spot, there are a load of options that should be examined and I suspect will be.


makes sense. They have a single customer who is a price setter. CFO/FC/Accountant/bookkeeper role could be outsourced for less than $10k using Xero. Head role pretty much needs to be an engineer to ensure those blades keep turning and electrons flowing to the GXP.

[Blue Horseshoe]

http://m.nzherald.co.nz/vector/news/article.cfm?c_id=1503810&objectid=11736123

Vector may take over NWF and install Tesla Power Packs to get top peak power price, they seem to have money to burn.

[Harvey Specter]

http://m.nzherald.co.nz/vector/news/article.cfm?c_id=1503810&objectid=11736123

Vector may take over NWF and install Tesla Power Packs to get top peak power price, they seem to have money to burn.They could swallow it easily and could possibly work well with the peer to peer energy trading platform they are creating?? I even think the network control/monitoring side of things is operated by Vector - they definitely have one screen for NWF in their securing networking monitoring room.

Having said that, it would have made more sense to make the offer when all the overheads were in there so they could offer a premium based on efficiencies. Now the efficiencies are hopefully going ahead, it makes it more expensive if they want to offer decent premium to get to 90%

[Biznez]

Recent events have clearly shown what the insiders (board and executive) really think of the prospects for NWF by leaving the sinking ship en masse. All elected directors have resigned and so has the CEO, and, worse yet, a bunch of corporate bludgers have taken their place. These unelected directors have added a motion to the AGM to "issue up to 23,000,000 Options to Senior Executives and Directors."

NZ Wind Farms is very vulnerable to the unscrupulous with shareholders like you being the biggest losers.

I urge all shareholders to VOTE AGAINST Resolutions 1, 2, 4, 5 and 6, and VOTE FOR Resolution 3.

You have until the 27th October to vote on this important matter. It can be done online if you have your CSN & FIN numbers to hand.

[Joshuatree]

Thats 27th November of course Biznez
3 year options half @ 12 c half @ 15c sounds a reasonable hurdle ?
Current price 8.1c jumping from 7c last few days.
Do you think they have an agenda that will exclude the rest of shareholders and how so?

[blackcap]

Thats 27th November of course Biznez
3 year options half @ 12 c half @ 15c sounds a reasonable hurdle ?
Current price 8.1c jumping from 7c last few days.
Do you think they have an agenda that will exclude the rest of shareholders and how so?

Sounds fair enough to me. If they can get the SP to 12 cents, how long has it been since it was 12 cents? And then 15 would be a great target. Better this type of incentive than throwing cash at execs and directors.

[Dassets]

What is it with this thread? You get a first time poster urging shareholders to vote against allowing directors to set auditor remuneration(a statutory requirement), urging people to leave the company with only one director(who has no stock either). He calls the company a sinking ship. The directors made it clear there were reviews going ahead. They announced the CEO and CFO roles were being disestablished(total wage bill over $500T) and the CEO resigns two days before, hmmmm.

As I am one of the nominations, but I actually went and bought 8% of the company before I was nominated, I probably have a view. But calling me(and the others) corporate bludgers and calling me unscrupulus(which means acting illegally, unfairly, or dishonestly) is actually defamatory. Not the first time someone has defamed me on this site either. The poster can send me his contact details perhaps.

There has been over 30% of this company trade in the past 13 months. That would suggest to anyone experienced in the market that change is likely. Anyone who wants to talk to me, my number is on the notice of meeting. I did call the other new nomination to see what his take was. I suggest other shareholders do that rather than relying on an anonymous poster on his first post. I make no recommendation as to how to vote on his nomination.

Withe respect to the options less than half are actually being issued(and if I get on I will not be eligble). If the directors that get them get value then current shareholders get huge value. I see no problem in aligning interests between shareholders and directors.


Recent events have clearly shown what the insiders (board and executive) really think of the prospects for NWF by leaving the sinking ship en masse. All elected directors have resigned and so has the CEO, and, worse yet, a bunch of corporate bludgers have taken their place. These unelected directors have added a motion to the AGM to "issue up to 23,000,000 Options to Senior Executives and Directors."

NZ Wind Farms is very vulnerable to the unscrupulous with shareholders like you being the biggest losers.

I urge all shareholders to VOTE AGAINST Resolutions 1, 2, 4, 5 and 6, and VOTE FOR Resolution 3.

You have until the 27th October to vote on this important matter. It can be done online if you have your CSN & FIN numbers to hand.

[Gizzajob I can do that]

So its a third time poster verses a first time poster, who to believe maybe myself as a 50 odd poster.

[Dassets]

https://www.seek.co.nz/job/32240497?pos=1&type=standout&engineConfig=&userqueryid=171684627407791349&tier=no_tier&whereid=

Thing is this third time poster has 8% of the company. I have tried to insert a link to a Seek role, which happens to be the new role at NWF. Looks like the "corporate bludgers" have been busy.


So its a third time poster verses a first time poster, who to believe maybe myself as a 50 odd poster.

[Hectorplains]

...But calling me(and the others) corporate bludgers and calling me unscrupulus(which means acting illegally, unfairly, or dishonestly) is actually defamatory. Not the first time someone has defamed me on this site either. [/QUOTE]

One would hope that you bring to NWF greater business acumen than this tissue paper thin claim of defamation would suggest. Wind farm, indeed.

[BlackPeter]

Recent events have clearly shown what the insiders (board and executive) really think of the prospects for NWF by leaving the sinking ship en masse. All elected directors have resigned and so has the CEO, and, worse yet, a bunch of corporate bludgers have taken their place. These unelected directors have added a motion to the AGM to "issue up to 23,000,000 Options to Senior Executives and Directors."

NZ Wind Farms is very vulnerable to the unscrupulous with shareholders like you being the biggest losers.

I urge all shareholders to VOTE AGAINST Resolutions 1, 2, 4, 5 and 6, and VOTE FOR Resolution 3.

You have until the 27th October to vote on this important matter. It can be done online if you have your CSN & FIN numbers to hand.

Hi Biznez, you seem to have strong opinions on the NWF board. Fair enough, and I think most of us would agree that this company didn't do a lot so far to increase share holder value for most share holders (obviously, depending on timing).

Still - making such a voting recommendation feels a bit immature, unless there is much more you know and didn't tell us.

You said that shareholders should not approve the remuneration for the auditors (resolution 5). Following your advise would only be appropriate, if there is evidence that the auditors violated their obligations towards share holders (e.g. by filing knowingly a false audit assessment). Do you have any evidence for that? If yes, a notice to the FMA (and probably police / SFO) might be appropriate.

As well - wondering whether there is any connection between yourself and the only candidate you recommend for the board position? Could you please declare your interest.

Obviously - if share holders follow your recommendation, than NWF ends up with a board of one. Minimum Requirement from NZX is however three directors. How do you propose to resolve this issue?

[BlackPeter]

What is it with this thread? You get a first time poster urging shareholders to vote against allowing directors to set auditor remuneration(a statutory requirement), urging people to leave the company with only one director(who has no stock either). He calls the company a sinking ship. The directors made it clear there were reviews going ahead. They announced the CEO and CFO roles were being disestablished(total wage bill over $500T) and the CEO resigns two days before, hmmmm.

As I am one of the nominations, but I actually went and bought 8% of the company before I was nominated, I probably have a view. But calling me(and the others) corporate bludgers and calling me unscrupulus(which means acting illegally, unfairly, or dishonestly) is actually defamatory. Not the first time someone has defamed me on this site either. The poster can send me his contact details perhaps.

There has been over 30% of this company trade in the past 13 months. That would suggest to anyone experienced in the market that change is likely. Anyone who wants to talk to me, my number is on the notice of meeting. I did call the other new nomination to see what his take was. I suggest other shareholders do that rather than relying on an anonymous poster on his first post. I make no recommendation as to how to vote on his nomination.

Withe respect to the options less than half are actually being issued(and if I get on I will not be eligble). If the directors that get them get value then current shareholders get huge value. I see no problem in aligning interests between shareholders and directors.

No point in beating up a thread ... and I don't intend to defend Biznez's post. However - the way I read his post was that he only was dishing out attributes for the currently sitting (appointed) directors. So, I think the only people who could (or should) feel aggrieved by his post are Rodger Kerr-Newell, Stuart Bauld or Sean Joyce (as a gap-filler until the AGM). I assume you are none of these three - aren't you?

[Dassets]

No I am not. Biznet urged shareholders to vote against my nomination but supported someone else. I have spoken with that nominee. Biznet has not called me. Weird given you think a shareholder should be interested in why an 8% shareholder was standing or what that party's view was. I am not going to get into a forum based tit for tat, I re-ierate any shareholder is most welcome to call me or talk with me if they come to the AGM. Look at the Notice of Meeting for my number, it is at the end of my bio.

[Gizzajob I can do that]

No I am not. Biznet urged shareholders to vote against my nomination but supported someone else. I have spoken with that nominee. Biznet has not called me. Weird given you think a shareholder should be interested in why an 8% shareholder was standing or what that party's view was. I am not going to get into a forum based tit for tat, I re-ierate any shareholder is most welcome to call me or talk with me if they come to the AGM. Look at the Notice of Meeting for my number, it is at the end of my bio.

Thanks for the update. Any inside knowledge of what the spread consists of would be good to know, last years effort was a little disappointing to say the least.

[Dassets]

Haha. Hopefully nothing IMO, just another cost to cut out but will let you know.


Thanks for the update. Any inside knowledge of what the spread consists of would be good to know, last years effort was a little disappointing to say the least.

[BlackPeter]

folks, just learned that the usual volunteers doing the proxy holder service for the NZSA can't make it to the Palmerston North AGM.

Just wondering - any NZSA member out there who intends to go to this years AGM and prepared to act as Proxyholder? If yes - please send me a PM and I will hand you through ...

[JAYAY]

http://www.stuff.co.nz/manawatu-standard/news/86557395/Plan-change-draws-16-appeals

Is this to do with the council's review of NWF's conditions of consent?

Reassuring to see heavyweights Mercury, Meridian and Tararua appealing alongside NWF

[Jantar]

Sounds fair enough to me. If they can get the SP to 12 cents, how long has it been since it was 12 cents? And then 15 would be a great target. Better this type of incentive than throwing cash at execs and directors.I have been giving this matter a little thought over the past few days. The hurdles seem positive enough to encourage directors and senior management to really work on bring up the SP. But then 7.4% of the company does seem a lot to be in the hands of these same people. I would support a smaller parcell that would leave them with less than 5%, but not such a large parcel unless the company intends to buy those shares on market reather than create a new issue.

[Dassets]

They don't get that number. They get just over 3%. The others are just held in a scheme for possible ESOP grants or any new directors deemed to qualify. If I am voted on I will not be getting any.


I have been giving this matter a little thought over the past few days. The hurdles seem positive enough to encourage directors and senior management to really work on bring up the SP. But then 7.4% of the company does seem a lot to be in the hands of these same people. I would support a smaller parcell that would leave them with less than 5%, but not such a large parcel unless the company intends to buy those shares on market reather than create a new issue.

[Dassets]

No, it is separate as per NWF's announcements. From those announcements NWF signed an MOU with PNCC re a s.128 review which the company has said is being worked through. This article deals with an appeal to general planning changes proposed


http://www.stuff.co.nz/manawatu-standard/news/86557395/Plan-change-draws-16-appeals

Is this to do with the council's review of NWF's conditions of consent?

Reassuring to see heavyweights Mercury, Meridian and Tararua appealing alongside NWF

[BlackPeter]

Recent events have clearly shown what the insiders (board and executive) really think of the prospects for NWF by leaving the sinking ship en masse. All elected directors have resigned and so has the CEO, and, worse yet, a bunch of corporate bludgers have taken their place. These unelected directors have added a motion to the AGM to "issue up to 23,000,000 Options to Senior Executives and Directors."

NZ Wind Farms is very vulnerable to the unscrupulous with shareholders like you being the biggest losers.

I urge all shareholders to VOTE AGAINST Resolutions 1, 2, 4, 5 and 6, and VOTE FOR Resolution 3.

You have until the 27th October to vote on this important matter. It can be done online if you have your CSN & FIN numbers to hand.

I note that the candidate you supported so strongly has withdrawn his candidacy.

https://www.nzx.com/files/attachments/248512.pdf

Just curious - was this you? Any background information on this story you want to share with us? Given your expressed concerns related to the well being of other shareholders - and given that the saviour you recommended disappeared in the mist of history without first saving the company - what cause of action do you now recommend?

[Blue Horseshoe]

Resignation of Chief Financial officer.

Last one out turn the turbine switch off.

[Dassets]

OK the company said he was redundant two weeks ago. $500T of costs gone with him and the CEO


Resignation of Chief Financial officer.

Last one out turn the turbine switch off.

[blackcap]

I have for a while wondered why a company the size of NWF, with one income stream and a few expenses and a very simple balance sheet actually needed a CFO, let alone a CEO for what is effectively a small operations based business. So the CFO going (a job that would require no more than 2 hours per week I dare say) is probably a good thing? So cost savings being made by NWF, that is encouraging to see. Who knows maybe a dividend can be paid by these savings....

[BlackPeter]

I have for a while wondered why a company the size of NWF, with one income stream and a few expenses and a very simple balance sheet actually needed a CFO, let alone a CEO for what is effectively a small operations based business. So the CFO going (a job that would require no more than 2 hours per week I dare say) is probably a good thing? So cost savings being made by NWF, that is encouraging to see. Who knows maybe a dividend can be paid by these savings....

Absolutely agree - to have a CFO for a very simple 20 staff operation was always a joke (though I understand that he was a nice guy ....). A part time accountant should be more than sufficient.

I think their Palmerston North site manager and their GM are still around? Obviously it would be concerning if they loose all their managers at the same time, but so far I think they have more than enough management capacity left for such a small company.

Communication from whoever is pulling the strings could be better, but otherwise not too worried.

Discl: holding (some);

[BlackPeter]

Just reading through the AGM presentation ... and it certainly feels that a quite refreshing wind of change is blowing though the company: https://www.nzx.com/companies/NWF/announcements/293478

First time I've seen board and management identifying and addressing the real issues. Great to hear that they now talk in amicable terms about the PNCC ... and identify themselves as being part of the local economy!

Anybody here attending the AGM? I wee report, capturing the mood, questions and impressions would be great!

[Joshuatree]

Yes very positive and transformational sounding.Will the gearbox etc problems continue"

" On looking back at previous reports I noted a high focus on themany issues associated with the Windfarm and the Windflow 500 generaters that we areusing. Whilst it is fair to say that if one were building a windfarm today, it is unlikely thatone would use this particular equipment, ..."

[blackcap]

Attended the meeting this morning.

The Chairman as you will have read made a good impression. Was prepared to let people speak and ask questions (many were simplistic in nature) but made every effort to address concerns. The new board were amicable towards the PN council and that is another reason they held the meeting in the Palmerston North Convention Center. Showing they are a part of the community etc.
Was refreshing to hear a looking forward strategic plan being made and under the old board this was non-existent. The CFO (the one that left) asked for a 3 month payout and was granted.. as his position was being disestablished anyway.
Stuart Bauld seems competent in his new temporary role as CEO.
Can't really add much as the Chairman and CEO's report says it all really.
John Southworth made a good case for his addition to the board and I believe all resolutions were passed.

[Jantar]

Attended the meeting this morning. .....
Was refreshing to hear a looking forward strategic plan being made and under the old board this was non-existent. .....
This would be the most positive statement I have ever seen from NWF management. Bodes very well for the future.

Therewas a one coment in the published address that IMO shows they still do have a good handle on New Zealand's weather patterns:

"Electricity generation was 129.6 GWh, a 5.4 percent increase over the 123.0 GWh recordedin the previous year. The implied improvement in efficiency can be explained partly by a 1 percent increase in the amount of wind from the west, which is the optimum direction for the wind farm to operate at maximum efficiency The increase in output was more than offset by an 11 percent decrease in wholesale electricity prices received, resulting in a 6.3 per cent fall in revenue. Lower spot electricity prices resulted from continued surplus capacity, above average hydrology (lake storage levels) particularly later in the year....."
Heavy rainfall in NZ is accompanied by strong winds. So in years with higher than average winds we will also see higher than average lake levels. These two phenomena will alsway go hand in hand, and is another reason why intermittent generation should be buying long term hedges. At least I do see that the current management team is looking that side of things.

[BlackPeter]

Attended the meeting this morning.

The Chairman as you will have read made a good impression. Was prepared to let people speak and ask questions (many were simplistic in nature) but made every effort to address concerns. The new board were amicable towards the PN council and that is another reason they held the meeting in the Palmerston North Convention Center. Showing they are a part of the community etc.
Was refreshing to hear a looking forward strategic plan being made and under the old board this was non-existent. The CFO (the one that left) asked for a 3 month payout and was granted.. as his position was being disestablished anyway.
Stuart Bauld seems competent in his new temporary role as CEO.
Can't really add much as the Chairman and CEO's report says it all really.
John Southworth made a good case for his addition to the board and I believe all resolutions were passed.

Hi bc, thanks for that - appreciated. Question - did you do the tour as well? If yes - what have been your impressions? It sounds like the board was quite upbeat. Did you happen to see some staff as well? Did they talk about the recruitment process for the new commercial director? cheers ....

[kiwi_on_OE]

I see 2/3 voted for most resolutions, 1/3 voted against them. Any ideas who those opposed were? I'm not aware that any alternative was suggested by those opposing.

[blackcap]

Hi bc, thanks for that - appreciated. Question - did you do the tour as well? If yes - what have been your impressions? It sounds like the board was quite upbeat. Did you happen to see some staff as well? Did they talk about the recruitment process for the new commercial director? cheers ....

Hi BP, no I did not do the tour, had another appointment in Wellington later in the day. But as it was the tour was going to be compromised by very hard winds that were prevalent yesterday. It was still going ahead but not as initially planned. I did talk to the financial administrator, she said things were still good on the ground. The board was also very positive about the people that "go up the towers with spanners and get oil over themselves"... ie they drive the place. Commercial director- they are currently recruiting and hope to make an appointment early in the new year. I beleive once that happens Sean Joyce is going to step down.. he is currently fulfilling the 2 independents role.

[BlackPeter]

Thanks for the update ... this starts to feel like a real turnaround :). Obviously - there are still significant fundamental issues to overcome, like being a one trick pony and having most of the electricity at times when there is lots of power (and stored water) around, but still - sounds like the board is not anymore standing in the way of a company success but working towards it!

[blackcap]

Could the 1/3 opposed be the Vector 22% stake? Im not sure either to be fair Kiwi on OE.

[Dassets]

Hi, I was elected as a director yesterday so thank you to anyone who voted for me. On the vote against the resolutions Vector owns 63,684,362 shares. Given the vote against the resolutions (except auditor resolution) was circa 64m I will let people draw their own conclusion as to who opposed. I did the visit, by which time the wind had dropped to mere howling to allow a full visit. I personally was very impressed and it was a useful trip. It was pretty much the first time most staff had ever met shareholders so that exercise was useful for both the great staff and shareholders alike.

[Leftfield]

Thanks for the update ... this starts to feel like a real turnaround :). Obviously - there are still significant fundamental issues to overcome, like being a one trick pony and having most of the electricity at times when there is lots of power (and stored water) around, but still - sounds like the board is not anymore standing in the way of a company success but working towards it!

Early days for this one..... I would not be keen on buying until there is more news and a confirmed uptrend. I wish all holders well.

[BlackPeter]

Hi, I was elected as a director yesterday so thank you to anyone who voted for me. On the vote against the resolutions Vector owns 63,684,362 shares. Given the vote against the resolutions (except auditor resolution) was circa 64m I will let people draw their own conclusion as to who opposed. I did the visit, by which time the wind had dropped to mere howling to allow a full visit. I personally was very impressed and it was a useful trip. It was pretty much the first time most staff had ever met shareholders so that exercise was useful for both the great staff and shareholders alike.

Congratulations to your election.

NWF lost lots of shareholder value over the last decade ... best of luck in uncovering and retrieving this money for all of us!

Anything we can do to help?

[Dassets]

The new board is very open to thought. So if any shareholder has a view they want to put forward feel free to contact any of the directors.

[BlackPeter]

Some of you will remember Crackity ... he holds (next to others) a parcel of NWF shares and attended this years AGM. He send me his AGM impressions and agreed for them being published on sharetrader:


A much different AGM to last year - about 30 attendees - more informal yet focussed on dealing with things not providing excuses. The NBR / business desk report of the meeting is pretty accurate.

Rodgers speech -
Rodger ( new chairman ) impressed me with a sense of humour and walked the floor with the microphone himself in question time. My notes on his important points were
(1)definitely aiming for a maiden dividend in 2017.
(2) A strategic direction plan by March 2017 - take control of the business and maximise shareholder value.
(3) The S.128 PNCC resource consent review - independent expert is an Australian appointed by both parties - report goes to both parties - expectation this finalises the MOU already signed between PNCC and NWF - time frame within 6 months. PNCC supplied today's venue ( hired by NWF ) and the company realises they should be seen as local and a local employer and ratepayer and company. PNCC is described as supportive. There is also a district plan review on windfarms to which all windfarms in the area have made submissions. Everyone quietly confident legal battles over.

Stuart - acting CEO speech
(1)Company Review was to disestablish Chris CEO and Derek CFO roles and replace with 1 commercial director. 2) the company acknowledges a need to move from a price taker with wholesale margins to a price maker or end supplier with more margin.( this was what the reference become part of the cartel was about....) to do this they need to guarantee supply which could involve some partnership arrangement with a small hydro generator so they could both get better prices not tied to spot.
(3) become a local power retailer or e-retailer if (2) could be solved.
Stuart also had a sense of humour - used to be a PWC audit partner - does not really want to be CEO of NWF but stepped into the breach when Chris Sadler resigned.


Windfarm visit
We went in 6 groups of 4 people around the farm in these 2 vehicles so there for a couple of hours. I went with Peter the wind farm manager - he has been there for 8 years and was great and knowledgeable. Staff at the windfarm impressed me as did the visit - they get better downtime stats than the meridian and tilt farms next door. They know how to run this efficiently and all seemed happy - Chris Sadlers operational excuses were BS in my opinion. The staff had heard about the employee option scheme and were interested. They also were happy a big group of shareholders had actually come to visit.

Again - it feels the wind for NWF has changed ... and I think this is a good sign.

[Joshuatree]

Be great if they could find a Hydro pumping storage situ like GNX where they pump the water(when prices are low) up out of a storage lake(an old disused mine in this example) to one above and generate electricity when prices are high.Or when the winds not blowing.

[blackcap]

What does this mean?:



FORECAST: NWF: Changes to Operating Strategy

NZX Announcement

28 April 2017

For Immediate Release

NZ Windfarms Changes Operating Strategy
NZX listed merchant wind generator NZ Windfarms Limited (NWF) Board Chairman
Rodger Kerr-Newell is pleased to annouce a major shift in its operating
strategy. The organisation has implemented a dynamic curtailment regime
aimed at extending the service interval of its fleet of 96 wind turbines
located on the Tararua Ranges adjacent to Palmerston North City.

The changes are expected to yield significant annual operational savings that
will manifest steadily over time. It is anticipated that should the
initiative perform optimally and to expectations, the savings generated
during a 12 month period could be in the range of $300K to $700k. Given the
nature of the initiative, it is difficult to forecast with absolute certainty
what the exact quanta of prospective savings to the Company will be and how
quickly they will materialise. However, the Company will, through historical
analysis, be able to estimate with a degree of accuracy what the actual
savings in a previous period have been. The Company will report back to the
market in respect of this information from time to time.

NZ Windfarms Commercial Director, John Worth explains that whilst the plant
has boasted turbine availability above industry standards, this has come at a
cost. "We can now measure and analyse the wind resource quality in real time
at each turbine, and this new regime dynamically protects key mechanical
componentry, offering us significant savings over time." "These moves are
particularly relevant to the organisation in the current environment of low
wholesale pricing," says Worth. Kerr-Newell noted that this is part of a
series of interventions aimed at improving the performance of the
organisation.

For further information contact:

John Worth
Commercial Direction
+64 21 800 310
End CA:00300382 For:NWF Type:FORECAST Time:2017-04-28 11:42:03

[BlackPeter]

Well, yes, the worked hard to make the message incomprehensible;).

Just from reading it, I assume they plan to reduce the use of their turbines under suboptimal conditions (i.e high stress conditions which would reduce the generators life or increase the need for maintenance), particularly when electricity spot prices are low at that time (i.e. don't pay for the increased maintenance).

Should result in somewhat lower income but hopefully reduced maintenance cost and write offs more than compensating for it.

Just my guess ... you might want to ask the board to decode their message themselves.

[blackcap]

Well, yes, the worked hard to make the message incomprehensible;).

Just from reading it, I assume they plan to reduce the use of their turbines under suboptimal conditions (i.e high stress conditions which would reduce the generators life or increase the need for maintenance), particularly when electricity spot prices are low at that time (i.e. don't pay for the increased maintenance).

Should result in somewhat lower income but hopefully reduced maintenance cost and write offs more than compensating for it.

Just my guess ... you might want to ask the board to decode their message themselves.

Haha I might just give them a ring when I do have time. I think you might be right with your initial synopsis. But reading the announcement was certainly an interesting task in comprehension. If they can/do save what they say they will save, then this could be the start of a potential game changer. Half a million for this company is huge.

BP... your analysis was spot on. Called John Worth and asked him about the statement to mkt. Its an app they have been testing and he did indicate it was difficult to quantify the benefits at this stage but they he thought they would be substantial as indicated in the release.

[blackcap]

Gamechanger? Certainly on the right track as far as I can see. High power prices the last 2 months will be helping too but that is swings and roundabouts. But this to me (and the last announcement) shows the board is being pro-active and trying to find value for shareholders and bring this company around to good profitability and potentially paying dividends. Nice to see they are not looking to dilute shareholders investments further and hopefully bank funding can be had at good rates.

NWF
03/08/2017 14:21
GENERAL
PRICE SENSITIVE
REL: 1421 HRS NZ Windfarms Limited

GENERAL: NWF: NZ WIndfarms Announces Prospective $17.3m Major Acquisition

NZX Announcement

3 August 2017

For Immediate Release

NZ Windfarms Announces Prospective $17.3m Major Acquisition and other matters

NZ Windfarmd Ltd (NWF) today advises it has entered into a Sale and Purchase
Agreement for the acquisition of significant transmission assets at its Te
Rere Hau Wind Farm near Palmerston North. The Company currently leases the
assets from line company Powerco Transmission Services Ltd.
Rodger Kerr-Newell, NZ Windfarms' Chairman said, "The new Board made a
commitment to shareholders at the last AGM that effort would be focused in a
number of areas including addressing the lease and obtaining control of
assets critical to the Company's operations. We have undertaken our own
analysis and engaged third party advisers to ensure we are paying a fair
price for the assets and we believe we are. The acquisition has other
positive effects on the Company such as providing control across both
generation and transmission assets to the injection node. It will also
improve the Company's free cash flow allowing that cash to be used for other
purposes."
"We are delighted that we have been able to deliver on the promise to address
this lease and we continue to work on all the other initiatives that we have
outlined to shareholders," said Kerr-Newell.
The total cash consideration payable to acquire the assets is $17.3m. The
assets include around 20km of dual 33kV transmission circuits, on-farm
reticulation cabling, a switchyard, 97 transformers (one per turbine),
relevant licenses and easements and other ancillary assets and spares. The
Company has leased these assets since the later build stages of the wind farm
in 2008, and the lease arrangements, with escalating lease costs, were to
remain in place until termination in 2028.
The acquisition is subject to certain conditions precedent including:
o The Company undertaking a due diligence investigation of the assets;
o The Company raising sufficient finance to fund the purchase price. To
this end, the Company is well advanced towards securing Bank funding for
approximately $12.3 million;
o The assignment or creation of certain property rights;
o Shareholder approval of the proposed acquisition. It is anticipated
that a meeting of shareholders will be held to consider the acquisition
during the course of September, and
o Standard settlement conditions commensurate with a commercial
transaction of this nature.
Settlement of the acquisition is expected to occur in late September, or
early October 2017.
It is anticipated that the Company will fund the purchase utilising a
combination of its existing cash reserves of circa $5 million, together with
bank funding of circa $12.3 million. The Board anticipates that the bank
funding will be committed for a three year term, with the loan repayments
structured to be amortised over 13 years, with equal annual principal
repayments of around $950,000. Total servicing cashflows will be
approximately $700,000 less per annum in the first 12-month period than the
existing lease arrangement. Going forward, interest costs will fall by
approximately $60,000 per annum as principal is paid down. This termination
will also free up further funds.
This acquisition will also positively affect NZ Windfarms value in use test
of assets as these assets will no longer be leased and can be more
cost-efficiently utilised through ownership. The Company will work through
this issue and advise the result in due course.
CEO John Worth notes that the Company has worked closely with Powerco's
leadership team in the purchase and acknowledges its strong cooperation and
spirit in this complex transaction. "This deal is illustrative of the
Company engaging actively in the electricity industry to improve its future."

Other matters
NWF also advises that it received an unrelated unsolicited approach from a
third party corporate expressing an interest in either acquiring its assets
or conducting a takeover of the company. The approach was from a credible
party. This approach at no time constituted a formal bid as defined under the
NZX Takeovers Code and was incomplete in a number of material aspects.
Discussions were terminated as the parties were unable to agree on price.
Board Chairman Rodger Kerr-Newell notes that, "The Board took into
consideration work-streams underway including the cost out program and other
initiatives in progress and decided that the interest did not match the
Board's view on value as the company re-shapes itself to take effective
advantage of the considerable assets it has. We will not comment further on
this approach."

For further information contact:

John Worth
CEO
+64 21 800 310
End CA:00304974 For:NWF Type:GENERAL Time:2017-08-03 14:21:07

[blackcap]

In the Herald:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11898588

and NBR:

https://www.nbr.co.nz/article/nz-windfarms-buy-te-rere-hau-wind-farm-distribution-assets-powerco-b-206069

[Poet]

They certainly seem to be making good solid progress dealing with and ticking off those outstanding issues that the previous board had failed to address. Well done to the new board!

[JAYAY]

It sounds positive. It will be interesting to see how the numbers stack up once we know the deal regarding the bank loan. I see that last years accounts show Interest Expense $958,000 and Finance Lease $435,000.
Does anyone want to hazard a guess what effect the deal is likely to have on the bottom line.

[Dassets]

Disclosure I am a director. We have said in the announcement. All the detail is in there.

[Well Endowed]

$16.5m original budget, back a few years ago. given the lease costs and subsequent retained capital requirements, I think $17.3m seems like a pretty reasonable price.

http://www.powerco.co.nz/Divisions/Transmission-Services/Our-Projects/Te-Rere-Hau-Wind-Farm/

[JAYAY]

Thanks Dassets, I must be going blind. Yes most definitely a positive. Exciting in fact.

[blackcap]

https://www.nzx.com/files/attachments/264477.pdf

https://www.nzx.com/files/attachments/264577.pdf

Two announcements by the company in recent days. To me it shows that shareholders did the right thing by ejecting the old board and management at prior 2 AGM's and the company now can actually do something. I like the "investor pack" were NWF spells out what they are trying to achieve and how they are going about achieving it. I can only wonder what previous management were doing there?
The chairman does allude to this under the banner of Operational Performance where he states "we can only wonder at how NWF fortunes would have been different had the company taken action earlier."

I will not unpack the announcements, you can read them yourselves and make your own conclusions but finally we have pro-active management, a board that cares, and at least value is being extracted.

[JAYAY]

The other day I read somewhere that the Resource Management hearing was taking place this week.
Now I just can't find the article anywhere.
Where is it? Anyone.

[JAYAY]

Latest update.
https://www.stuff.co.nz/manawatu-standard/news/96844204/solution-a-step-closer-for-te-rere-hau-wind-farm

[blackcap]

Latest update.
https://www.stuff.co.nz/manawatu-standard/news/96844204/solution-a-step-closer-for-te-rere-hau-wind-farm

Thanks Jayjay, if they can sort this out it will save another 500k per annum in legal fees, all feeding into the bottom line. Going to keep mine for a bit longer and with increased demand for electricity in future that can only be good for the electricity price.

[blackcap]

Anyone going to the AGM tomorrow? I do not know if a NZSA rep will be there but if there is any demand from you on here I can report back to what was said and asked etc? Let me know.

[Poet]

Anyone going to the AGM tomorrow? I do not know if a NZSA rep will be there but if there is any demand from you on here I can report back to what was said and asked etc? Let me know.

I'd appreciate that Blackcap, and I'm sure a few others would as well:)

[Arthur]

I understand they no longer just take the wholesale rate. Unfortunately that policy kicked in just before the massive peak in prices due to winter storms/ low SI hydro. I think they could have made over a million over 3 days under the wholesale system. Just wondering if the picked up any of that premium pricing?

[Well Endowed]

topped up with a small parcel today. Like the direction this is heading. Has been mismanaged and trading in the doldrums for far far far far far too long...

[blackcap]

Just attended the meeting today:

Plenty of people there, I guess about 50 (although my estimations of crowds not that great so could have been slightly less). Chairman spoke first and chairmans address is on the release to NZX. Did did intomate that the maiden dividend of between .7 and .9 cents would be payable or announced very shortly if the transaction proceeds. Looks like shareholder approval has been given and then they said the transaction completion would be imminent. I am guessing its all pretty much done just needed the final tick.
New Ceo John Worth was very impressive with industry knowledge and experience but also an ability to convey this to us the punters. Spoke about how they have done the transaction with Powerco, (previous management failed to even bother) saving 700k per annum starting now. Interest rate for the borrowing is 3.60% + the 90 day rate. So that sounds pretty good.
He spoke and was asked at lenght on curtailment. Read his speech to the AGM for more on this. But importantly the curtailment is cutting the cost of a M/W from $29 to $20 while not impacting too much on the revenue side. Also looking to curtail operations when not economic to keep producing power. (for example there are situations currently when the power price is $2M/W at night time and the cost of producing for NWF is $29. Unfortunately they have to keep producing even under these conditions when it is uneconomic. Currently not allowed to curtail under the regulatory regime but hoping this is about to change shortly. Have been lobbying industry to get these rules changed.
Future free cash flow (and there should be plenty as depreciation is about $2.5m p/a) looking to be partially paid out to shareholders. Although when asked what % this would be the directors were not too sure what this was.
Looking forward they are looking at options for having an off take agreement with another party (so don't have to take wholesale prices) but not got one in place yet. Hedging future prices is operational, the cost if negligible and this delivers less volatility in pricing.
Plenty of questions from the floor, mood was positive and things looking a lot better than they were 2 years ago.
ANy other questions, please let me know happy to answer.

[Grimy]

Thanks Blackcap. That all sounds very positive. As a holder from the beginning it is good to hear.
Cheers.

[Well Endowed]

Thanks for your insights Blackcap. I'm happily holding :)

[kiwi_on_OE]

Have just read the Chairman's and CEO's reports. The former had a few blunt comments about previous management.

I was interested in their plans for retail and/or additional generation. I assume for the latter they would go for hydro. Kourarau, Carterton, Genesis (1M), Mangahao, Horowhenua, Todd (42M), Raetihi, TrustPower (0.3M), Turitea, Palmerston Nth, PNCC (0.1M) are a few hydro stations nearby (to keep a single base of operations) that maybe the current owners might be persuaded to sell. Other small ones in Hastings and Taranaki too.

[blackcap]

Are you guys cognisant of the following site? It relates to "our windfarm" and you can see how it is opearating and $ received at any time of day...

http://203.114.161.10/trh.htm

[Well Endowed]

been following that all winter, although like to benchmark with the following:

https://www2.electricityinfo.co.nz/

Solid turnover and price action today by NWF's standards, and current SP of 11.2c is approaching a key breakout area hit in May-16 and Nov-15 of circa 11.5c.

promising times ahead I believe :)

[blackcap]

been following that all winter, although like to benchmark with the following:

https://www2.electricityinfo.co.nz/

Solid turnover and price action today by NWF's standards, and current SP of 11.2c is approaching a key breakout area hit in May-16 and Nov-15 of circa 11.5c.

promising times ahead I believe :)

Good thinking. But just be aware, you can use it for output, it is probably not so accurate on pricing anymore as a lot of the future supply of NWF is now hedged. Details of the hedging and pricing are in the Annual Report.

[Well Endowed]

30% hedging, and at a solid av rate. Def worth still worth checking the bulk of their revenue is unhedged.

"We commenced hedging our forward revenues in June. Our objective is to insulate the companyagainst the low electricity prices it has received in recent years. Forward electricity price contractstypically “price-in” a degree of dry year risk; we can benefit from this by forward contracting. As at10 August, the company held forward cover for FY18 for around 30% of average production at anaverage price of around $83/MWh, a substantial uplift on the pricing received for much of thiscalendar year."

[Dassets]

https://nzx.com/companies/NWF/announcements/308035

Powerco asset acquisition settled already.

[BlackPeter]

https://nzx.com/companies/NWF/announcements/308035

Powerco asset acquisition settled already.

Well done - amazing what a difference a capable board can make!

[Well Endowed]

highest its been since early 2013, albeit low volume!

[blackcap]

highest its been since early 2013, albeit low volume!

I see another 100k has come on the offer at 10.8. I am not sure but this could be ACC. They can not have that many to go now if they are indeed selling out.

[Well Endowed]

Solid day for NWF today, a number of small buys pushing the share price up through 12c. seller volume looks to have dried up a bit too. it's fairly patchy after the current offer of 12.9c

[blackcap]

Solid day for NWF today, a number of small buys pushing the share price up through 12c. seller volume looks to have dried up a bit too. it's fairly patchy after the current offer of 12.9c

and there it is, an .85 cent imputed interim dividend. Happy holder.
https://www.nzx.com/files/attachments/267316.pdf

[BlackPeter]

and there it is, an .85 cent imputed interim dividend. Happy holder.
https://www.nzx.com/files/attachments/267316.pdf

Congratulations to holders ... and yes, some people who bought in quite recently (well, in the last 3 years or so) and with the right timing do have a reason to be happy.

Still - it might be appropriate to mention that long term holders lost more than 80% of their capital (more if they only bought in the IPO) - and this is (I think it is now 12 years since IPO) the first return on the dollar they invested per share ...

A true long term investment ...:scared:

[Grimy]

I am an original invertor, but with subsequent purchases my average is 24 cents, so only down fifty odd percent........
Still, really happy to see this first dividend. Hopefully the first of many.

[blackcap]

Really good things going forward by the looks of things.... div announcement with some forward looking stuff...

https://www.nzx.com/companies/NWF/announcements/308399

[JeremyALD]

Really good things going forward by the looks of things.... div announcement with some forward looking stuff...

https://www.nzx.com/companies/NWF/announcements/308399

What's the register date and payment date?

[blackcap]

What's the register date and payment date?

Funnily that was announced Friday afternoon.

https://www.nzx.com/files/attachments/267316.pdf

[JeremyALD]

Funnily that was announced Friday afternoon.

https://www.nzx.com/files/attachments/267316.pdf

Thank you!! I just picked up a few today. First time holder :)

[blackcap]

Thank you!! I just picked up a few today. First time holder :)

Welcome on board and all the best. Here is a site you can use to track our companies performance... http://203.114.161.10/trh.htm

[Well Endowed]

good open today 13.3/13.8c :t_up:

[Soolaimon]

Thank you!! I just picked up a few today. First time holder :)

I just joined you.

[Hectorplains]

I just joined you.

At a 5 year high now

[JeremyALD]

Up 7% today will be interesting to see if it continues or people are getting over excited at the first dividend. Still pretty light volume

[blackcap]

Up 7% today will be interesting to see if it continues or people are getting over excited at the first dividend. Still pretty light volume

For NWF which trades infrequently at best, this is a huge volume and turnover day. Be lucky to have 2 trades on a normal day. Highest daily volume today in the last year as well.

[Grimy]

Pleased I decided to top up at 12.5 yesterday and brought my avg down to 20 cents.

[JeremyALD]

Pleased I decided to top up at 12.5 yesterday and brought my avg down to 20 cents.

Do you think it has a chance of getting to 20 cents grimy? What are your long term thoughts on this one? Interested to hear considering you've been a holder from the beginning and obviously have a lot of knowledge about the industry.

[Grimy]

No particular knowledge about the industry (if I did I probably wouldn't have got in in the first place!). I originally bought in as I like investments with an environmental aspect, and I'm a sucker for home-grown technology-but over the years I haven't done that well with them. I also originally come from Palmy, so had some idea of the wind potential there!
Chances of getting to twenty cents? Who knows, but if the upcoming payment is the first of sustainable dividends then it has a much better chance than a year ago. A very small % of my portfolio, so holding for interest and the hope that the company really has turned the corner.
I wouldn't have topped up if the dividend hadn't been announced.

[blackcap]

No particular knowledge about the industry (if I did I probably wouldn't have got in in the first place!). I originally bought in as I like investments with an environmental aspect, and I'm a sucker for home-grown technology-but over the years I haven't done that well with them. I also originally come from Palmy, so had some idea of the wind potential there!
Chances of getting to twenty cents? Who knows, but if the upcoming payment is the first of sustainable dividends then it has a much better chance than a year ago. A very small % of my portfolio, so holding for interest and the hope that the company really has turned the corner.
I wouldn't have topped up if the dividend hadn't been announced.

Grimy just a word of warning. This dividend may be a one-off, or if not then it will be the last one that is fully imputed.
IF you look at their profit and loss, even with all the cost savings the company may only make about $1million of profit which is quite rich for a company with a market cap in excess of $30m. But, cashflow may be about $3 million because the depreciation of about $2million is very high and that is why I am in.
What it does go to show though, $150 million pumped into a company that only produces about $1m of profit per annum... wind technology is not economically viable.

[Grimy]

Thanks blackcap. Certainly a small player in a part of the power industry that has its challenges. A very small part of my holdings and I stay forever optimistic.........If I'd bought more at five and a half cents like I did in 2014 I'd be happier!

[Well Endowed]

edged back nicely into the 13c range. A pragmatic approach to noise complaints underpins managements new direction and strategy. Seem to be delivering where previous management floundered.

https://www.nzx.com/announcements/310979

[Well Endowed]

steady buying, reasonable volume by NWF's standards historically. Trading up to just below the 5-year high. Wouldn't be surprised to see a slow and steady grind to 15c here over the next 6mths+

[blackcap]

I'm liking the price action on the market this morning. But also liking the wholesale price https://www1.electricityinfo.co.nz/ currently and the last month. Futures on the ASX are up substantially as well and this can only be good for NWF.
But long term these prices are not sustainable, however I like the direction of new management and efforts undertaken thus far to turn NWF into a sustainable profit and dividend generator.

[JAYAY]

I think it is looking good for NWF. The new management team have certainly turned things around. It seems that wholesale prices are significantly higher this year compared to last year so I am really eager to see acquisition of alternative generation capacity ie LPG powered generators, as discussed at the AGM to take advantage of those high prices when the wing isn't blowing. I will certainly be hanging on to my shares.

[Well Endowed]

more solid buying this morning around 14.5c.

It's just my thoughts, but was wondering whether NWF would be on the radar to be snapped up by one of the larger gen-tailers?

- low cost acquisition cost relative to building a wind-farm from scratch ($40m mcap vs ~$100m+ build cost)
- self contained generation incl transmission lines, in one location
- renewable energy
- difficulty in obtaining new permits
- Defered tax losses of circa 75m

[blackcap]

more solid buying this morning around 14.5c.

It's just my thoughts, but was wondering whether NWF would be on the radar to be snapped up by one of the larger gen-tailers?

- low cost acquisition cost relative to building a wind-farm from scratch ($40m mcap vs ~$100m+ build cost)
- self contained generation incl transmission lines, in one location
- renewable energy
- difficulty in obtaining new permits
- Defered tax losses of circa 75m

ssshhhhhh!

[blackcap]

Going from strength to strength... If fact this is amazing. Well done to board and management.

https://www.nzx.com/announcements/312167

[Poet]

Yes, what great results the directors have delivered this year. Well done to the new team and long
may it continue!

[Well Endowed]

managing to deliver on all their objectives. What a refreshing change!:t_up:

Honestly (sorry blackcap :p) I think we'll be seeing a takeover in 2018. The recent NZ Govt commitment relating to Carbon neutrality in 2050 and all the reasons I listed above seems to make it a no-brainer..

Good luck to all holders in 2018

[blackcap]

managing to deliver on all their objectives. What a refreshing change!:t_up:

Honestly (sorry blackcap :p) I think we'll be seeing a takeover in 2018. The recent NZ Govt commitment relating to Carbon neutrality in 2050 and all the reasons I listed above seems to make it a no-brainer..

Good luck to all holders in 2018

No worries... I think you are right about the takeover in 2018, its a perfect add-on to some other generator. The new govt will be helping NWF as well.
Tis a no brainer for me as well, but with recent initiatives by management and future prospects its a compelling case in its own right.
Interesting trading action the last few weeks too.

[Food4Thought]

I'm considering NWF. A little risky? How does a P/E of 62 make for a good investment? What is the potential for the value of this company and a likely (realistic) price for their shares if the company was to be bought out.

Disc. Not a holder

[blackcap]

I'm considering NWF. A little risky? How does a P/E of 62 make for a good investment? What is the potential for the value of this company and a likely (realistic) price for their shares if the company was to be bought out.

Disc. Not a holder

That PE of 62 is an historic PE, and as such not too much should be put on that. Looking forward I think its the cashflow that is what an investor would be looking for. The company has made a lot of savings in the last year and these should flow through to the bottom line this year so that they may make a profit that is reasonalbe (say PE of 25) In addition depreciation makes up about $2m of the profit but this does not affect the cashflow so that is why I am in amongst other reasons as outlined above.

[Well Endowed]

15.2c this morning. solid volume through. Think 2018 could be a very interesting year....:t_up:

[blackcap]

15.2c this morning. solid volume through. Think 2018 could be a very interesting year....:t_up:

Just traded 200k at 17 (well an off market one) and there is a bid for 100k at 16!

[JeremyALD]

Is it because of broker recommendations? I have a very small share of these but interested in picking up a few more.

[JAYAY]

Is it because of broker recommendations? I have a very small share of these but interested in picking up a few more.

There has to be a reason. Takeover offer coming up maybe?

[blackcap]

Is it because of broker recommendations? I have a very small share of these but interested in picking up a few more.

I doubt there would be brokers following NWF with its small market cap. So not sure what today's action is all about but could be a thought of a TA in the making or someone wants them as an add on... (just purely speculation at this point, its not the wind that is doing this action as there is no wind the last 2 weeks)
http://203.114.161.10/trh.htm

[JeremyALD]

I doubt there would be brokers following NWF with its small market cap. So not sure what today's action is all about but could be a thought of a TA in the making or someone wants them as an add on... (just purely speculation at this point, its not the wind that is doing this action as there is no wind the last 2 weeks)
http://203.114.161.10/trh.htm

It was one of the broker picks in the Herald article by Vulcan Capital http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11962632

[blackcap]

It was one of the broker picks in the Herald article by Vulcan Capital http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11962632

Ah sorry, I stand corrected, I thought you meant as in broker coverage being initiated by the large firms where analysts go and work out the value of the stock and publish nice little 5 page reports with DCF models and target prices.

[JeremyALD]

Ah sorry, I stand corrected, I thought you meant as in broker coverage being initiated by the large firms where analysts go and work out the value of the stock and publish nice little 5 page reports with DCF models and target prices.

Nothing to be sorry about at all! You're right about coverage. Long may the upward trend continue. Amazing how much difference a new board and leader can make.

[freebee]

Forget the brokers , don't underestimate the power of SylvesterCat's new 2018 ST stock picking competition- a motley but brave few of us have NWF in there and boom ! ;)

[peat]

It was one of the broker picks in the Herald article by Vulcan Capital http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11962632

They were the only broker that lost money based on their 2017 yearly forecast

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11962667
(http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11962667)
Vulcan Capital, the only broker not to make a positive return, saw an 84 per cent return on NZ King Salmon but was hit hard by negative returns for Promisia and Pacific Edge.


Vulcan obviously have quite a different risk profile to other brokers as per none of their selection being exactly blue chip , but still - losing money last year is pretty bad so how much faith you want to put in their forecasts I will leave to you.

(Disclaimer - I am no longer operating in the broking community,)

I liked NWF in the single cents .... not sure now.... the answer is blowin in the wind



Not exactly the right place but for interest here are the brokers returns as per above article
9380

[percy]

I note trend setting broker Equity Research's tips have not been published .
Any idea what they may have picked.?

[peat]

I note trend setting broker Equity Research's tips have not been published .
Any idea what they may have picked.?
You mean Investment Research Group perchance?
No I dont know Percy, not affiliated anymore.

[Dassets]

I doubt there would be brokers following NWF with its small market cap. So not sure what today's action is all about but could be a thought of a TA in the making or someone wants them as an add on... (just purely speculation at this point, its not the wind that is doing this action as there is no wind the last 2 weeks)
http://203.114.161.10/trh.htm

Hi

The last 3 odd days haven't had wind but over the past two weeks it isn't true to say there was no wind. There was wind at certain points. You can see this from the NZX daily report which breaks down generation. Gives a guide as to how wind is going generally.

[blackcap]

Hi

The last 3 odd days haven't had wind but over the past two weeks it isn't true to say there was no wind. There was wind at certain points. You can see this from the NZX daily report which breaks down generation. Gives a guide as to how wind is going generally.

Thanks Dassets, that makes sense. I just track the total GW on a weekly basis and my "no wind" sort of meant "not much wind". The last 3 weeks odd have had by my calcs about 1GW per week, which is under the average of 2.5GW per week. But like all things weather this will by cyclical and the month of January may generate 4GW weeks for all I know. Not concerned at all actually and good to see the solid prices for energy in the futures markets. http://www.asx.com.au/asx/markets/futuresPriceList.do?code=EA&type=FUTURE
The price that NWF receive for their power is more important than the output generated as far as total revenue goes.

I also see the snow pack that meridian report is pretty much gone and at all time lows, under minimums which may pose a problem for the hydro generators going forward? https://www.meridianenergy.co.nz/about-us/our-power-stations/snow-storage

[JAYAY]

Hi

The last 3 odd days haven't had wind but over the past two weeks it isn't true to say there was no wind. There was wind at certain points. You can see this from the NZX daily report which breaks down generation. Gives a guide as to how wind is going generally.

Hi Dassets, I have searched the NZX web site but for the life of me I can not find the NZX daily report you referred to. Can you please provide the link. Thanks.

[Dassets]

Transpower shut off the circuit that affected all the Tararua farms for 5 days for heavy maintenance before Xmas. I understand a 1 in 15 year requirement or maybe more. So the numbers are skewed by that outage. What is interesting is the level of thermal generation going on. it is huge especially compared with past years. It looks like the hydro guys are really conserving water and using (expensive) thermal.

As at 1 Jan Meridian had 48Gwh of snow pack vs mean of 793 for this time of the year. The melt can eat into permanent snow btw. Previous 30 year low was 147Gwh. One reason why the ASX NZ futures are where they are at.

[Dassets]

You have to send an email to NZX to get the daily gen report and hydro report. There is some (free) subscription email address somewhere on the NZX site. They then email it to you.

[JAYAY]

Thanks Dassets, Got it. I am on now their list.

[Dassets]

I have done some rough numbers on current hydro storage and it looks like we are sleep walking to a security of supply emergency around May/June. Given the snow melt is already now negative 48Gwh(yes that is right) and we will not get circa 700 Gwh or putting it a different way it is already in the tanks, assume average rainfall profile we get to the 10% line in May/June. Wholesale prices will go bananas. Thermal is already pumping away to try to preserve storage but they will be building up maintenance issues. Even so they have only maintained storage around 81% of average even with gas/coal going for it. If they need to go out before winter then we have a perfect storm possibility. I can see prices at $400-$500 per Mwh reasonably easily.

Interested in any thoughts.

[horus1]

It is raining heavily in the SI. You dont know until after easter. At present it is hype.

[Dassets]

Thanks Horus,

I looked at the 5 day rain forecast before my post and it isn't showing that over the catchment areas. Obviously things can be different to forecast but the catchment areas need more than rain for a few hours.

[Well Endowed]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/313647/273755.pdf

[blackcap]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/313647/273755.pdf

no real surprises there. trucking along.

[Well Endowed]

looks to be continued high spot prices, no real let up in low hydro levels, bodes well for a profitable 2018

[blackcap]

looks to be continued high spot prices, no real let up in low hydro levels, bodes well for a profitable 2018

The hydro levels may have gotten a huge boost today though.... so that may ease pressure on prices. I note spot prices are already a lot lower today than last week. Although that said, the snow storage is looking dire and the geothermal boys may have to stop at some stage for maintenance etc. I see they are still going hard out on coal at Huntly as well.

[Dassets]

To be confirmed. I hear that Pukaki essentially got missed. Flow rates the next few days will tell. The electricity market is currently in a game of chicken however this game can only be resolved by actual rain in catchments

[blackcap]

To be confirmed. I hear that Pukaki essentially got missed. Flow rates the next few days will tell. The electricity market is currently in a game of chicken however this game can only be resolved by actual rain in catchments

And if I am correct, it is Pukaki that is the big driver, Tekapo not so much, and Waikato nearly irrelevant?

Will be interesting to see how the flow rates are in the coming days.

[horus1]

you have to watch hawea and manapouri/te anau as well. you dont know till after easter.

[Jantar]

Hawea has gone up 40 cm and likely to peak about 10 cm higher. That will be around 20 GWh of gained storage. Nice but not significant.

Manapouri and Te Anau are still rising slowly and look to adding another 20+ GWh.

Overall, it is a small increase but not the drought breaker that we need

[Dassets]

Thanks Jantar. That confirms what I heard yesterday. Will be some more flows to come. Doesnt change the risk that by May/June we go into the 10% risk zone imo. We need a stack of rain. Weird that ASX futures are cheaper this year than next. Makes no sense

[Well Endowed]

whoa, looks like Vector just sold out, 63m shares (approx $6m), any thoughts on the buyer...?

[blackcap]

whoa, looks like Vector just sold out, 63m shares (approx $6m), any thoughts on the buyer...?

Interesting that they crossed outside market prices.... thought that was not permissible under NZX rules? Ie they would have to sell down to 10 cents and then do the cross....

As to the buyer... very interesting to see who is on board!

[Well Endowed]

Nice 10c, a pretty good price for the buyer (in my view). interesting that Vector would hold as long as they did then bail.. I guess the board shakeup and lack overall influence has impacted the decision to sell out?

[JeremyALD]

Goodness me. That's a massive discount. Why even bother selling out for 6m? A bit strange. Good riddance to Vector anyway, they have done nothing for this company.

[blackcap]

Nice 10c, a pretty good price for the buyer (in my view). interesting that Vector would hold as long as they did then bail.. I guess the board shakeup and lack overall influence has impacted the decision to sell out?

Not sure about Vector's intent here. Could be a bit of pressure on the SP for a while as it said a variety of parties (unknown to Vector) got the shares at 10 cents. Or it could be one or two parties with more hands on involvement. But if its a whole host of ppl some may take the easy 40% and run.

[JeremyALD]

Not sure about Vector's intent here. Could be a bit of pressure on the SP for a while as it said a variety of parties (unknown to Vector) got the shares at 10 cents. Or it could be one or two parties with more hands on involvement. But if its a whole host of ppl some may take the easy 40% and run.

Bloody vector

[black knat]

At least one broker is placing shares with clients.... so looks like it will be a bunch of retail investors.

[blackcap]

At least one broker is placing shares with clients.... so looks like it will be a bunch of retail investors.

Which tends me to believe that that will put pressure on the SP. But it does open up the register if someone is inclined to "go for it".

[Well Endowed]

liquidity has always been a bit of a factor on anyone looking at a serious holding. Nothing worse than pushing it down 20% just to sell out a circa $25k position. Could be good in the long run.

[Dassets]

All sold in minutes

[JAYAY]

Goodness me. That's a massive discount. Why even bother selling out for 6m? A bit strange. Good riddance to Vector anyway, they have done nothing for this company.

Can anyone explain why they would sell up at 10c when the market price was up over 16c. Why flood the market instead of selling progressively at a higher price.

[fish]

Can anyone explain why they would sell up at 10c when the market price was up over 16c. Why flood the market instead of selling progressively at a higher price.

I dont know the reason
I do know that Vector could have some kind of insider or trade knowledge-there is a possibility that something doesnt bode well for NZ windfarms-I had been thinking of buying after I get some dividend payments from mercury-will reconsider doing so as now clearly a higher chance of losing capital

[blackcap]

I dont know the reason
I do know that Vector could have some kind of insider or trade knowledge-there is a possibility that something doesnt bode well for NZ windfarms-I had been thinking of buying after I get some dividend payments from mercury-will reconsider doing so as now clearly a higher chance of losing capital

I do not see how Vector have had any inside knowledge. Vector have had no board representation or even at executive level for the last year so I do not even count them as an insider. However I do think there may be some short term SP weakness as those that got shares at 10 cents look to lock in some profits. That is if the bids allow on Monday.

[black knat]

I bought some yesterday at 10c. Had to make a quick decision and haven't followed the company. Thinking I'll put them in the kids portfolio (long term investments) at this stage. I have no doubt others in my position will be selling out for a quick gain and in an illiquid market I think you will see the share price at 12c or lower until the backlog is cleared. Good opportunity until if you like the company.

Just another thing ... driving past Tekapo at the weekend it was as full as I have ever seen it with water spilling down the Tekapo river. Not sure what that means as don't really have a good understanding of the market at this point.... will have to get up to speed!

[JoeGrogan]

I do not see how Vector have had any inside knowledge. Vector have had no board representation or even at executive level for the last year so I do not even count them as an insider. However I do think there may be some short term SP weakness as those that got shares at 10 cents look to lock in some profits. That is if the bids allow on Monday.

i don't think they do either, and if they do it certainly conflicts with my industry information ;)

[fish]

i don't think they do either, and if they do it certainly conflicts with my industry information ;)

I just dont know why they would sell below market value-in fact a massive discount to the market.
Just thinking of possible reasons and not feeling comfortable with the ethics of some companies-eg apple

What is your industry information?
Shouldnt we all know about it?

[blackcap]

I just dont know why they would sell below market value-in fact a massive discount to the market.
Just thinking of possible reasons and not feeling comfortable with the ethics of some companies-eg apple

What is your industry information?
Shouldnt we all know about it?

For Vector this stake is a drop in the bucket. Vector did not announce anything to market themselves (ie we have sold our stake in...)

To sell such a large holding can sometimes mean you need to accept a discount to market price. 10 cents is probably what their broker told them they could liquidate at. If they wanted to sell on market with the amount of turnover that NWF has it would take them years. So they probably thought to hell with it and lets just do it all in 1 go. I do not have a problem with it and as a long term NWF holder I think this will be good for NWF in the long run.
Remember Vector did/does have egg on their faces with this holding in that all their representatives pretty much got booted off the board/voted out and their influence was made non existent.

[Poet]

For Vector this stake is a drop in the bucket. Vector did not announce anything to market themselves (ie we have sold our stake in...)

To sell such a large holding can sometimes mean you need to accept a discount to market price. 10 cents is probably what their broker told them they could liquidate at. If they wanted to sell on market with the amount of turnover that NWF has it would take them years. So they probably thought to hell with it and lets just do it all in 1 go. I do not have a problem with it and as a long term NWF holder I think this will be good for NWF in the long run.
Remember Vector did/does have egg on their faces with this holding in that all their representatives pretty much got booted off the board/voted out and their influence was made non existent.

All good points. I also think that Vector took the removal of their reps very personally (or at least those reps themselves seem to have). What other reason would they have had for voting against last year's proposal to buy out the onerous powerco lease?
I picked up some more yesterday at 10c in the selldown but don't mind declaring here that I would have paid more (and bought more) than I did had I been offered the opportunity. I think that Vector wasn't really trying to maximise their price but probably rather got more satisfaction from seeing the effect of dropping their shares cheaply (since the vector decision makers weren't playing with their own money at the end of the day, why not have some fun and extract a little bit of utu at the same time).

I'm of the opinion that most, if not all, of the previous problems that besieged NWF were directly attributable to the litigiousness and arrogance of the previous board and management. It doesn't surprise me that given those same personality flaws and overblown egos are still in control at Vector, we see these bizarre decisions.

Good riddance I say.

[BlackPeter]

All good points. I also think that Vector took the removal of their reps very personally (or at least those reps themselves seem to have). What other reason would they have had for voting against last year's proposal to buy out the onerous powerco lease?
I picked up some more yesterday at 10c in the selldown but don't mind declaring here that I would have paid more (and bought more) than I did had I been offered the opportunity. I think that Vector wasn't really trying to maximise their price but probably rather got more satisfaction from seeing the effect of dropping their shares cheaply (since the vector decision makers weren't playing with their own money at the end of the day, why not have some fun and extract a little bit of utu at the same time).

I'm of the opinion that most, if not all, of the previous problems that besieged NWF were directly attributable to the litigiousness and arrogance of the previous board and management. It doesn't surprise me that given those same personality flaws and overblown egos are still in control at Vector, we see these bizarre decisions.

Good riddance I say.

Couldn't agree more. I never really understood what Vectors play was with NWF. Sure, once upon a time (more than a decade ago) they added money when the company needed it. This is how they ended up with their oversized cornerstone shareholding. Maybe they wanted to start a Gentailer business or something like that? But then came the electricity reform and they couldn't ....

However - since adding money they never made anything out of NWF but a mess. They dropped (in my view) unsuitable Vector people both into board as well as into management and used NWF for a long time to extract both trading as well as hosting fees (though I can't really imagine that this was their driver ... peanuts for Vector).

And yes - "arrogant" is a quite good way to describe the attitude of (Ex-)Vector key people, resulting not just in endless litigation with neighbors in windy Palmerston. The NWF CEO had an office rented on Vector premises in Auckland and tried to remote control a site manager in Palmerston North who himself controlled a handful of technicians. This was the company. Inefficient like hell but in all important positions Vector (or ex-Vector) people.

Vector was in this case an excellent example for a cornerstone shareholders with a negative impact. NWF will be better off without them.

Discl: Ex shareholder (and at times quite engaged with board and other shareholders);

[Well Endowed]

looks like a bit more uncertain selling today. I might have to transfer some money across for a topup, I still think NWF longterm +12mths is a no brainer.

[blackcap]

looks like a bit more uncertain selling today. I might have to transfer some money across for a topup, I still think NWF longterm +12mths is a no brainer.

Could go a lot lower for a bit though... once 63m shares come on the market tomorrow..... all bought at 10 cents.

On the other hand, do not know the makeup of these holders, there may be some long term buy holders and or someone with other intent. So its a gamble but I am going to wait for the low 10's and then buy.... if it gets that low.

[JeremyALD]

Goodness will this trigger a price enquiry from the NZX?Down 17% today. I for one will be picking more up soon. Its dropped about 35% since the announcement or vector selling its shares. Just shows how quickly things can turn for a stock with low liquidity.

[BlackPeter]

Goodness will this trigger a price enquiry from the NZX?Down 17% today. I for one will be picking more up soon. Its dropped about 35% since the announcement or vector selling its shares. Just shows how quickly things can turn for a stock with low liquidity.

Price inquiry is only on rapid changes without news. I guess Vector dumping more than 22% of all issued shares in one day at a heavy discount to market price is a good reason for the SP dropping. Even NZX would understand that without additional explanation ;);

More interesting in my view is the question how much the shares are now worth after VCT exited. I think the 16 cents contained already a premium assuming some sort of takeover of the company. Now that the most likely suitor sold out, and given that it appears they found nobody else who is interested (otherwise they would have sold to them at a premium) am I wondering whether maybe 10 cents is all the company is worth as a going concern? At the end, while they own lots of expensive infrastructure (sunk cost), if they generate in good years only one 1 cent per share in earnings and in bad years nothing - who would want to pay more?

Discl: don't hold;

[Jantar]

....

Just another thing ... driving past Tekapo at the weekend it was as full as I have ever seen it with water spilling down the Tekapo river. Not sure what that means as don't really have a good understanding of the market at this point.... will have to get up to speed! One of the generators at Tekapo B had a bit a whoopsie. It let the smoke out of the stator windings. Electrical plant doesn't like it when the smoke escapes, and it could take a few more months to fix.

With Half of Tekapo B station out of service Genesis are unable to let the right amount of water down the canal, so they have to spill it. This spill means the water doesn't get to Lake Pukaki for the Ohau stations either, but it is picked up at Benmore.

[black knat]

One of the generators at Tekapo B had a bit a whoopsie. It let the smoke out of the stator windings. Electrical plant doesn't like it when the smoke escapes, and it could take a few more months to fix.

With Half of Tekapo B station out of service Genesis are unable to let the right amount of water down the canal, so they have to spill it. This spill means the water doesn't get to Lake Pukaki for the Ohau stations either, but it is picked up at Benmore.

thanks Jantar very helpful.

[Dassets]

Price inquiry is only on rapid changes without news. I guess Vector dumping more than 22% of all issued shares in one day at a heavy discount to market price is a good reason for the SP dropping. Even NZX would understand that without additional explanation ;);

More interesting in my view is the question how much the shares are now worth after VCT exited. I think the 16 cents contained already a premium assuming some sort of takeover of the company. Now that the most likely suitor sold out, and given that it appears they found nobody else who is interested (otherwise they would have sold to them at a premium) am I wondering whether maybe 10 cents is all the company is worth as a going concern? At the end, while they own lots of expensive infrastructure (sunk cost), if they generate in good years only one 1 cent per share in earnings and in bad years nothing - who would want to pay more?

Discl: don't hold;

Vector could not be a suitor due to regulatory restrictions.

[fish]

One of the generators at Tekapo B had a bit a whoopsie. It let the smoke out of the stator windings. Electrical plant doesn't like it when the smoke escapes, and it could take a few more months to fix.

With Half of Tekapo B station out of service Genesis are unable to let the right amount of water down the canal, so they have to spill it. This spill means the water doesn't get to Lake Pukaki for the Ohau stations either, but it is picked up at Benmore.

Could this be why vector sold?
Wind may need to be accompanied by a stable source of power?

[blackcap]

Could this be why vector sold?
Wind may need to be accompanied by a stable source of power?

Could you please elaborate on this fish. Genuinely interested and learning all the time. Why would wind need to be accompanied by a stable source of power? Or do you mean to maximise potential revenues?

[blackcap]

More interesting in my view is the question how much the shares are now worth after VCT exited. I think the 16 cents contained already a premium assuming some sort of takeover of the company. Now that the most likely suitor sold out, and given that it appears they found nobody else who is interested (otherwise they would have sold to them at a premium) am I wondering whether maybe 10 cents is all the company is worth as a going concern? At the end, while they own lots of expensive infrastructure (sunk cost), if they generate in good years only one 1 cent per share in earnings and in bad years nothing - who would want to pay more?

Discl: don't hold;

I think you may be slightly off the mark there BP. I never saw Vector as a suitor, rather a blocking stake and am glad they are gone, it does free up the register. Also you are right, the infrastructure is in place, its the cash flow I am after not the (after depreciation) profit. The cash flows with changes made by the board will enable a share price well in excess of 10 cents going forward. Probably a bit of pressure (a lot maybe) in the short term but some good opportunities to top up I feel.

[BlackPeter]

I think you may be slightly off the mark there BP. I never saw Vector as a suitor, rather a blocking stake and am glad they are gone, it does free up the register. Also you are right, the infrastructure is in place, its the cash flow I am after not the (after depreciation) profit. The cash flows with changes made by the board will enable a share price well in excess of 10 cents going forward. Probably a bit of pressure (a lot maybe) in the short term but some good opportunities to top up I feel.

Not sure how you see a company with an average annual revenue around 6 or 7 million dollars (and this is very optimistic - the recent years have been more like 4 or 5) distributed over 288 million shares (i.e. a bit more than 2 cents revenue per share if things go really smooth) to produce in average over many years more than 1 cent free cash flow per year and share. I guess you can cut the cost only so far - and even if you ignore writing off the concrete infrastructure, generators and blades will need not just maintenance but as well replacement - you can't just distribute this money.

Add to that, that the income is highly irregular (they used to remind us frequently that they neither control the wind nor the electricity prices) - i.e. just let global warming change the prevailing winds, or the cost of solar keep dropping (impacting on prices) - and I don't know where you see a fair PE for this share. Its certainly not like the sky being the limit - isn't it?

Sure - we only need regularly more and consistent wind in Palmy at the times the NZ electricity network has high demand in combination with much higher power prices and there won't be any issues. How hard can it be?

But anyway - happy to see this company make more money than I expect. At least they have now a board worth its salt. All the best to all holders.

I put my money where my mouth is (not holding anymore), but hey - if there is some anti endowment effect (confirmation bias?), than maybe this is clouding my judgement.

Just one other question (pure curiosity) - why do you think Vector would have wanted to block a takeover of NWF if they would not have been interested themselves? I guess NWF is such a small fish (and unreliable supplier) in the NZ electricity industry that I don't know why a juggernaut like Vector would care.

[blackcap]

Not sure how you see a company with an average annual revenue around 6 or 7 million dollars (and this is very optimistic - the recent years have been more like 4 or 5) .

When you start with obfuscation then I will not respond to the rest. (I think you just did not do the homework and thought it was 4m-5m but maybe you see that its not as bad as you think)
Revenues in recent years
2013 $6.9m
2014 $6.8m
2015 $7.6m
2016 $7.2m
2017 $5.9m
2018 on track for $8m or thereabouts

So I do not see how recent years closer to 4-5 makes any sense.

[BlackPeter]

When you start with obfuscation then I will not respond to the rest. (I think you just did not do the homework and thought it was 4m-5m but maybe you see that its not as bad as you think)
Revenues in recent years
2013 $6.9m
2014 $6.8m
2015 $7.6m
2016 $7.2m
2017 $5.9m
2018 on track for $8m or thereabouts

So I do not see how recent years closer to 4-5 makes any sense.

Strong words ... but yes, you are right, I managed to read the wrong line from my spreadsheet and quoted historic cost rather than historic revenue. Mea culpa - though doesn't change anything re the point I was making (anyway assuming a more optimistic revenue for that).

But look - I don't hold and honestly don't care. You obviously do hold and might be a good example for the effects of the endowment effect.

Nothing to learn here for me - I shall move on.

Good luck.

[fish]

Could you please elaborate on this fish. Genuinely interested and learning all the time. Why would wind need to be accompanied by a stable source of power? Or do you mean to maximise potential revenues?

Jantar would be able to explain this better than me
When I was fishing around some offshore wind turbines in Europe a couple of years ago most of them were not in action-despite a perfect 15 knot breeze

[Well Endowed]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/314791/275272.pdf

Salt Funds Management acquired 1/3 (23m) of Vector's shares. still around 40m unaccounted for, will be interesting to see where they end up...

[blackcap]

Jantar would be able to explain this better than me
When I was fishing around some offshore wind turbines in Europe a couple of years ago most of them were not in action-despite a perfect 15 knot breeze

Thanks fish, and yes Jantar if you are around could you please explain. Would be appreciated. I do read a lot of the reports from WITS and Energy link and other publications but its a bit hard to get the head around all of it, not having a background in the energy sphere.

On another note I see SALT has taken an 11% stake, but already had a few so picked up 23m shares at the 10 cents.

[blackcap]

AMP also on the register with 9%.... Thats 51m shares taken care of now.

[Well Endowed]

Some better buying today, and a few bids appearing at the 12.5c level. Will be interesting to see where it goes from here and if Salt is done accumulating. After year's of neglect I get the feeling it could be an interesting next 12mths for NWF holders.

[Well Endowed]

might not be as many floating round with retail investors aiming to make a quick-buck as initially thought..?

[blackcap]

might not be as many floating round with retail investors aiming to make a quick-buck as initially thought..?

Well as I mentioned earlier, Salt and AMP took 51m, so only 12m to go.... That is not many at all. Probably why the SP is going up again today.

[black knat]

Well I got 700,000 and don't intend to sell.

[Jantar]

.... and yes Jantar if you are around could you please explain. ....
I shall do my best, but may take more than one post. I am on the road this week and have just arrived in Picton, so have plenty of time before my ferry crossing tomorrow morning.

The NZ Electricity market is a bit different to other electricity markets around the world. We operate in a single time zone, and unlike almost all other markets we cannot share generation with other time zones. Here most people arise each morning within a short period of time, say 6:00 am to 8:00 am; the work day begins between 7:30 and 9:00; lunch is between 12:00 and 2:00; most finish work between 430 and 6:00; Dinner is anywhere between 5:00 and 8:00; and people start drifting of to bed around 10:00 to 11:00 pm.

Overnight national demand may be as low as 3000 MW, over the morning peak it may rise as high as 6000 MW with most of this demand coming on within a 2 hr window. Mid afternoon it can drop down to 4500 MW, climbing again to 5000 in summer or 7000 in winter. This pattern is well known and understood, and as a result demand can usually be covered with existing generation. Because we are in a single time zone the electricity supply has to follow that same pattern. Whereas in a larger market such as USA, the overnight trough on the west coast is balanced by morning peak in the mid west, while the eastern time zones are in the afternoon trough. Thus USA does not see a 100 - 120% swing from times of low demand to times of high demand, but barely a 25% swing. Europe is even better and hardly sees any peaks at all.

Because of this volatility in NZ, our market works on 48 half hour trading periods with all generators offering their generation into the market in up to 5 tranches. These tranches are at a price for X MW, a higher price for the Y MW etc. for each half hour throughout the day
Demand at some nodes is estimated by Transpower, but at some nodes with large loads, called non conforming nodes, the demand is bid for. At the point that offered generation quantity meets demand quantity, the price is set by that offered generation for that half hour. All generation offered at prices below the discovered final price receive that price. Actual prices are calculated every 5 minutes to enable Transpower to dispatch changes to generation in a dynamic fashion, and this is where wind generation gets treated differently to other forms of generation. Once dispatched All generators, except for wind, must comply with that dispatch to within 5 MW or 5% of their dispatch, whichever is lower, and generators that fail to comply are likely to be penalised by the EA. Wind has a dispensation from that requirement, and only has to offer their best estimate, but with no penalty for failing to meet it. Wind also gets to offer all of their generation at $0.01, so will be dispatched in preference to other forms of generation.

Different types of generation have different characteristics that helps to determine their offer price and where they will fall in the stack.

Geothermal, is NZ's equivilent to nuclear. It is brought on load, raised to maximum output, and left there. Trying to reduce generation on geothermal plant is not just a matter of reducing the steam going through the turbine, The wells in the steamfield also have to be reduced in flow, and this results in silica and other solids blocking the pores of the well, and means that a well that has been reduced kn steam flow, will not come back up to full production. Geothermal is offered at either $0.00 or at $0.01, so it is always first dispatched.

Run of river Hydro is next. Usually RoR hydro has a small amount of storage in its head ponds, but if not utilised in a short time it will be spilt, so this is usually offered at a low price in 2 tranches. First tranche at a few cents as this is water that will be spilt if not used now, and the second tranche at around the SRMC.

Gas fired Generation has to nominate its gas requirements to the gas market a week ahead, then confirm that requirement with adjustments a day ahead. That gas then effectively becomes take or pay. There are huge penalties for not using it, but at times more gas can be purchased at a higher price at short notice, 4 or more hours ahead. Therefore committed gas generation is offered at a low price, while that extra gas is offered at either SRMC if a company is short in its generation book or at a higher price if long.

Stored Hydro generation, or hydro that uses water from storage lakes, is usually priced in such a way to make a company neutral in its portfolio, with additional water from headponds being priced at its scarcity value. Often this water must be released from lakes into canals or rivers many hours before it is needed. In the case of Hawea water it is 12 - 24 hours lead time before the water can be used at Clyde. For the Pukaki Canals it is around 4 hours lead time. Water from Taupo can be used at Aratiatia within 3 hours, but it is another 12 hours before it is available at Ohakuri, and almost 24 hours later before it finally passes through Karapiro.

Then there is wind. Cheap to generate, and unpredictable. At times we have seen wind differ from its offered amount by over 200 MW. When it is down by that amount where do we get the extra generation from? It is unlikely to be from Gas as that gas had to nominated and bought the day before. So that leaves hydro headponds at whatever that scarcity value is. When the wind ends up stronger than forecast then once again gas cannot back off without risking penalties, so it is hydro that has to accommodate that wind generation. This is OK for short periods and small amounts, but if it is a large amount and headponds are full then hydro will spill water. This has happened a number of times in recent years.

Therefore the best mix for wind is where it can be closely matched with hydro generation that has lots of storage, and no or little lead time. A perfect example is White Hill wind with Manapouri generation, or Mahinerangi wind with Waipori generation.

[Elles]

Very interesting overview, thanks Jantar!

[garfy]

Many thanks for that Jantar. The best explanation I have had of the rather convoluted power supply position in NZ.

[blackcap]

Thanks a lot for the detailed reply Jantar. That has been very enlightening and educational. I will re-read this morning and continue to do research but this has helped a lot explaining the system in aggregate rather than from an individual generator perspective.

[Well Endowed]

https://www.nbr.co.nz/article/vector-posts-25-first-half-profit-drop-technology-earnings-disappoint-jr-213190

Vector Underperforming, might well have prompted rationalisation of noncore assets?

[blackcap]

Cant complain really, just went and bought some more today...

NWF
28/02/2018 13:27
GENERAL
NOT PRICE SENSITIVE
REL: 1327 HRS NZ Windfarms Limited

GENERAL: NWF: NZ Windfarms announces strong half year result

NZ Windfarms announces strong half year result on the back of successful 2017
strategic initiatives

28 February 2018

NZ Windfarms released half year results today. Total revenues for the
Palmerston North based merchant wind generator were $4.3m yielding an EBITDA
of $2.0m for the half year to 31 December 2017. The result follows the
successful implementation of a number of key strategic initiatives for the
company through 2017. In October, the organisation paid a $2.45m full
imputed maiden dividend.

Over the last twelve months the company has embarked upon an ambitious
cost-out programme, focussed around curtailing turbines in aggressive wind
conditions. This has dramatically reduced the level of turbine mechanical
wear and failure, reducing direct and labour costs. Regulatory relief was
obtained permitting the company to respond to market pricing, and the hedging
of forward revenues has proven successful in baselining income. In
September, the company successfully purchased electrical assets that were the
subject of a costly finance lease, yielding savings of c$700k/annum and
introducing long term debt into the business, building management rigour. A
senior leadership role was also disestablished in late 2017. In December,
the company brought long-standing noise litigation issues to a close through
the adoption of new operating controls on three of the company's 96 turbines.

Board Chairman Rodger Kerr-Newell noted the significant progress made by the
company in the last twelve months. "We promised our shareholders that we
would change this company for the better, and we are now seeing tangible
financial benefits from the initiatives we have put in place." Kerr-Newell
noted that by Christmas the company had completed all its "internal"
reconfiguration objectives. "We can now turn our attention to the critical
external initiatives that will further transform this company," said
Kerr-Newell.

CEO John Worth, who has been with the organisation for just twelve months,
noted that the strong half year outcome was the icing on the cake on a very
busy year. "Our whole team has been working extremely hard in optimising the
performance of our wind farm. To see this work reflected in our financial
results, alongside the improved social outcomes we have achieved with our
resource consents, are great outcomes for the company, our shareholders and
for our community. We sincerely thank all our stakeholders for their faith
in us over the last twelve months."

The company notes that with the 2017 strategic initiatives continuing to bear
fruit and with the current state of the market, all other things being equal
the company is on-track for a good full year result.

For further information contact:

John Worth
Chief Executive Officer
+64 21 800 310
End CA:00314884 For:NWF Type:GENERAL Time:2018-02-28 13:27:23

[blackcap]

This is huge:

We continue to evolve our dynamic curtailment regime that governs how the turbines operate, essentially protecting them
from high-wear turbulent wind conditions. After extensive engagement through 2017, we obtained some operating relief
from the industry regulator, the Electricity Authority, which permits us to curtail in response to wind conditions and price.
In December, we put a multi-axis version of thisin place, and now every turbine on the wind farm “decides” when to operate
based on a range of wind parameters and price. In the first half of the year we have not had a single gearbox failure,
compared to a six-month failure rate of 6 in the previous year; it is clear to us we have really moved the dial on reducing
mechanical costs.

[Well Endowed]

I find this interesting too:

"Our new capital structure eliminates laziness from our balance sheet and prepares usfor further acquisitions."

[jonu]

This has always been a feel good investment that didn't pay.
It looks like they have finally turned that around and another form of environmentally friendly power generator will finally make a dollar.

[fish]

Its difficult not too buy at current prices.
We need more environmentally friendly generation.
However dirty deals are being done.
Meridian have just done a deal with genesis that allows coal to be burnt until 2030.
Clean coal will just never exist despite claims to the contrary.
A bit of green COALition political power needs to be brought into this power game.

[Grimy]

I bought some more today. I know the general consensus on averaging down, but it's worked for me in the past. Hopefully will in this case too long term.

[Jerry]

Vector flogged off their entire holding a few days ago. Then SALT and AMP jumped in to buy on 27th. Then the results are announced on 28th.
Why does this seem cockeyed?

[Elles]

Vector flogged off their entire holding a few days ago. Then SALT and AMP jumped in to buy on 27th. Then the results are announced on 28th.
Why does this seem cockeyed?
Looking at the amount of shares they bought them off Vector. Not sure why Vector decided to sell before the announcement, I guess they didn't care enough to wait.

[blackcap]

Vector flogged off their entire holding a few days ago. Then SALT and AMP jumped in to buy on 27th. Then the results are announced on 28th.
Why does this seem cockeyed?

I may have been wrong in my initial analysis. It seems that Salt and AMP are one and the same..... so 21m shares taken up by this entity and then another 40m odd outstanding amoungst a bunch of entities with less than 5%.

[ratkin]

"In December, we put a multi-axis version of this in place, and now every turbine on the wind farm “decides” when to operate
based on a range of wind parameters and price. In the first half of the year we have not had a single gearbox failure,
compared to a six-month failure rate of 6 in the previous year; it is clear to us we have really moved the dial on reducing
mechanical costs.!
The Machines now down tools when it is windy. No wonder the gears are not failing, as they are doing nowt. A positive spin.
Worded with a cynical pen the following could be true.

Due to the terrible design of our wind turbines we have discovered they make more money when not actually operating in the windy environment they were supposedly designed for. It is far more cost effective to have them sitting idle, as the pittance they were producing was outweighed by the cost of repairing them everytime there was a gust of wind..

[blackcap]

"In December, we put a multi-axis version of this in place, and now every turbine on the wind farm “decides” when to operate
based on a range of wind parameters and price. In the first half of the year we have not had a single gearbox failure,
compared to a six-month failure rate of 6 in the previous year; it is clear to us we have really moved the dial on reducing
mechanical costs.!
The Machines now down tools when it is windy. No wonder the gears are not failing, as they are doing nowt. A positive spin.
Worded with a cynical pen the following could be true.

Due to the terrible design of our wind turbines we have discovered they make more money when not actually operating in the windy environment they were supposedly designed for. It is far more cost effective to have them sitting idle, as the pittance they were producing was outweighed by the cost of repairing them everytime there was a gust of wind..


You can write what you like but if NWF with their "inept technology" can get their marginal cost of production on a par with other wind operators they have done well. Also what they are doing is curtailing production when the price for power is very low. Sometimes over night the price ranges from $0 to $10MW. But under old regulations they had to operate even in very gusty (hard wind that is not gusting is fine for the gearboxes) or any conditions. Now they can curtail and stop production which is a huge win. The Marginal cost of producing was at about $29 from memory at the last AGM. If the power price is under that it makes no sense to produce as it just contributes to wear and tear. It looks like this new implementation has substantially reduced costs of operation (see HY report) and for some reason has actually increased revenue substantially. It is a win win.
Management acknowledge the turbines may not be the best technology but they are playing with what they have and are doing a stellar job.

[ratkin]

It looks like this new implementation has substantially reduced costs of operation (see HY report) and for some reason has actually increased revenue substantially. It is a win win.
Management acknowledge the turbines may not be the best technology but they are playing with what they have and are doing a stellar job.

I can see how it has drastically decreased costs, but it is the increasing revenue part I am struggling with. How can the turbines be bringing in more money when they are working less. ?

[blackcap]

I can see how it has drastically decreased costs, but it is the increasing revenue part I am struggling with. How can the turbines be bringing in more money when they are working less. ?

They will not bring in more revenue (the HY was a good result due to high power prices), but they are curtailing the costs when the turbines are not bringing in any revenue anyway. So its a win win. So cutting costs and keeping revenues pretty much constant. Hope that makes sense. I said earlier the Marginal cost per MW was $29... which they are looking to drop to $20. So if energy prices are under $29MW it makes no sense to produce, especially if its in times where costs rise because of adverse weather.
Under previous management nothing was ever attempted to improve anything. Or that is the perception I got.

[Well Endowed]

I'd add that the turbine availability (largely as a consequence of less maintenance issues) increased from 95.3 to 98%. When there is wind, it pays to have all turbines ready to go. a gearbox failure impacts more than just the maintenance costs, its the lost revenue whilst it is being repaired.

[Well Endowed]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/315210/275855.pdf

Robert Stone buying $120k worth (at 14.5c) from Southworth.. .