NWF - NZ Windfarms

[turnip]

"Odd" in what way?

Nothing suspicious, only very light volume, but the price had been quite steady trading in a 3% range, and early today trades continued to go through at the top of that range despite going ex 5% div. Why pay $0.144 today when you could have got it for that price or lower with a $0.007 div included any day last week?

It is a surprisingly stable share price compared to other electricity generators. Maybe it is good to be too small to be included in any index sometimes.

[Independent Observer AUNZ]

Nothing suspicious, only very light volume, but the price had been quite steady trading in a 3% range, and early today trades continued to go through at the top of that range despite going ex 5% div. Why pay $0.144 today when you could have got it for that price or lower with a $0.007 div included any day last week?

It is a surprisingly stable share price compared to other electricity generators. Maybe it is good to be too small to be included in any index sometimes.

I see - if the volume was light it may have been some uninformed sharesie investors or similar with open trades. To be fair its a tricky time in the markets right now, can't blame some for having their eye off the ball.

[ratkin]

Upgrade of guidance, turning into a good day

[Arthur]

Profit upgrade. High dividend.Tax losses to use up. Debt being paid down. Renegotiated bank debt at better terms. If this is what a dog looks like I better buy a pound.

[Independent Observer AUNZ]

Shhhhhhhh! This should be our little secret!

[blackcap]

What you all fail to realise is that those in the know would have already been aware of this "Earnings upgrade". You can see how much power is being produced and you also know the price they have contracted for. Unfortunately after the contract is over (about 3 quarters to go) then what is the price they are going to get for their power? Anything below $70 and its tough times again. I may use this opportunity to exit. That said, power prices are remaining stubbornly high so the prospects at Tiwai must be looking good at this stage.

https://www.asx.com.au/asx/markets/futuresPriceList.do?code=EA&type=FUTURE

[Arthur]

Thanks Blackcap. My back the envelope suggests their cashflow breakeven is dropping quite rapidly. I suspect that they may be negotiating extensions to the current buy all agreement. Cable constraints should give some hedge to NI providers when Rio pulls the pin. I think that there is a possibility that the Government might by the smelter at at opportunistic cost with free money.

[Arthur]

Any idea why they have not bought back any shares? Debt is being paid down, cash is flowing in and more efficient for shareholders than dividends from a tax perspective.

[nztx]

Any idea why they have not bought back any shares? Debt is being paid down, cash is flowing in and more efficient for shareholders than dividends from a tax perspective.


Perhaps they are conserving Ca$h for our upcoming May dividend ?

[Arthur]

Cash coming out their ears at the moment. Debt rapidly being paid off and they could have $6 million in cash by the end of June. Buying 5% would be under $2 million.

[nztx]

All good -- coming up 12 months ago - Int Div 1/2 cps paid 10 Jun

[Southern Lad]

Current wind conditions have output at c.40 MW - as high as i’ve Seen it. Mind you, there have been some calm days recently, so I guess it averages out.

http://203.114.161.10/trh.htm

[Arthur]

They should click over 100GWH today. The last few years full year production has only just been above that, so nice to head for a more normal wind run.

[fish]

They should click over 100GWH today. The last few years full year production has only just been above that, so nice to head for a more normal wind run.

If I recall correctly their supply contract is around $90 mw/hr for as much as they can produce-just checked current price is $0.03.
So this is one company that will not have profits affected by corvid-19.

[blackcap]

If I recall correctly their supply contract is around $90 mw/hr for as much as they can produce-just checked current price is $0.03.
So this is one company that will not have profits affected by corvid-19.

That is correct, until the supply contract runs out and that is in about 9 months time..... (but while they have it its a great money spinner)

[Southern Lad]

Link on NWF website to current operating statistics and wind conditions seems to be down.

From what I recall, production levels over the last month or so have been low and unless the last two and a half weeks of the FY20 financial year have optimal wind conditions the EBITDAF guidance of $7.75m to $8.25m issued on 24 March may be under pressure.

[Food4Thought]

Link on NWF website to current operating statistics and wind conditions seems to be down.

From what I recall, production levels over the last month or so have been low and unless the last two and a half weeks of the FY20 financial year have optimal wind conditions the EBITDAF guidance of $7.75m to $8.25m issued on 24 March may be under pressure.

Some news in the near future?
Many tracking this one of late?

[nztx]

Some news in the near future?
Many tracking this one of late?

Yes .. would expect so in late August

Last year saw a flurry of announcements - starting with their Sell contract for production going through to Final Div
plus an Interim Div for Sep/Oct Payment. A lot less less this year in announcements to date

[Food4Thought]

Yes .. would expect so in late August

Last year saw a flurry of announcements - starting with their Sell contract for production going through to Final Div
plus an Interim Div for Sep/Oct Payment. A lot less less this year in announcements to date

Good point NZTX, Yes a flurry, some coordination of announcements and investor relations could also help this business gain additional investor confidence.

Not too long to go now 👌🏻

[nztx]

Good point NZTX, Yes a flurry, some coordination of announcements and investor relations could also help this business gain additional investor confidence.

Not too long to go now ����

Not wrong there .. the announcement (if when it comes) may well sneak past many

A dividend paying share -- it's surprising the Sharesies crowd haven't taken more interest
(even if there are no Imputation credits - so basically 33% Div W/Tax)

The price & indicative past dividend yield certainly cant be sneezed at, for those who dont
mind copping the full 33% Tax grab taken out

(It still looks good against current Bank Deposit rates - @ whatever they've now slipped down to )

Discl: Holder

[Food4Thought]

Not wrong there .. the announcement (if when it comes) may well sneak past many

A dividend paying share -- it's surprising the Sharesies crowd haven't taken more interest
(even if there are no Imputation credits - so basically 33% Div W/Tax)

The price & indicative past dividend yield certainly cant be sneezed at, for those who dont
mind copping the full 33% Tax grab taken out

(It still looks good against current Bank Deposit rates - @ whatever they've now slipped down to )

Discl: Holder

Sometime in the very near future is the date for information release.

Not sure what day, yet looking forward to see this.

[nztx]

Sometime in the very near future is the date for information release.

Not sure what day, yet looking forward to see this.

Yes .. likewise

An annoucement can't be far away now..

[Getty]

175% increase in nett profit & strong div should put a few smiles on dials

[nztx]

And it's here this arbo -

Further 0.7 cps Div Ex 10/9/20 & Pay 22/9/20

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/358915/329638.pdf

Reports FY 30/6/2020 -

https://www.nzx.com/announcements/358914

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/358914/329665.pdf


Distributions:

"Over the past year, the Board has continued to transform the Company into a stable income producing
asset for its shareholders.

Today the Board is pleased to announce a 0.70 cps unimputed dividend to be paid 22 September 2020.
Details are included in the accompanying distribution notice.

In addition, the Board has paid a 0.40 cps unimputed dividend on 1 October 2019 (pcp: nil) and a 0.70
cps unimputed dividend on 19 March 2020 (pcp: nil).

This brings the total unimputed dividends paid related to the full year reporting period to 1.80 cps (2019:
1.05 cps)."

[nztx]

Could be a runaway next week

Why is this one still sitting @ circa 13.7 - 14.0 c SP ? ;)

[Getty]

should get a tailwind behind it from now on.

[Getty]

and its clean & green.
What is there not to like?

[nztx]

and its clean & green.
What is there not to like?


the only things I can see are the infrastructure may be getting on it's economic life
& secondly the tax man takes a 33% DWT swipe out of the action with no Imputation credits

Barring that - find me a Bank that pays a yield anywhere near today ;)

[Getty]

Interesting timing of ann. tho.
Normally the co's who sneak in results late on Friday are a real can of worms, or a gust of very smelly air.

[nztx]

Interesting timing of ann. tho.
Normally the co's who sneak in results late on Friday are a real can of worms, or a gust of very smelly air.


Have a look at 12 months ago -- see the second Div snuck in there - paid early Oct 2019 ;)

[Getty]

Yes, I collected all of those, so no complaints.

[Southern Lad]

Big question is what the outlook is post 31 December 2020 once the current variable volume fixed price hedge runs out. Assume in the current wholesale electricity market, the current revenue per unit of output will be difficult to replicate. Didn't see any comment in today's release that gave any insights. Therefore, be cautious buying on the strength of the current dividend yield.

[ratkin]

Great result, only wish I owned more of them. Only downside is that bits fall off in the wind. Below industry average on reliability, but still have done very well. Record prices etc for the electricity, but can that be maintained?

[nztx]

Big question is what the outlook is post 31 December 2020 once the current variable volume fixed price hedge runs out. Assume in the current wholesale electricity market, the current revenue per unit of output will be difficult to replicate. Didn't see any comment in today's release that gave any insights. Therefore, be cautious buying on the strength of the current dividend yield.


I see a section where this to be renegotiated in the reports released today

- From the CEO's Report - Page 8 in the 2020 Accounts:

'Variable Volume Fixed Price Agreement

We will look to renegotiate our VVFPA
over coming months. We are confident
this mechanism continues to be the best
way to manage electricity price risk for
our business. However an inflection point
exists, where below a certain price level,
the Board would favour other electricity
price hedging tools and strategies over a
VVFPA. '



Sure - there may be some risks with Tiwai potential closing etc on the sector, but I cant see domestic demand & in the NI
particularly declining. The excess Tiwai production is at the wrong end of the other island, so effect may be minimal

[nztx]

Great result, only wish I owned more of them. Only downside is that bits fall off in the wind. Below industry average on reliability, but still have done very well. Record prices etc for the electricity, but can that be maintained?

Good points .. The Board need to be congratulated on the NWF results achieved over the past year

[Arthur]

They regularly replace the moving components so should last a long time. Blades may be an issue at some stage, but I doubt replacing them will be uneconomic.

[ratkin]

They regularly replace the moving components so should last a long time. Blades may be an issue at some stage, but I doubt replacing them will be uneconomic. Yeah and it is not like they will all fail at the same time, should not be too difficult to keep them spinning.

[Southern Lad]

I see a section where this to be renegotiated in the reports released today

- From the CEO's Report - Page 8 in the 2020 Accounts:

'Variable Volume Fixed Price Agreement

We will look to renegotiate our VVFPA
over coming months. We are confident
this mechanism continues to be the best
way to manage electricity price risk for
our business. However an inflection point
exists, where below a certain price level,
the Board would favour other electricity
price hedging tools and strategies over a
VVFPA. '



Sure - there may be some risks with Tiwai potential closing etc on the sector, but I cant see domestic demand & in the NI
particularly declining. The excess Tiwai production is at the wrong end of the other island, so effect may be minimal

Thanks for the CEO Report extract TX. Sounds to me that there is an inherent warning that the pricing available for a new VVFPA might not be attractive and NWF might need to look at other hedging products. The variable volume aspect of the current hedge removes a lot of risk, whereas with a fixed volume hedge the uncertainty of wind conditions and turbine reliability can mean that NWF comes unstuck.

i’m no expert but some of the future NI pricing in the market publications like the one below don’t fill me with confidence that a new VVFPA will be at the same price as the existing one that only has four months to run.

https://www.energylink.co.nz/sites/default/files/Energy%20Trendz%20137%20Aug-20.pdf

[Southern Lad]

The continued sell down by large shareholders, including those who sit in the board, raises the question as to whether other shareholders should follow their lead.

The current directors have served long suffering shareholders well through improving the hedging arrangements and therefore creating a period of strong operating cashflow. This has enabled good dividends to be paid, albeit not tax efficiently due to tax losses meaning there are no imputation credits available.

Those major shareholders deserve the same opportunity as all other shareholders to sell down their shareholding’s to take advantage of the current trading. However, my read is that its a signal that the future won’t be as rosy.

[blackcap]

The continued sell down by large shareholders, including those who sit in the board, raises the question as to whether other shareholders should follow their lead.

The current directors have served long suffering shareholders well through improving the hedging arrangements and therefore creating a period of strong operating cashflow. This has enabled good dividends to be paid, albeit not tax efficiently due to tax losses meaning there are no imputation credits available.

Those major shareholders deserve the same opportunity as all other shareholders to sell down their shareholding’s to take advantage of the current trading. However, my read is that its a signal that the future won’t be as rosy.

I concur, and till about a month ago was very concerned about futures pricing. But recently the next 4-5 quarters are looking pretty strong so it is possible that they negotiate a relatively positive contract going forward.

https://www.asx.com.au/asx/markets/futuresPriceList.do?code=EA&type=FUTURE

[Arthur]

Mr Lennon bought 14,000,000 5 years ago at under 6 cents a share. It may just be that he is locking in some gains, who knows what the market will bring to any company in the next few years. It is the same with the other directors (who have specified trading windows)

[nztx]

https://www.nzx.com/announcements/360204

Wonder if an Interim Div could be on the way soon, like was declared last year ?

[Grimy]

It would be nice. On top of today's payment.

[Arthur]

It has been an amazing wind-run this month with around 15GWh produced so far. Revenue for the first quarter should be over $3 million, not as good as last year, but a healthy contribution to cash flow.

[nztx]

A bit of a SP bounce in recent days - does the market know something ?

Perhaps an Interim Div ? ;)

2019/20 Div total based on today's SP = 12.7+ % (Unimputed)

Be hard pressed to find that elsewhere

[tim23]

A bit of a SP bounce in recent days - does the market know something ?

Perhaps an Interim Div ? ;)

2019/20 Div total based on today's SP = 12.7+ % (Unimputed)

Be hard pressed to find that elsewhere

A bounce out of nowhere - I hold the yield and is a great little secret

[Grimy]

But basically just back to where it was a month ago. I topped up at 14 on the 3/9/20.
I'm not wondering about the rise over the past day or two. Rather why the fall off over the past month.

[RTM]

But basically just back to where it was a month ago. I topped up at 14 on the 3/9/20.
I'm not wondering about the rise over the past day or two. Rather why the fall off over the past month.

There were a few more share for sale than usual I think.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/361288/332698.pdf

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/360942/332273.pdf

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/361484/332933.pdf

Supply and demand ?
Well done topping up. I didn't as I wondered if someone knew something I didnt.
We'll see.

[jimdog31]

There were a few more share for sale than usual I think.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/361288/332698.pdf

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/360942/332273.pdf

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/361484/332933.pdf

Supply and demand ?
Well done topping up. I didn't as I wondered if someone knew something I didnt.
We'll see.

I got out cos Don't like seeing that much selldown

[Jantar]

But basically just back to where it was a month ago. I topped up at 14 on the 3/9/20.
I'm not wondering about the rise over the past day or two. Rather why the fall off over the past month. AMP sold off 3 million shares, and Phillip Lennon sold off 4 1/2 million shares.

I bought a few at the same time. Looks like I timed that purchase about right.

[Arthur]

Phillip's line at the AGM was that due to CV19 a number of investment opportunities had cropped up, so he selling down his NWF to takeup the new opportunities. He said he still had confidence in NWF. His remaining shares are free carry after the sale proceeds and dividends, so it will be interesting if he sells out completely rather than retaining shares in a company he is a director in paying 10% per annum in dividends. Either way, he does not have that many left to sell.

[Jantar]

This may explain the sudden rise in share price last week.
https://www.nzx.com/announcements/361654

Very good news for both earnings and cashflow going forward.

[Southern Lad]

Very good news for both earnings and cashflow going forward.

Announcement this morning gave no indications of the pricing achieved on the new VVFPA so a bit early to call it as good news for earnings and cash flow.

Agree the VVFPA makes sense for a small wind generator such as NWF in terms of locking in a fixed price for unpredictable generation volumes compared with fixed volume hedging products. Continued share sales by large shareholders ahead of the finalisation of the new agreement makes me nervous.

[Jantar]

Announcement this morning gave no indications of the pricing achieved on the new VVFPA so a bit early to call it as good news for earnings and cash flow.

Agree the VVFPA makes sense for a small wind generator such as NWF in terms of locking in a fixed price for unpredictable generation volumes compared with fixed volume hedging products. Continued share sales by large shareholders ahead of the finalisation of the new agreement makes me nervous. No, we do not know the details, but we do know the forward price curve. We also know that because of the EA's call on market making rules that the price is unlikely to be more than 10% away from the forward curve.

https://www.asxenergy.com.au/newsroom/market_wrap_nz

[fish]

No, we do not know the details, but we do know the forward price curve. We also know that because of the EA's call on market making rules that the price is unlikely to be more than 10% away from the forward curve.

https://www.asxenergy.com.au/newsroom/market_wrap_nz

Thanks for the insight on pricing .
Possibly a substantial increase then ?

[ratkin]

Announcement this morning gave no indications of the pricing achieved on the new VVFPA so a bit early to call it as good news for earnings and cash flow.

.

I reckon it not very good, last time when they made a really good deal they shouted it from the rooftops.
This time they keep it to themselves, implying they do not want the average shareholder to know.

To me this feels wrong, why should the insider big shareholders have information that we are not party too? Especially at a time when some of them have been selling shares. to me it not a good look

[Jantar]

I reckon it not very good, last time when they made a really good deal they shouted it from the rooftops.
This time they keep it to themselves, implying they do not want the average shareholder to know.

To me this feels wrong, why should the insider big shareholders have information that we are not party too? Especially at a time when some of them have been selling shares. to me it not a good look It is more likely that the counter party does not want it known. Possibly a condition of the agreement is that the details remain confidential.

[Dassets]

I reckon it not very good, last time when they made a really good deal they shouted it from the rooftops.
This time they keep it to themselves, implying they do not want the average shareholder to know.

To me this feels wrong, why should the insider big shareholders have information that we are not party too? Especially at a time when some of them have been selling shares. to me it not a good look

NWF didn't announce the price last time. The announcement that was made just recently is almost exactly the same as last time.

[Jantar]

Now we know why Philip Lennon has been selling down so much.

https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=5506822

[nztx]

This probably explains SP rise of recent -


http://www.sharechat.co.nz/article/42ca3dc9/nz-windfarms-limited-nzx-nwf-vvfpa-document-completion-and-fy2021-ebitdaf-guidance-range.html

NZ WINDFARMS LIMITED (NZX: NWF) VVFPA DOCUMENT COMPLETION AND FY2021 EBITDAF GUIDANCE RANGE

"Variable Volume Fixed Price Agreement (VVFPA)

Further to the NZ Windfarms’ market announcement on 19 October 2020, we are pleased to advise that all documentation and schedules in relation to that transaction have been completed and executed.

FY2021 EBITDAF Guidance Range

As a result of the renewed VVFPA, the Company is pleased to announce its FY2021 EBITDAF guidance range of $5.7m to $6.3m.

While this guidance is below last year’s record EBITDAF of $8.0m it stills represents the second best result NWF has ever faced.

Guidance is provided on the basis of information available to the Board at this time and is subject to variations such as climatic and other factors outside of the Company’s control. Forward electricity generation is based on historical production volumes adjusted for relevant factors. Wind generation can be extremely volatile due to a range of factors outside our control. The Company will update the market on EBITDAF guidance as the financial year progresses. As at 30 November 2020 cash on hand was $3.05m."


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/364288/336551.pdf

[nztx]

The Eagle on the ridge at Palmy has decreed all lucky NWF Holders to be worthy of a further reward:

https://www.nzx.com/announcements/364889

"NZX announcement

For immediate release

NZ WINDFARMS LIMITED (NWF) 0.40 CPS UNIMPUTED DIVIDEND

The Board is pleased to announce a 0.40 cent per share unimputed dividend to the holders of NZ Windfarms Limited shares.

The dividend payment will be paid to shareholders on 31 December 2020, for shareholders who hold shares as at the record date of 5pm on 22 December 2020.

Please refer to the attached distribution notice for further information.

The Board recently completed its second Variable Volume Fixed Price Agreement (VVFPA) and released its FY2021 EBITDAF guidance range to the market.

At year end, the Board retained a cash buffer until such time as the second VVFPA was finalised. Now that has been finalised, the Board feels that it is appropriate to free up that cash for distribution to shareholders.

In addition, the Board is developing a formal dividend policy and is expected to be released next year.

On behalf of the Board and management, I would like to wish everybody a Merry Christmas and a prosperous New Year."

Merry Christmas & a Prosperous New Year to all at NWF ! :)

[Grimy]

Certainly a nice little New Year's Eve div.
Although it had always seemed to be a when, not if, one.

[Getty]

And the fact that they are paying it out of cash reserves, means they are happy the recent offtake renewal is favourable, to replenish the kitty.
These guys know how to generate cash...out of fresh air.
!3% divs in 12 months

[nztx]

And the fact that they are paying it out of cash reserves, means they are happy the recent offtake renewal is favourable, to replenish the kitty.
These guys know how to generate cash...out of fresh air.
!3% divs in 12 months


Recent Divs paid by NWF -

1.05 cps unimputed for the company financial year 2018/2019
1.80 cps unimputed for the company financial year 2019/2020
0.40 cps unimputed so far with latest Div included for current financial year 2020/2021

is pretty good in current low interest environment, even after the 33% IRD's DWT gets deducted out..

Firm dividend policy review in new year may well signal a rerating due by the market out there - who knows.

The 31 December 2020 0.4 cps is reported on NZX distribution notice as 'Quarterly'

'These guys know how to Generate Cash out of Fresh Air' - Very good - it's true ! ;)

[Blendy]

I read that as 40c dividend and my brain exploded

[ratkin]

Why are wind related stocks around the world flying up in price, but NWF never goes anywhere? No sign of expanding or actually doing anything. Is the plan just to let the turbines spin round till they fall off.

[mondograss]

Why are wind related stocks around the world flying up in price, but NWF never goes anywhere? No sign of expanding or actually doing anything. Is the plan just to let the turbines spin round till they fall off.

Dassets might be able to answer that question, but presumably there's little more that can be done (with the current site) other than routine maintenance until they get closer to EoL and then can look at redeveloping the site for newer designs. Or until someone buys them out and does it for them.

[Dassets]

We have said publicly that we are looking at this as an option. We cannot say anything further until we have material information. At AGM s and other announcements we have said that a re power is technically feasible but must be financially viable. A brownfield redevelopment can use other infrastructure that exists. We will keep working on it and when we have have a robust case will report publicly at the first instance. When I have more info I will report. Hope people liked the Christmas dividend, btw the money is shareholders money so why not pay it out

[RTM]

We have said publicly that we are looking at this as an option. We cannot say anything further until we have material information. At AGM s and other announcements we have said that a re power is technically feasible but must be financially viable. A brownfield redevelopment can use other infrastructure that exists. We will keep working on it and when we have have a robust case will report publicly at the first instance. When I have more info I will report. Hope people liked the Christmas dividend, btw the money is shareholders money so why not pay it out

Yes, I will love the Christmas dividend....when it hits my B/A....end of month I think. Thanks.
Appreciate you commenting on the forum. Adds real info rather than speculation.

Have a good Christmas.
RTM

[flyinglizard]

NWF is not my taste, it is like fixed income assets, no growth so far. However, my wife bought hell lot truck of NWF and other three similar type company shares. I asked why you hold so heavily in this one? She said that it is climate change, and she plans to hold it for 4-5 years minimum. Ok.....that is fine..... I would like to pay my tax on my tradings. Maybe I will fail to beat up my wife's long term holding portfolio after 5 years. Actually not too bad if the dividend yield always higher than deposit rate. The management of this company is not bad, although they do not aggressively focus on business growth.

[Jantar]

…., no growth so far..... I wouldn't try and second guess the directors, but it is probably unwise to jump into growth of wind farms just yet. But I bet that the directors are already in the planning stage.

The government have already signalled that they want to decarbonize the electricity industry within 10 years. that means that an average of 1700 MW of wind and/or solar needs to be installed by then. Because of the nett capacity factor of wind being around 40% (solar is around 25%) then around 4250 MW of additional wind capacity is needed, plus extra to cover any growth in demand.

This additional intermittent generation will also require fast start energy storage of at least 50%, or 2200 MW. Wait until MBIE announce their preferred NZ Battery option and that would be the point for any expansion plans to be announced.

(Dassets, who do send the bill for my consultancy fees to? :D )

[Dassets]

Fees?? We are not in that business lol

[Grimy]

Dividend due today and as a bonus nice to see some upward movement in the share price recently.

[nztx]

Dividend due today and as a bonus nice to see some upward movement in the share price recently.


Indeed .. very nice .. thanks to the Team @ NWF - Happy New Year!

[tim23]

Indeed .. very nice .. thanks to the Team @ NWF - Happy New Year!

Invested mine in a dinner out - nice bonus!

[nztx]

A very very strong TAIL wind driving the SP today - boys & girls .. ;)


Discl: couldn't resist joining in the action today ;)

[Food4Thought]

A very very strong TAIL wind driving the SP today - boys & girls .. ;)


Discl: couldn't resist joining in the action today ;)

Fair enough to join this ship.
Some solid winds and good bounty to be had.

Dividend is very solid and has gone under the radar,
seems to be well propelled at the moment

With battery storage, renewable energy and attention on changing our habits, this share could finally be heading back to the thoughts of a few more long term investors.

[nztx]

More tail wind today .. SP climbing towards 20c

[Jantar]

More tail wind today .. SP climbing towards 20c My spreadsheet gives a fair SP of 22c, so still a bit to go yet. This is my 4th largest holding now and only needs another 0.1c rise to be my 3rd largest.

[nztx]

more tail wind today .. up to 19.5c this arbo so far .. ;)

[Getty]

I'm getting blown away..

[Food4Thought]

I'm getting blown away..

Big wind turbines... even greater when the near future arrives and reliable battery storage increases at a cost effective price.

Or pump water up mountains and release it when you need it via a dam/water way

I believe we could put a spin on the old saying a " rising tide raises all boats ..."

[Getty]

My spreadsheet gives a fair SP of 22c, so still a bit to go yet. This is my 4th largest holding now and only needs another 0.1c rise to be my 3rd largest.

When the SP was 14c, I calculated that our capitalisation per MW produced was half of what our neighbours were spending on their new windfarm/estimated MW production, so I wont be surprised to see our SP get to 28c, and still produce 5% div on that price.

Its not the size of our wands that counts, its the magic within.

We dont have to be the biggest, just the best, and I believe we are!

Benchmark, closed today 20c,intraday high 20.5c, $457K turnover.

[tim23]

I added to my modest holding a few weeks back was driving past the farm on way back from Palmerston North and looked to the new farm being built next door and thought these are too cheap!

[Getty]

You sparked up like a volt from the blue, and said watt, I need to charge some up..
All power to you.

[ratkin]

Am a long term holder, but market has gone mad, Energy bubble in progress

[Food4Thought]

Am a long term holder, but market has gone mad, Energy bubble in progress

12183

I decided to Google Energy Bubble

[Grimy]

Now my largest holding and above my average price for the past couple of days. Been a long time coming, but I'm not complaining!

[The Punter]

I'm loving the current NWF ride, but for the life of me does anyone know what became of this boardroom release? I made a note of the shares that were on issue at the time, and that figure hasn't changed since. Two emails to them asking about it have resulted in no replies: 24 July 2019NZX AnnouncementFor immediate releaseNZ WINDFARMS LIMITED (NWF) TO UNDERTAKE ON-MARKET SHARE BUY BACKNWF advises that it intends to undertake an on-market share buy-back programme to purchase up to5% (14,403,179 shares) of its total ordinary shares on issue.Under the share buy-back programme NWF will acquire shares on the NZX Main Board. Shares maybe acquired from 25 July 2019 until 30 June 2020 and all shares acquired will be cancelled.Chairman John Southworth said that the Board considers that returning capital to shareholders is aprudent allocation of capital and a reflection of an improved financial position. Furthermore, the Boardconsiders that buying the Company’s shares at current prices is an efficient use of surplus capacity andwill be value-enhancing for shareholders.The key principles under which the buyback will be executed are summarised below:• Shares purchased will be cancelled on acquisition, and the number of shares on issue reducedaccordingly.• NWF will only buy shares through NZX’s order-matching market during normal trading hours(i.e. there will be no off-market transactions).• NWF will keep shareholders fully informed of material information and monitor compliance withits various information disclosure requirements throughout the buyback period.

[nztx]

Am a long term holder, but market has gone mad, Energy bubble in progress

Find me another listed Bubble on NZX paying such a handsome Div Yield .. ;)

I dont believe there is one, unless ALF mysteriously find Oil or Gold on one of their Managed Dairy lots
or under one of the Saleyards they own to stem the southerly SP drift.. ;)


Now with NWF the prevailing wind & a strong breeze on the other hand can pay very well .. ;)

[The Punter]

The 'Sudden' interest in NWF resulting in the current price is a mystery to me. Yes I know it has a great yield, but its been like that for ages and the share price hasn't budged. I can't believe that investors had a 'Eureka' moment and pulled out the wallet at the same time. Still, its great news for me. Sail on baby.

[wagwan]

The 'Sudden' interest in NWF resulting in the current price is a mystery to me. Yes I know it has a great yield, but its been like that for ages and the share price hasn't budged. I can't believe that investors had a 'Eureka' moment and pulled out the wallet at the same time. Still, its great news for me. Sail on baby.

I'd say there's plenty of holdings that investors have neglected for various reasons on the NZX - OCA and HGH being two recent examples for their own reasons. Doesn't necessarily imply that interest now is unfounded.

HGH is probably a good comparison. Small player in a market dominated by significantly larger operators. Volumes traditionally have been low, and comparatively tiny market cap, with both receiving minimal attention as a result, despite a relatively reliable and high-yielding dividend.

OCA model just not particularly well understood by general investing public, or probably - until recently - brokers too.

Aside from that, would assume that on surface level interest is on the back of MEL / CEN / TLT movements, increased attention on green investing and ETFs, and in more of a round-about way, Biden win.

For those looking a bit below the surface, new VVFP contract provides a degree of revenue certainty to Dec-2021, and Tiwai commitment for another two years is positive for wholesale pricing at next renegotiation as will support wholesale pricing from a demand perspective.

Both of which support dividend strong yield at current SP range for a further 12-24 months. Assets have useful life of at lease 10+ years without maintenance, which we know is being completed as per annual reports.

Maybe why it's becoming all aboard.

[The Punter]

These babies don't seem to have a stop button. 21.5 must be a record high surely? Keep on rockin baby.

[ratkin]

The 'Sudden' interest in NWF resulting in the current price is a mystery to me. Yes I know it has a great yield, but its been like that for ages and the share price hasn't budged. I can't believe that investors had a 'Eureka' moment and pulled out the wallet at the same time. Still, its great news for me. Sail on baby.

Thinly traded, and because you can buy more shares for a dollar than most other companies, the newbies think it is cheap. Yet another sign the market has gone mad.

[tim23]

Thinly traded, and because you can buy more shares for a dollar than most other companies, the newbies think it is cheap. Yet another sign the market has gone mad.

Maybe but the dividend yield still stacks up okay.

[Grimy]

These babies don't seem to have a stop button. 21.5 must be a record high surely? Keep on rockin baby.

They were $1.00 and $1.05 at listing and subsequent release of further shares........

[The Punter]

They were $1.00 and $1.05 at listing and subsequent release of further shares........
Cheers Grimy, I wasn't over them back at listing time.

[Grimy]

Cheers Grimy, I wasn't over them back at listing time.

Unfortunately I was :-(

But happily I'm now above my average buy-in price. My biggest holding and happy with how the dividend and now share price have been going.

[ratkin]

Unfortunately I was :-(

But happily I'm now above my average buy-in price. My biggest holding and happy with how the dividend and now share price have been going.

Me too, although I later sold for around 70cents. Been back in last year or Two at much lower prices than today, so overall in the black.

[The Punter]

I just couldn't resist taking the 80% profit @ 23c this morning-I'm out. However, when the honeymoon is over, I'll probably get back in.

[flyinglizard]

I just couldn't resist taking the 80% profit @ 23c this morning-I'm out. However, when the honeymoon is over, I'll probably get back in.


I just made my calculation, if the SP jumps to $0.40, the div yield is still above 4%.

[Waikaka]

I just sold as well. Getting a bit pricey for my liking.

60% profit.

[ratkin]

I will stay in for the time being, market is so crazy anything is possible

[Lego_Man]

Is this purely yield purchasing or is there a whiff of takeover/corporate activity in the air?

[mfd]

For those buying for a dividend yield - remember this is obtained from aging turbines currently with no plan to replace them. Unless there is a large capital raise or other activity, the yield will diminish over time and eventually go to zero.

[turnip]

Is this purely yield purchasing or is there a whiff of takeover/corporate activity in the air?

Whatever news is driving the buying it seems only Sharesies investors know about it. Average trade size is a bit over $300, lots of small buy orders and a few larger sell orders.

[wagwan]

For those buying for a dividend yield - remember this is obtained from aging turbines currently with no plan to replace them. Unless there is a large capital raise or other activity, the yield will diminish over time and eventually go to zero.

mfd, assume you've done your research here and read the various Annual Reports over the years?

Assuming that's the case, you'd know that:



In the last 2-3 years in particular - under new board - reinvestment of free cash in CAPEX and maintenance programme has been consistent and more than sufficient to maintain the current asset base of turbines. Clearly evident in cashflow statements and AR commentary.
With regular maintenance - which they're getting - a 35-40 year asset life is not unreasonable to assume
Even without regular maintenance, asset life is estimated at 25+ years
Given the windfarm was commissioned in 2005, and regular maintenance has been occurring, would expect useful life of the windfarm to be until circa 2040


Regarding the dividend yield, the current board has done what I think is a good job of providing revenue stability through the recently signed VVFPA agreement to Dec 2021.

NWF business model is simple and lean, just need to look at employee numbers, or OPEX in P&L to see that. So, with a solid income hedge in place, I don't see the dividend yield diminishing for some time. There are assets there and a plan in place to generate income from those assets for some years to come.

Result of the above being, crucially, dividend regularity and reliability for at least 12 months.

Past 12 months, likelihood of being able to re-negotiate another VVFPA at a reasonable wholesale rate has recently been supported by Tiwai sticking around, which would expect will support wholesale electricity prices for a few years to come. So, baring a major misstep from MGMT or the board, revenue stability and dividend regularity should be here to stay.

Yes building a new windfarm would be capital intensive and change the ball game. That said, I'd argue that's 10-15 years down the track, so not an immediate issue (10-15 based on ~20 years of useful life left, less a conservative 5-10 years to go through resource consent, capital raising, and construction etc.)

My two cents only, DYOR

[flyinglizard]

mfd, assume you've done your research here and read the various Annual Reports over the years?

Assuming that's the case, you'd know that:



In the last 2-3 years in particular - under new board - reinvestment of free cash in CAPEX and maintenance programme has been consistent and more than sufficient to maintain the current asset base of turbines. Clearly evident in cashflow statements and AR commentary.
With regular maintenance - which they're getting - a 35-40 year asset life is not unreasonable to assume
Even without regular maintenance, asset life is estimated at 25+ years
Given the windfarm was commissioned in 2005, and regular maintenance has been occurring, would expect useful life of the windfarm to be until circa 2040


Regarding the dividend yield, the current board has done what I think is a good job of providing revenue stability through the recently signed VVFPA agreement to Dec 2021.

NWF business model is simple and lean, just need to look at employee numbers, or OPEX in P&L to see that. So, with a solid income hedge in place, I don't see the dividend yield diminishing for some time. There are assets there and a plan in place to generate income from those assets for some years to come.

Result of the above being, crucially, dividend regularity and reliability for at least 12 months.

Past 12 months, likelihood of being able to re-negotiate another VVFPA at a reasonable wholesale rate has recently been supported by Tiwai sticking around, which would expect will support wholesale electricity prices for a few years to come. So, baring a major misstep from MGMT or the board, revenue stability and dividend regularity should be here to stay.

Yes building a new windfarm would be capital intensive and change the ball game. That said, I'd argue that's 10-15 years down the track, so not an immediate issue (10-15 based on ~20 years of useful life left, less a conservative 5-10 years to go through resource consent, capital raising, and construction etc.)

My two cents only, DYOR

Agree with what you said! My charted accountant wife has reviewed previous 5 years annual report, then bought in heavily with our kids education fund last Oct. She changed her account password and do not allow me to touch it. She said that she may sell it after 5 years.

[mfd]

I agree, the company is doing quite nicely now and have turned things around. I have held in the past and think management are doing quite well with the hand they have.

My point is, when possible yields of 4% are being discussed, it is extremely relevant to consider that the assets generating the yield are not expected to survive the 25 years they would need to pay back your initial investment at that yield.

Furthermore, there will come a time when turbines start to fail and the company runs through the spare parts in stock. You'll be aware the company that built the turbines is no more, so replacement parts could become quite an issue in the future. This could start to eat into the yield.

A good company, and a good buy at the right price, but the finite life of the assets and lack of current plan to build more must be considered. The yield should absolutely be high to reflect this reality.

[flyinglizard]

I assume that NWF has a diminishing 0.5% of dividend yield. I can nearly get back our whole investment after 10 years. This ignores the potentials of NWF capital changes, takeover, merge, or other business activities.


12287

[mfd]

I assume that NWF has a diminishing 0.5% of dividend yield. I can nearly get back our whole investment after 10 years. This ignores the potentials of NWF capital changes, takeover, merge, or other business activities.


12287

Ok, I would probably make more optimistic assumptions but that's the kind of thing. As such, the yield should be significantly higher than someone like MEL who can keep running most of their plants indefinitely.

[tim23]

I agree, the company is doing quite nicely now and have turned things around. I have held in the past and think management are doing quite well with the hand they have.

My point is, when possible yields of 4% are being discussed, it is extremely relevant to consider that the assets generating the yield are not expected to survive the 25 years they would need to pay back your initial investment at that yield.

Furthermore, there will come a time when turbines start to fail and the company runs through the spare parts in stock. You'll be aware the company that built the turbines is no more, so replacement parts could become quite an issue in the future. This could start to eat into the yield.

A good company, and a good buy at the right price, but the finite life of the assets and lack of current plan to build more must be considered. The yield should absolutely be high to reflect this reality.

You ignore the value of the prime farm that they own.

[mfd]

You ignore the value of the prime farm that they own.

Most recently valued at 3.3 million so around 1cps. Doesn't really change the story.

[flyinglizard]

Ok, I would probably make more optimistic assumptions but that's the kind of thing. As such, the yield should be significantly higher than someone like MEL who can keep running most of their plants indefinitely.

If we assume that after 25 years, all NWF owned plants and equipment are written off from balance sheet.

The total dividend received during 25 years + NTA/share (2021) = $0.505. This ignores the capital appreciation of the land that they owned during 25 years.

double the current SP.

[mfd]

If we assume that after 25 years, all NWF owned plants and equipment are written off from balance sheet.

The total dividend received during 25 years + NTA/share (2021) = $0.505. This ignores the capital appreciation of the land that they owned during 25 years.

double the current SP.

Doubling your money over 25 years is an annual return of 2.8%. Not exactly an appropriate calculation as the dividends spin off earlier and can be invested elsewhere, just to highlight that doubling your money isn't necessarily a great result.

Again, not particularly trying to talk people out of their investment, just playing devils advocate.

[Arthur]

They have access to the technology to produce parts and they already have used third parties producing replacement parts. Replacement of the main wear areas occurs frequently, so aside from the main tower and blades they are rebuilt as required. It would take an updated resource consent, but they could replace the wind turbines with newer ones if the need arose. In the meantime it is a cash generating machine. That said I am tempted to take profits, but can't see where else to invest.

[The Punter]

I'm in a similar spot of limbo, cashed up but struggling to find a home for the $$. ..now if only the SP crashed (for no real reason)...

[nztx]

I wonder - next div due in Mar (if same pattern followed as last year) or will signalled review of NWF Div policy see quarterly payouts ? ;)

2020 March div was from memory $0.007 ( or 0.7 of a cent) per share, if not mistaken..


Sorry - Mr Punter about the posting timing .. ;)

[Getty]

Someone's lost the wind out of their sails, 19.4c, today , down from recent 22/24c

[nztx]

Someone's lost the wind out of their sails, 19.4c, today , down from recent 22/24c

I see that -- looks like they may have been a bit too soon in kicking over their bucket .. ;)

May have to get the truck ready .. ;)

[Getty]

Maybe a sparkie has reattached his earth strap, to bring 'em back to earth.

[nztx]

Maybe a sparkie has reattached his earth strap, to bring 'em back to earth.


Next Div announcement may inflate things again, but if others feel so inclined in the interim - a repeat of 14.2 would be good again
to climb in & load up some more .. ;)

[Arthur]

Contact, Meridian etc about 30% off their highs, would have to drop to about 16 to keep up with the big boys.

[nztx]

Contact, Meridian etc about 30% off their highs, would have to drop to about 16 to keep up with the big boys.

difficult to see on current estimated Div Yield in the current times however

Wonder if NWF will be trotting out the 0.7 cps Div again in March, like they did in 2020 ? ;)

[Getty]

Re yesterdays price drop.

Some must have got the wind up, as they heard Meridian are going ahead with the $395M Harapaki windfarm in Hawkes Bay.

[Getty]

Maybe Meridian are the current undisclosed offtake partner.

That may amp things up a bit..

[nztx]

Re yesterdays price drop.

Some must have got the wind up, as they heard Meridian are going ahead with the $395M Harapaki windfarm in Hawkes Bay.


The HB Upper Landscape will then start looking like Palmy's Hills with the proliferation of Wind Turbines .. ;)

The local Iwi's dont appear too happy with things .. but maybe nothing the right amount of clipping the ticket
may fix .. ;)

[nztx]

https://www.nzx.com/announcements/368190

HY to 31 Dec 2020

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/368190/341099.pdf


Apr 2021 - Div 0.15 cps .. Holy **** that's a bit rough when last year's Div was 0.70 cps in Mar 2020 .. ;)

[Jantar]

https://www.nzx.com/announcements/368190

HY to 31 Dec 2020

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/368190/341099.pdf


Apr 2021 - Div 0.15 cps .. Holy **** that's a bit rough when last year's Div was 0.70 cps in Mar 2020 .. ;)
Not really if you consider that last year's 0.7 and the December 0.4 was had a bit of special mixed in. As explained they held cash back as they weren't sure about their hedge contract going forward. The total dividend is still a good return on the current price.

[nztx]

Not really if you consider that last year's 0.7 and the December 0.4 was had a bit of special mixed in. As explained they held cash back as they weren't sure about their hedge contract going forward. The total dividend is still a good return on the current price.


Okay maybe a bit harsh .. but I see Electricity Derivative losses up to 7 digits (just over $1 mill) in recent period

Fixed supply contracts - didn't these come off in the period, then new ones ? If so thats a fair wack of unrealised
derivative losses in a short time

The other thought is no Imputation credits here -- so holders get wacked for 33% into Govt Coffers
rather than add on credits & deduct added 5% of the total ..

After Imputation credits seems a better comparison basis for NWF against other producers IMO

2020 (refer to earlier posts) looked like 1.8 cps total Div

2021 to date 0.4 plus 0.15 = 0.55 cps YTD 2021

[ratkin]

I am out today, been a good ride, and have to admit never understood the rapid rise over .20c , but was good to see. Stayed in to see if it could keep the momentum going, but am happy to take profits now and move on.

[nztx]

I am out today, been a good ride, and have to admit never understood the rapid rise over .20c , but was good to see. Stayed in to see if it could keep the momentum going, but am happy to take profits now and move on.


Likewise .. just a token number left

[mondograss]

Looks like there might be a bit of an upgrade coming:

The Board notes that revenue (net of hedging) will be materially higher in FY2022 than the current year, However FY2022 EBITDAF guidance range will only be provided to the market once the budget has been approved by the Board. This is expected to be within the next three months and is normal for our business.

https://announcements.nzx.com/detail/370507

[ordop]

Yes, materially higher in 2022 than this year, but.... tbh this year is looking a lot lower (materially) than last year which they haven't mentioned.

[Dassets]

The company has mentioned that a number of times also noting that the current year's result would be the second higher ever. It is pretty simple to figure out next year with a computer, Google and a calculator imo.

[ordop]

fair comment - you are correct, they have mentioned. I guess in their HY announcement they stated
"Operating conditions over the last three months have been broadly on budget and as anticipated at the time of guidance, meaning there is no change to FY21 EBITDAF guidance at this time. "
The wind has continued a very calming pattern in the start of 2021 and so perhaps I was wondering if their may still be the chance of a change in guidance. But not to worry, it certainly had a positive feel to the announcement.

[Survfer]

They're running Windflow twin blade turbines, I seem to recall the windfarm was basically a Windflow scheme to find a home for their turbines. Windflow was liquidated several years ago. Have they said how they're maintaining the turbines, especially replacement parts, and outlined a plan replacement at end of economic life?

[Arthur]

They have the IP and third party support. There is an ongoing replacement of moving parts. IMHO they will be still going strong in 20 years.

[Jiggs]

Well I've made a 7% profit on NWF in just two months, so I am quite happy with my little punt on it. I reckon the me-too investors will push the price up to about 25 cents, then the whole house of cards will collapse to about 18 cents.

[Grimy]

Well there was plenty of volume today and price climbing back towards its 12 month high of 24 cents.
NZ Windfarms Limited - $0.230 - 1,007,664 - $231,243.06.
If it does hit 25 cents I'll have to seriously consider reducing my holding.
As I've mentioned, I've been a holder since listing and am happy with how the company is doing, but I would be a little uncomfortable if it became my biggest portfolio holding.

[flyinglizard]

Very interesting, $0.25 has been mentioned couple of times. I just talked to my wife, who bought a truck load of NWF, about 9 months ago at the average price of $0.138, she said that she will hold something above $0.50. Both of theories are mysterious to me.

[Grimy]

I've only mentioned 25 cents as it is the point where I will need to do a rebalance (or at least seriously weigh up the options). Not a magic number - just one where I think I'll be too heavily invested.
But if your wife has any info. that leads her to think they'll get to 50 cents anytime soon, I'll be all ears!

[fish]

I've only mentioned 25 cents as it is the point where I will need to do a rebalance (or at least seriously weigh up the options). Not a magic number - just one where I think I'll be too heavily invested.
But if your wife has any info. that leads her to think they'll get to 50 cents anytime soon, I'll be all ears!

Perhaps it is to do with future EPS .
My understanding is that this year all production is hedged at around 90 .
Next year it is going to be a lot more .
It would be good if someone more capable than me could work out scenarios for EPS in the future .
It seems to me that running costs are unlikely to increase significantly but revenue will.

[fish]

I've only mentioned 25 cents as it is the point where I will need to do a rebalance (or at least seriously weigh up the options). Not a magic number - just one where I think I'll be too heavily invested.
But if your wife has any info. that leads her to think they'll get to 50 cents anytime soon, I'll be all ears!

Perhaps it is to do with future EPS .
My understanding is that this year all production is hedged at around 90 .
Next year it is going to be a lot more .
It would be good if someone more capable than me could work out scenarios for EPS in the future .
It seems to me that running costs are unlikely to increase significantly but revenue will.

[flyinglizard]

https://www.emi.ea.govt.nz/Forward%20markets/Reports/KOP4VM?DateFrom=20170601&DateTo=20210527&Instrument=FUTURE&Location=OTA&CommodityType=BASE&Duration=QTR&seriesFilter=AVG_SPOT,AVG_LONG&_si=v|3


Double the number next year. 90 is too low.

12681

[wagwan]

Interested to start a discussion around NWF - where we are now and looking forward.

For me, while maybe now not significantly undervalued, still one of the more underappreciated stocks on the NZX

Initially bought in Oct / Nov 2020, and have had a good ride since then - my rationale at the time, which largely still holds, was:



Historically fairly inconsistent and underperformed. Largely due to poor management - board (Vector appointed to 2016) and exco objectives not aligned with shareholder interests - and, instability of revenue and exposure to variations in wholesale electricity market. Reflected in stagnant SP.
However, in the last 2-3 years:

Significant improvement in management, board oversight and understanding of where value for shareholders lies
Revenue and dividend stability - in securing Variable Volume Fixed Price Agreements (VVFPA) to provide revenue stability

Result of this being, crucially, dividend regularity and reliability
Since Dec 2020 further VVFPA contracts confirmed


Continued reinvestment in CAPEX and maintenance programme, to ensure extend lifetime of current wind turbine assets

As per annual reports, with regular maintenance, 35-40 year asset life is not unreasonable to assume
Issues with previous supplier of components alleviated as no operate an independent maintenance programme


Context of ESG investing and social and govt movement towards clean energy; along with



Things that still stand out:



NWF IPO'd some 15 years ago at circa $1, which was essentially a capital raise to build the current wind farm

Some debt in the capital mix, but essentially that initial equity funded an asset base which as per last Annual Report was valued at ~$54m


Business model now is essentially to maintain the wind farm and sell power generated under the VVFPA to one of the big players in wholesale market
Cash then used to maintain existing assets, and surplus (~$7.6m last year) paid to shareholders.
Low OPEX and very simple organisational structure - believe there's 10 employees.


Lowly geared and consistent approach to debt amortisation
Recently renewed banking facilities for another ~3 years with BNZ




So in sum:


The Business

Inconsistent past, but significant improvements in the last 2-3 years
Solid board and management, who are now acutely aware of, and take into account, shareholder interests and understand this is an income stock
Simple model, low OPEX, so few key variables outside asset maintenance and revenue stability and security
Consistent approach to amortisation of debt, and no immediate requirement apparent to take on more as CAPEX funded out of cashflow. Will reflect in improvement in EBITDAF / EPS etc etc over time assuming all else if equal
Solid asset base: 25 year lifespan (takes us to ~2030) without maintenance, 30-40 years with maintenance. Freehold ownership of land.


Context

Movement towards ESG and demand for clean energy, supported at community and government level
Fairly insatiable hunger for yield in any kind of asset class
Futures for wholesale electricity match expectation that cost of energy will continue to increase as move towards renewables accelerates, and cost per unit generated remains high comparative to non-renewables
Tiwai limited impact as NWF North Island based and increased demand for energy over 3-5 years could easily eclipse Tiwai hole - driven by genera demand, and one offs such as data centres (Microsoft AKL) and agriculture moving from coal / diesel generation to renewables (ie: hydro) in South Island - two tangents, but interesting to read up on
Looking forward, futures pricing well above hedged position as per flyinglizards post above. Will drive EPS, dividend, yield and finally SP
Recent shortages of natural gas supply and only ~10 years of gas reverses based on current demand - with hydro lakes increasingly being low, this will likely drive further increases in wholesale markets? Flow on for NWF being: same asset base, same OPEX / CAPEX, improved per unit revenue, directly flow to EPS and divi


Issues

Finite asset life, and need for significant capital raise at end of life
Mitigant being that this won't be for some time (at least 10 years would think)
NTA / Share is now ~$0.13, so at $0.24 now trading at a 84% premium to NTA. Back in Nov / Dec 2020, when trading at ~$0.14 (ie: roughtly equivalent to NTA) premium was essentially nil for high yielding asset base
Now, wondering where the roof is for SP? Assuming Final Divid is ~$0.004, gross yield could fall to ~3-4%, still not bad in context of current interest rate environment and wider NZX, however given strength of NZ economy and increasing possibility of rate hikes (90% priced into wholesale markets by Nov 2021) does this start to not look so attractive?
That said, is the above offset against likelihood of future EPS growth on back of VVFPA negotiated at what would assume is a higher futures price of 130+?







Keen to hear what others have to say and anything missed !

[RTM]

I am a happy holder, up 65% since purchasing. A few dividends along the way as well.
Thanks for your summary, I also wonder about them being a take-over target ?
Was wondering if Tilt might have had a look at them, nothing so far.
Should have bought more.....how many times have I said that...so easy looking back.

[RTM]

Duplicate................

[fish]

NWF after agreeing to a higher fixed price agreement for all its production from 1/1/22 to30/9/2022 are due to issue EBITDAF for 2022 in the next week.
I have high expectations .

[Arthur]

Hi Fish
The wind run was disappointing in the last quarter and the power price received was well below market. I hope you are right, but expect that you will be disappointed.

[flyinglizard]

NWF after agreeing to a higher fixed price agreement for all its production from 1/1/22 to30/9/2022 are due to issue EBITDAF for 2022 in the next week.
I have high expectations .

Hi fish, I agree with Authur. I do not think the price is good enough, they signed the contract too quick before the average price moving upwards.

[Grimy]

Share price certainly taken off today.
I sold a few this afternoon as it seems to be getting a bit ahead of itself. But still retaining the majority of my holding.
Happy holder and seller.......

[flyinglizard]

Share price certainly taken off today.
I sold a few this afternoon as it seems to be getting a bit ahead of itself. But still retaining the majority of my holding.
Happy holder and seller.......

easily crashed $0.25. nearly 40% of my wife's portfolio, she is still happy to hold till over 50 cent, maybe more. Just as same as she is happy with ARV (approx 40% of holding too) over $10 after number of years.

[Arthur]

NWF after agreeing to a higher fixed price agreement for all its production from 1/1/22 to30/9/2022 are due to issue EBITDAF for 2022 in the next week.
I have high expectations .

On re reading this it seems that you are talking about the forecast for next year, not this year. A refreshing change to have somebody looking to the future and not the current. I think this financial year will be disappointing, next year could be spectacular.

[fish]

Hi Fish
The wind run was disappointing in the last quarter and the power price received was well below market. I hope you are right, but expect that you will be disappointed.

Hi Arthur,
Thanks for your post.
I feel EBITDAF will keep increasing year after year .
Current power price is well below market which leads me to think that the power price for production from 1/1/22 will be a significant amount higher translating to a higher profit this financial year and a much higher profit in subsequent years .
Aluminium prices are high and it now looks as if Tiwai closure is less likely.

[fish]

Hi Fish
The wind run was disappointing in the last quarter and the power price received was well below market. I hope you are right, but expect that you will be disappointed.

Hi Arthur,
Thanks for your post.
I feel EBITDAF will keep increasing year after year .
Current power price is well below market which leads me to think that the power price for production from 1/1/22 will be a significant amount higher translating to a higher profit this financial year and a much higher profit in subsequent years .
Aluminium prices are high and it now looks as if Tiwai closure is less likely.

[Arthur]

If the tax law changes allowing losses to be tax losses to be carried to a new purchaser (takeover) that is a hidden asset. They have about 20 million of tax losses in the books.....

[Arthur]

If the tax law changes allowing losses to be tax losses to be carried to a new purchaser (takeover) that is a hidden asset. They have about 20 million of tax losses in the books.....

[flyinglizard]

Cannot believe it when I read the contact energy updated report this morning, the electricity wholesale price is sky high to over $260/MWh. The high of ten years high? I though it would be that level next year, but it just happened in this June.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/CEN/375803/350507.pdf

12756

[nztx]

Wonder how the dividend policy considerations are going - didn't NWF hint this was being looked at a while back ? ;)

[Grimy]

We've received a dividend in September the last 2 years. Fingers crossed there is an announcement soon re this September.

[Getty]

Wonder how the dividend policy considerations are going - didn't NWF hint this was being looked at a while back ? ;)

They may retain a dollar or two for the turbine replacement fund,

[Grimy]

.0045 cent dividend payable 22nd September.

[nztx]

.0045 cent dividend payable 22nd September.


1.00 cps total Gross Div for year, No Tax Credits & The Taxman gets to flog 33% of it out, before it lands in stakeholder's hands

Think I like the year before's answers even better ;)

Those derivatives have certainly come back to bite NWF very hard on the b*m, even with the increased Sales revenue ;)

[Southern Lad]

What reflections do followers have on today’s announcements?

I haven’t followed for awhile so the immediate comments and questions I have for you NWF followers are:

- current year financial performance a little disappointing, wind conditions have been a bit benign of late.
- dividend well down on where it’s been the last couple of years
- is the a clear definition of free cash flow for the new dividend policy?
- what are the expectations for the FY22 dividend level?
- Pricing for FY22 production under the VVFPA is an improvement on FY21.
- repowering and reconsenting the existing site is a massive project, with significant capex required?
- does NWF have the financial backing to per-sue the development of additional wind farms?
- is the current shareholder base good for a significant capital raise or do existing shareholders end up getting massively diluted as the NWF chases a large market placement?
- what is the impact on future share price of having 23,000 shareholders on the Sharesies platform - will the share price be more volatile?
- what does this all mean in terms of where the share price is headed in the short term?

[Grimy]

Hi Southern Lad.
I'm not sure about the repowering and reconsenting being brought up now, I thought with the in-house maintenance, parts improvement, etc that the units had a fairly long life ahead of them. I hope they do.
If they decided to go to something different (which I guess is really the only option) then the current tower sites, roading, etc may all have to be redone.
As you say a massive job, and after the battles with the current unit consents, I don't know how they would get on with the neighbours with bigger units - if that's the way they want to go.
I'm sure it will be years before any of this happens though.
I would obviously like a higher dividend, but as my average price is about 50% of today's share price I can't complain about the return.
I am slightly nervous about sp stability. I have sold down a bit over the last couple of months, but am still happy to be a holder (since day one).

[nztx]

How do NWF Dividends paid look in comparison to NWF's bottom line after tax across the past 5 years ?

Gut feeling suggests dividends may be in excess of Net Surpluses by some distance, if not wrong ?

I suspect there were Imputation credits attached to the maiden 2018 dividend

[nztx]

Dividends paid by Financial Year:

2017 - Nil
2018 - 0.85 cps - $2.449 m
2019 - 1.05 cps - $3.024 m
2020 - 1.80 cps - $5.184 m
2021 - 1.00 cps - $2.880 m

Total - 5 years - $13.537 m

Net Profit (Loss) Pre Tax by Year:

2017 year $ 910 k
2018 year $ 780 k
2019 year $ 718 k
2020 year $2.401m
2021 year $ 501 k

Total - 5 years $ 5.310 m

Net Profit (Loss) After Tax by Year:

2017 year $ 649 k
2018 year $ (14.747) m (after Tax of $15.527 m)
2019 year $ 627 k
2020 year $1.727 m
2021 year $ 311 k

Total - 5 years ($ 11.433) m (Negative)

Perhaps someone could check my rough figures please ?

Thanks

[Jantar]

….

Perhaps someone could check my rough figures please ?

Thanks
Without checking your figures, I believe they are correct. But if you carry out the same exercise wit any of the generators (CEN, GNE, MCY, MEL ) you will get a similar result. Dividends are paid from cashflow, rather than after tax earnings. The reason is that the actual earnings are decreased so much by depreciation that if these companies only paid from earnings, they would be left with cash mountains doing nothing.

The answer is to pay out this cash to shareholders, and when plant is due to be replaced some years in the future, have a capital raise to pay for it.

[mondograss]

Given any repower would take years to bring to fruition, it seems prudent that they start the planning and design process for it now. It does occur to me that there are players like TLT and Longroad around the place, plus of course the big gentailers, who might find them more attractive to take over if they've done the planning work up front.

[Grimy]

I suspect there were Imputation credits attached to the maiden 2018 dividend

Yes there were.

[nztx]

NWF distributing unimputed dividends isn't very tax friendly in hands of reciprients
with tax losses remaining in the camp, paying out in excess of trading surpluses
and stakeholders getting walloped for 33% DWT on what is thrown their way

Buyback, or share consolidation (if any form of distribution etc made at all) would probably
be far more effective.

Is some of the cash being thrown out as dividends not that reserved via depreciation
& amortisation claims .. How is is new plant & development going to be funded
if what is being reserved is being distributed & subject to another layer of tax extraction
in holders hands ? ;)

More borrowing or issue further shares down the track ? ;)

There was a time when distributions from Capital had restrictions on them being permitted

Can a Company have a full cupboard of Cakes & give away / eat 25% of them which are slightly wonky ? ;)

Just because the cash is there (may be not so much after the last 12 months) doesn't mean to say
there are more productive ways of applying it that shelling out a large dallop regardless of whether
it is trading surpluses, depreciation reserved, possibly may be better intended to loan reduction
or held for future capital items to replace those wearing out at eventual end of their economic lives..


Past history & accounts show a long past record of losses incurred by NWF

[flyinglizard]

NWF distributing unimputed dividends isn't very tax friendly in hands of reciprients
with tax losses remaining in the camp, paying out in excess of trading surpluses
and stakeholders getting walloped for 33% DWT on what is thrown their way

Buyback, or share consolidation (if any form of distribution etc made at all) would probably
be far more effective.

Is some of the cash being thrown out as dividends not that reserved via depreciation
& amortisation claims .. How is is new plant & development going to be funded
if what is being reserved is being distributed & subject to another layer of tax extraction
in holders hands ? ;)

More borrowing or issue further shares down the track ? ;)

There was a time when distributions from Capital had restrictions on them being permitted

Can a Company have a full cupboard of Cakes & give away / eat 25% of them which are slightly wonky ? ;)

Just because the cash is there (may be not so much after the last 12 months) doesn't mean to say
there are more productive ways of applying it that shelling out a large dallop regardless of whether
it is trading surpluses, depreciation reserved, possibly may be better intended to loan reduction
or held for future capital items to replace those wearing out at eventual end of their economic lives..


Past history & accounts show a long past record of losses incurred by NWF

It seems that someone is drawing the masterplan and try to sell the whole lot to the developer. That is more attractive.

[Getty]

My Quote, valid for 10 weeks from today, to replace NWF's current generation capacity, with a total re fit of new turbines, cabling and transformers, connected to the existing demarcation point, is $76M.

Todays market cap @27c is the lucky number of $77.777M.

NWF will retain land ownership, trade in value of existing transformers, and any scrap cabling recovered.

The existing windmills will be lowered to ground level, but removal from site is NWF's responsibility.

All consenting costs will be at the expense of NWF,

Acceptance of my quote must be accompanied by 15% deposit.

[Getty]

Today, director & Board chair John Southworth has announced he is standing down.

"My skills in turnaround have become less relevant, and skills in capital projects have become more desirable."

I didn't mean for my Quote to scare you that much John!

[flyinglizard]

The business model is changing now.

Director and Chair steps down. New director, Christine Spring with a Civil Engineering background, specialized in infrastructure, strategy planning & Environment ( Australian Pacific Airports, Auckland International Airport), has lots of experience to deal with noise!!!

Today's announcement mentioned new greenfield development, that is the key and what drives director change.

What will bring to shareholders? "Fixed assets business model " will be ended. New growth model will start. The company needs new capital.

Issue new shares to start a long hard journey?
Or sell the whole company with resource consents to some big guys, a quicker return to shareholders?

Time will tell

[Getty]

The business model is changing now.

Or sell the whole company with resource consents to some big guys, a quicker return to shareholders?
l

NWF have been down the sales track with big boys, who decided to invest elsewhere.

Capital raising on the horizon.

My Quote is transferrable to Greenfeild development, anywhere in the North Island.

[mikeybycrikey]

I’m a bit torn about what to do here. When I bought in a handful of years ago, they were a slightly underpriced boring generator. Now they are probably more fully priced with a more reliable revenue stream because of the hedging/VVFPA.

They are now starting on a new journey that hasn’t yet been developed or explained fully. Time will tell where the company goes. It’s unclear to everyone what the risk and reward of this might be.

I’m interested to see where this goes, but sometimes a boring reliable generator is what you want.

[Dassets]

Ref tax. Tax either has to be paid by the company or the receiver of the div. IT IS ONLY PAID ONCE. Imputation credits only signal the tax has been paid by the company. The losses be super careful, non-cash etc . It is more important to focus on EBITDAF and guidance as that is more cash based. REF all the other comments, I recommend reading the annual report and other releases carefully. There is a stack of info in them. I won't comment on the other things but if any one wants to call(tomorrow pls) I can answer any questions within the rules. My number on the releases Cheers John

[nztx]

Ref tax. Tax either has to be paid by the company or the receiver of the div. IT IS ONLY PAID ONCE. Imputation credits only signal the tax has been paid by the company. The losses be super careful, non-cash etc . It is more important to focus on EBITDAF and guidance as that is more cash based. REF all the other comments, I recommend reading the annual report and other releases carefully. There is a stack of info in them. I won't comment on the other things but if any one wants to call(tomorrow pls) I can answer any questions within the rules. My number on the releases Cheers John


Thanks for your reply - first off - Stakeholders have been privileged to have your vast guidance skills & direction
provided to NWF. Picking up from exit of the major holder some years ago won't have been an easy task.

Correct - tax on taxable income is usually payable by company or receiver where taxable income exists.
Imputation credits result from corporate tax paid having been paid across to tax authorities.

Undoubtedly, Board have sought & received pre-requisite advices on any distributions.

Would you not say that distributing in excess of EBIT effectively may in effect be distribution of Cash reserved by Depreciation
& Amortisation charged to P&L over the period ?

The Surplus Fund created by depreciation & amortisation provisions represents excess between book value & Asset cost, presumably
considered needed to replace the assets with similar at historic cost values ?

Further if the Company was not in a tax payment situation (due to depreciation or available brought forward Losses)
then - is it possible stakeholders have incurred 33% on distributions or part thereof unnecessarily ?

Would a pro-rata share buy back have not been more tax efficient (Nil tax), if it was decided that the excess cash could not be
applied elsewhere ? (say replacement new plant, enhancement, developments or repaying debt faster within the business)

Another poster earlier eluded to Cap Raise or funds may be being needed in future at some point..

Without doubt, unless taken over by another player, NWF must face at some point, the future issue of replacement of a significant
part of existing WF plant, installation once this nears end of it's economic life ..

Reading reports - if not mistaken NWF is selling on Spot Market, with derivative coverage

Have new energy storage technologies been explored ?

I understand there have been advances in this area in Canada / North America in the past few years
Whether these allow storage to point of release in peak times, not sure

[Dassets]

I won't go into massive detail. Good questions. The latter is easy to answer. The production has to be sold at spot if it goes into the grid. Distributed production aka into a local network is different. Energy storage build ie cap spend would need to be value accretive.
On the DA stuff where is my typewriter as you can write a book! Maybe some good theoretical arguments here, there is a good element of truth in what you say. You need to get the buyback to a level that it is deemed capital not divvy return. A bit rusty but thresholds 15% or 10% mins with IRD binding ruling?? Something like that. Someone embarrass me if I am wrong on this. But I personally would favour any approach that maxed the cash/value in shareholders hands(some accept cash some decide to not participate but receive value through increased economic value in holding as others accept cash and sell shares. The other bigger consideration is a project like this you can't add dep back into assets each year. It wouldn't do anything. So options are hold on to it or transfer value back to shareholders. Hold on to it for 5, 10 or 20 years until you need it for a big piece of capex? Not great option really as return is bank interest less tax. The best risk adverse shareholder can do that by themselves. The rest of EBIT threshold question I will leave because that is more lengthy one way or the other.

[wagwan]

Is some of the cash being thrown out as dividends not that reserved via depreciation
& amortisation claims .. How is is new plant & development going to be funded
if what is being reserved is being distributed & subject to another layer of tax extraction
in holders hands ? ;)



Just because the cash is there (may be not so much after the last 12 months) doesn't mean to say
there are more productive ways of applying it that shelling out a large dallop regardless of whether
it is trading surpluses, depreciation reserved, possibly may be better intended to loan reduction
or held for future capital items to replace those wearing out at eventual end of their economic lives..




Not sure that the above comments are on the money, pardoning the pun.

As per Annual Reports, 35-40 year lifetime for turbines is not unreasonable with regular maintenance (which has been completed, from what I understand [$1.038m spent in FY21 as per Pg 48 of FY21 AR]). Without maintenance, lifetime is something more like 25 years.

In either case, given the current windfarm was established in ~2005, takes us through to 2030 at a minimum for 'useful life' of existing assets. More likely 2035+. See Page 56 of Annual Report.

Noting that the consenting, procurement, build, capital raising would take some time - let's generously say 5 years - still leave plenty of 'useful' life left in the current turbines.

To that extent, why would directors not then pay out a large portion of free cash (after debt amortisation and CAPEX) to shareholders?

Basic premise of investing being time value of money, and money now is better than money tomorrow. Alternative being to let a 'depreciation fund' sit in a bank account for X years, earning next to nothing?

To me, the model of NWF is a 'closed loop' of long-term but finite asset life cycles, ie:


Raise capital for asset base, which has a semi-long term lifetime
Throughout that lifetime, initial capital is returned to shareholders/financiers through free cashflows generated (after OPEX, which for NWF is minimal given nature of business, and required CAPEX to maintain existing asset base), and any capital appreciation that yield may attract
Effectiveness of this model, is that free cashflow (approximated by EBITDAF) will almost always be significantly higher than trading profits, due to large depreciation in P&L. Returning this to shareholders therefore appropriate, but paying tax in company not as affective due to size of taxable profit
Eg: NPAT FY21 $0.501m vs NCAO FY21 $4.898m
When assets then near end of lifecycle, raise new capital to replace and cycle re-starts (ie: loop closes and new one starts)


So would argue that 'new plant and development' is not necessarily the concern of current shareholders (noting that this is simplifying it a bit much, as there will always be an eye towards the future), as the 'next loop' will require a capital raise, which shareholders/financiers can participate in based on the merits of the proposal at the time.

Agree regarding share buy back potential, however points raised by Dassets may explain why that route hasn't been pursue - have to admit this isn't my area of expertise

Don't agree re quicker amotisation of bank debt, however. BNZ are providing debt at 90 day BKBM + 1.39% margin. 90 BKBM yesterday was 0.49%, so an all up rate of 1.88%. Cheap.

[JohnnyTheHorse]

Bit of a drop from that 29c peak. Hit daily RSI oversold in a previous area of resistance (now support) so started scaling in for a bounce yesterday. Looking for a weekly lower high around 26.

[Wasp]

Chairman, who has done an excellent job, is stepping down.
Chairman is selling off shares.
Last year, another director sold off all his shares.
New chairwoman … photographs.
Should I be worried?

[Grimy]

I won't be able to watch the meeting tomorrow. Will be interested in others take on what is discussed.

[Grimy]

I wonder if there will be a dividend at the end of the month like last year. Then it went ex on the 21st December and was paid on the 31st.
They also paid one on the 22nd of September this year and last.
Fingers crossed.

[LoungeLizzard]

I wonder if there will be a dividend at the end of the month like last year. Then it went ex on the 21st December and was paid on the 31st.
They also paid one on the 22nd of September this year and last.
Fingers crossed.

From NZX:

Q1 FY2022 unimputed 0.15 cps dividend to be paid 31 December 2021:
Today the Board announced a 0.15 cents per share unimputed dividend (PCP: 0.15 cps) to be paid 31 December 2021. Details are included in the accompanying distribution notice.

[Grimy]

Thanks LL. I'd checked on the upcoming dividends page for NWF, but not on announcements this morning.
The amount is a little underwhelming though.......

[flyinglizard]

Hope the company stops paying dividend ASAP to use the cash for new development, turning this fixed income assets business model to a fast growth model. New Masterplan has been drawn and consent submitted this week. Hope this fast track consent will be backed up by government and related funding will be provided.

The new director, Craig Stobo is an investment banker and fund manager. That is great!

[LoungeLizzard]

Hope the company stops paying dividend ASAP to use the cash for new development, turning this fixed income assets business model to a fast growth model. New Masterplan has been drawn and consent submitted this week. Hope this fast track consent will be backed up by government and related funding will be provided.

The new director, Craig Stobo is an investment banker and fund manager. That is great!

Agreed. The dividend is so small as to be inconsequential and NWF need to build up reserves for both replacement next-generation turbines and additional turbines that are already consented.

[nztx]

Dividend @ 31 Dec 2020 was 0.40 of a cent (no imputation credit)

This year a mere 0.15 of a cent QUARTERLY in Dec 2021 before the IRD knife slices away a third of it in DWT

Annualised ahead 0.60 of a cent for 2021/22 probably ranks NWF among the poorest of the Port Companies
which in parts for most actually do attach imputation credits to their payouts


1.0 c a share total for 2020/21 Full year (unimputed = full IRD DWT knifing) (3 payouts)
1.8 c a share total for 2019/20 Full year (unimputed = full IRD DWT knifing) (3 payouts)
1.05 c a share total for 2018/19 Full year (unimputed = full IRD DWT knifing) (2 payouts)

Is the CEO putting out the NWF announcements something new or just while there are vacancies on the Board ? ;)

Not currently a holder .. other boys & girls liking NWF better provided a nice exit a while back

I'm thinking I'd have more of a taste for this one back in the mid to low 10's - 15c which may well be where
it's deserving of being placed, but for possible new Director magic fairy dust being sprinkled around ;)

Somewhere along the track either at cost of whatever dividends there are, or possible Cap Raise, or Borrowing
at expense of lowering future earnings short to medium term must be a prospect
for any / more costly developments / expansion / upgrades .. can't have it all ways :)

Correct me if wrong, but where is the fly high Wow factor with this one, aside from prevailing
green clean electric eco-friendly winds of today .. unless holders like giving away 33% DWT to IRD ? ;)

[ordop]

Have to agree nztx, 'underwhelmed'. Dividend is pointless given the quantum and I think their 'material' EBITDAF projection is fortuitous given the wholesale market since fixing the pricing agreement and the distinct lack of wind to date in what is generally the windiest seasons of the year. Otherwise EBITDAF would be 'MATERIALLY' short of last year. With all this rain about perhaps NWF could investigate turning the Turitea Dam into a hydro station to diversify their generation! ��
I think mid teens is probably more of an appropriate pricing band but this is the dawn of a new age of investing whilst hoodwinking the sheeple. I thought Wagwan post 1182 summed NWF well in terms of a series of closed loop projects and thought that there is still plenty of years left in the current project cycle. Anyway, plenty of Sharesies support on the bid and NWF do keep all their energy in the 'cloud' so only blue skies from here.

[ziggy415]

Would trustpower be interested at the right price

[flyinglizard]

Investors depends on DIV should exit from this company now. It only delivers capital gain in the near future.

[Grimy]

It was delivering brilliant capital gains in the recent past! Back to 28/29 cents would be great!

[Grimy]

Ex Div 23/3
Payment 4/4
.0023 cents.......

[shareman]

I think it was a good positive result with the land acquisition

[turnip]

I am still holding, but I stopped topping up and reinvesting dividends once it went over 18 cents.

What I really want to know is how the repowering and/or expansion will be funded, I assume it will involve a rights issue or share purchase plan and I will get a chance to reinvest my accumulated cash then.

[nztx]

I am still holding, but I stopped topping up and reinvesting dividends once it went over 18 cents.

What I really want to know is how the repowering and/or expansion will be funded, I assume it will involve a rights issue or share purchase plan and I will get a chance to reinvest my accumulated cash then.


NWF may be wanting a multiple of the past 2 year's Div's back plus some, as a CR contribution to cover it :)

No longer holder.

[Dassets]

Well done to NZ Windfarms being granted Ministerial referral for Fast Track Resource Consent consideration for the repower of its Te Rere Hau windfarm.


When I finished my time as director and chair last AGM I was very confident in this outcome. The thought that went into the strategy was very considered and the result of a couple of hard years of mahi to get to the launch point.


Well done to CEO Warren Koia, the board and the rest of the team within NWF and its advisers.


Still lots of work ahead to give life to the strategy but this hurdle is well and truly cleared.

[Walter]

Thanks for your work there Dassets. Do you think they will add piecewise or in one foul swoop?

[shareman]

Yeah, the future is looking great for NWF (disc. happy holder)

[nztx]

the ski slope down the hill looks fairly good :)

perhaps NWF should put a tourist cafe & viewing tower at the top to further maximise opportunities :)

the surplus wind puffs could be used to pulled the tourist trolleys up the hill

[nztx]

Holy Kapoli .. a generous Quarter of a Cent being tossed out


Fully RWT'ed .. Frank must have been busy elsewhere :)


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/397787/377824.pdf

[flyinglizard]

The new management team seems slowly preparing with resource consent application, and it lacks transparency.

Why purchase the land right now under such higher interest rate environment with new debt? What you do before the interest rate hikes? Slow corporate planning and action, I am not confident with new board and director members.

[nztx]

Christmas Bonus time again from NWF - not a 1/4 of a cent this time

Try just 1/20 th of a cent, before the Taxman swoops in to swipe 33% of the job .. just in time for Christmas
but as in past no imputation credit sweeteners apply ;)

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NWF/403785/385245.pdf

At least NWF are still paying dividend so holders don't forget that even small treasures can't be forgotten :)

It was 3/20ths of a cent last year and this time 2022 is one of the smallest dividends on record since March 2020 - who swiped the rest of it this time ? :)

Note to self - the NWF Christmas Party must be a fairly blown occasion - might be worth attending next year instead of waiting for what crumbs are left over :)

[Grimy]

I'd much rather they didn't bother.....Still I guess it's one cheapish bottle of wine for Christmas for me!

[nztx]

I'd much rather they didn't bother.....Still I guess it's one cheapish bottle of wine for Christmas for me!


If you add the GST, Taxes & Duty on the bottle of cheap stuff, the Govt will likely be ripping off
with more of the dividend than you get to enjoy .. ;)

Add in all the duties, levies, GST and taxes on the fuel to go get the bottle and it gets worse ;)

[Southern Lad]

It difficult to see that if the TRH repowering projects proceeds under NWF ownership that there won’t have to be a very significant capital raise to help fund it, and that will be dilutive to existing shareholders due to the need to discount the offer price of new shares issued.

While a JV partner could come on board, I understand that other industry players have passed up the opportunity to buy TRH at a price acceptable to NWF in the past.

If the project has attractive financial returns, I think there will be a future buying opportunity at a price lower than todays share price.

[Dassets]

Someone should ask them for the cashflow calculation to show how they have met the disclosed dividend policy guidance.

[Recaster]

Well done to NZ Windfarms being granted Ministerial referral for Fast Track Resource Consent consideration for the repower of its Te Rere Hau windfarm.


When I finished my time as director and chair last AGM I was very confident in this outcome. The thought that went into the strategy was very considered and the result of a couple of hard years of mahi to get to the launch point.


Well done to CEO Warren Koia, the board and the rest of the team within NWF and its advisers.


Still lots of work ahead to give life to the strategy but this hurdle is well and truly cleared.

Just wondering about the term 'repower'.

Are existing wind units to be scrapped? Or the new one placed near the existing ones?

Just taking a look at the depreciation issue.

NWF allows 5-40 years for the life of a wind unit. My understanding is 20-25 years is the industry standard.

[Recaster]

A note on this company ahead of its interim results due any day now:

NWF Note (https://recastinvestor.substack.com/p/note-nz-windfarms-nwfnzx)

[Recaster]

The HY23 accounts announced yesterday. The stock sold off on the announcement from 14.1 to 12.2 today.

NWF Update for HY23 (https://recastinvestor.substack.com/p/update-nz-windfarms-nwfnzx)

One of the reasons might be that the company is relying on derivatives for its profits in this period.

[flyinglizard]

How long they cannot work out a resource consent? Now consulting fee increases, just like labour **** doing, but no delivery. Deeply worried.

[nztx]

thought this thing had some chance of going places a few years ago .. but maybe not ..

so off out some time back, while the going looked a bit more inspiring :)

[nztx]

One Excited Wind Company .. they are saying now

How exactly does a Wind Generator get this excited ? - do all the Wind Towers
start dancing in circles on yonder hill overlooking Metro Palmy on a gusty day ? ;)

Or do the Directors all do a Wind Dance on the drive outside so that the Wind Gods
then have to come and certify the affair is McCoy ? ;)

Let's hope things don't get too overly excited, otherwise punters might get the
wind up if a decent excited dividend doesn't appear after all the excitement
and promised growth hatches into something more startlingly brilliant .. ;)



https://www.nzx.com/announcements/409555


Craig Stobo, NZ Windfarms Chairman says “The Company is excited about the prospect of utilising the fast-track resource consent pathway for the second time to continue with the Company’s strategic growth aspirations, and to continue to contribute to the decarbonisation of the electricity sector. It should now be clearer to shareholders why the Board decided to pause dividends and to retain cash to invest in growth opportunities”.



Let's hope the red tape moves faster than the speed of a Manawatu gale and things don't get bogged down resulting in any of the Board tripping over in the wild chaotic excitement ;)


but the one year SP graph under doesn't look like it's seen much of late to be excited about:

https://www.nzx.com/instruments/NWF



(don't tell anyone .. but the 2 year graph also appears short on excitement too)


Perhaps the good folk at NWF are excited about something else ? .. no need for cumbersome
calculations any more to work out entitlements to the 8th sub digit any more ? ;)

[flyinglizard]

result delayed to 19th of May. they just cannot make it right........the project is to replace old wind turbines with new larger turbines...not build new turbines on empty land.

During the construction period, no cash inflow for the company. NWF better disclosures how they are going to finance the project. They better sell this company with new consent to large energy company. That is the only way out.

[Poet]

result delayed to 19th of May. they just cannot make it right........the project is to replace old wind turbines with new larger turbines...not build new turbines on empty land.

During the construction period, no cash inflow for the company. NWF better disclosures how they are going to finance the project. They better sell this company with new consent to large energy company. That is the only way out.

Shouldn't be too hard, they just need to find someone that is willing to pay $38m market cap plus $8m debt plus whatever premium the shareholders demand over and above today's market cap.

For that the buyer will get, not a clean consented site, but one which needs to be cleared of existing infrastructure before construction of repower can begin.

This has never been a viable path for NWF to follow - TBH, I dont know what they have been drinking these last three or four years.

[flyinglizard]

Shouldn't be too hard, they just need to find someone that is willing to pay $38m market cap plus $8m debt plus whatever premium the shareholders demand over and above today's market cap.

For that the buyer will get, not a clean consented site, but one which needs to be cleared of existing infrastructure before construction of repower can begin.

This has never been a viable path for NWF to follow - TBH, I dont know what they have been drinking these last three or four years.

The new management made the worst strategic move to redevelopment of the existing site. I wonder how they can survive, unless

- they do it slowly by a few stages, still have some cash flow when build new turbines.
- Or they confidently get subsidy from the government.
- ISSUE BOND (high yield?)
- borrow from bank (sky high interest rate)
- issue new shares (shareholders not believe the story)

they must spend too much shareholders money on those drinks and consult with idiots. Worse than kiwibuild.

If they resign, or sell this company, or get fund from the government, then I take my word back and apologize to them.

[shareman]

End of the day, shareholders wanted the repower, how it is going to be funded is another question but the repower surely is the right thing to do by shareholders

[Recaster]

End of the day, shareholders wanted the repower, how it is going to be funded is another question but the repower surely is the right thing to do by shareholders

Perhaps voluntary liquidation is a better option. Where are the old blades to be buried by the way?

Burning through potential capital raising proceeds on a technology that doesn't stack up without subsidies on it or hefty taxes on fossil fuels is not a good idea.

Want to address climate change in a meaningful way? Ban all trade with key carbon producing nations: USA, India and China in particular and watch New Zealand's standard of living adjust back to primitive.

Now that's a real sacrifice in pursuit of climate change goals.

The fact is nothing New Zealand does makes one iota of difference to climate change.

Wind and solar are largely misallocations of capital supported by subsidies and/or taxes on fossil fuels.

[nztx]

End of the day, shareholders wanted the repower, how it is going to be funded is another question but the repower surely is the right thing to do by shareholders


What enhanced results will Repowering produce ?

More of the same ? or worse after Funding solutions come through ?

Of course a Cap Raise may see control go elsewhere and may well be a final nail in the coffin for existing holders
then minimalised. No major contributor for a Cap Rise is likely to be attracted without either substantial benefits
or at worst an exit strategy ..

[blackcap]

End of the day, shareholders wanted the repower, how it is going to be funded is another question but the repower surely is the right thing to do by shareholders

How do you know the shareholders wanted the re-power? I am a shareholder and I want them to run down the existing assets till they are worthless and take the cash flows this provides and return the cashflow to me the shareholder.

Re-powering without subsidies or with, is going to cost more than it will generate. A real nail in the coffin. Not something I am getting excited about.

[fish]

How do you know the shareholders wanted the re-power? I am a shareholder and I want them to run down the existing assets till they are worthless and take the cash flows this provides and return the cashflow to me the shareholder.

Re-powering without subsidies or with, is going to cost more than it will generate. A real nail in the coffin. Not something I am getting excited about.

Largely agree .
They seem to have two aims-the first to repower with fewer and larger turbines and secondly add new large turbines on the boundary .
I am concerned about recent posts that seem to be down ramping suggesting that the existing turbines will be disposed before completing their economic life .
That seems stupid so I cannot believe this is planned .
I suspect the plan is to install the new turbines over a few years on the boundary and over decades as the existing turbines become uneconomic .

[flyinglizard]

https://environment.govt.nz/assets/what-government-is-doing/fast-track/Te-Rere-Hau/077.18-covid_19_-recovery-fast_track-consenting-referred_-projects_-amendment_-order_No-8-2022_Redacted.pdf

2.1 generating employment by providing approximately 197 direct full-timeequivalent (FTE) jobs over a 3-year construction period, and 40 direct ongoingFTE jobs once construction is complete

how can it feed 197 FTE during 3 year construction and 40 FTE after construction completion? plus over 1 million consulting fee to some members in board? consulting fee..... pretty much like kiwibuild, light rail etc.....

[flyinglizard]

How do you know the shareholders wanted the re-power? I am a shareholder and I want them to run down the existing assets till they are worthless and take the cash flows this provides and return the cashflow to me the shareholder.

Re-powering without subsidies or with, is going to cost more than it will generate. A real nail in the coffin. Not something I am getting excited about.

You got my nearly 1 million shares vote. I support you to replace current board member.

[kiora]

From memory original float was for $100m?
Didn't they then do capital raise for another $20m a long the way?
And they only recently brought back transmission lines?

Quite a lot of "depreciation" there

Capitalized value now at $50m?

If repowered, capilisation would be?

What sort of return is it likely to be?

Have been an investor along the way but not now thanks

[flyinglizard]

From memory original float was for $100m?
Didn't they then do capital raise for another $20m a long the way?
And they only recently brought back transmission lines?

Quite a lot of "depreciation" there

Capitalized value now at $50m?

If repowered, capilisation would be?

What sort of return is it likely to be?

Have been an investor along the way but not now thanks


Market value = 38.9m today
debt = 9.1m
Net Assets = 5.2m, this could be nearly zero after write down old turbines.

then they are going to run a at least $20m + project, under such sky-high interests rate lending market. That comes from $1m+ consulting idea............ without government funding or sell this company with consent, this is a commit suicide.

Currently cannot find the balance sheet, income statement and cash flow statement from their annual report.

[kiora]

Thanks FL for more accurate financials. Shows how little I follow this Co. & confirms for me really where I rank it
"Buffett: The biggest investing opportunities are 'other people doing dumb things'"
https://finance.yahoo.com/news/buffett-the-biggest-investing-opportunities-are-other-people-doing-dumb-things-115755161.html
Says a lot really

[whatsup]

I just hope that the Left/Labour/Greenies are taking note of what does go wrong with unreliable power generators, better to stick to reliable sources, water, coal & oil.

[Not too Flash]

Trading Halt ....

Capital Raise ?

[ronaldson]

More likely an announcement around consenting.

[ronaldson]

Yes, he presto and halt lifted.

Consent granted to repower and reconsent the Te Rere Hau wind farm, decommissioning up to 90 old two blade turbines and replace with up to 30 new three bladed turbines and redesign and optimise the layout including a 100Ha increase in land area. Amazingly this allows a five fold increase in energy production from 100 GWh's to 500 GWh'rs which would then be 27% of NZ's wind production capability.

And not covered by that consent is the supporting application to seek fast track consent for a new windfarm development on the boundary of that existing wind farm to add another 9 three bladed turbines (the Aokautere project).

But just this first approval is very significant news although no doubt development costs will be a hurdle.

[Jaa]

Comparison with two nearby newly constructed wind farms.

Mercury's Turitea built in 2021/22 uses 3.6MW turbines:


"The first stage of the wind farm was 33 turbines, at a cost of $256m, while the second stage was a 27-turbine, $208m project."

"The 33-turbine Turitea wind farm will contribute $30 million a year to earnings, assuming an average generation price of $75/MWh."

https://www.nzherald.co.nz/business/mercury-building-a-256-million-wind-farm-near-palmerston-north/XB5YFDWTY7YSGDIQRKVGCNNODA/

= Cost: $7.7m per turbine
= Earnings: 909K per turbine

Meridian's Harapaki under construction now uses 4.3MW turbines


"41 units of SWT-DD-120 turbines, each with 4.3MW nameplate capacity."

"Harapaki wind farm in Hawkes Bay, highlighting an expected $53m (13%) increase in costs. This will increase total project capital costs from the original $395 million announced in February 2021 to $448 million."

https://businessdesk.co.nz/article/markets/meridian-energy-profits-up-but-faces-wind-farm-cost-overruns

= Cost: $10.9m per turbine

So NWF's 30 turbines could cost $200-300m? Much of the work on NWF's site could be resused but they will still need to upgrade power connections, substations, tower foundations etc. I assume Meridian and Mercury have more internal staff and can negotiate better prices too. Also Meridian's troubles show inflation is a major risk.

[ratkin]

With hindsight those Two blade turbines were a big error, or am I wrong on that one?

[ronaldson]

With hindsight those Two blade turbines were a big error, or am I wrong on that one?

I don't know how long the windfarm has been operational but the underlying technology/production capacity advanced very quickly.

Jaa has some thoughts around cost but an existing site will have savings over a greenfield development, and the so-called Aokautere Project intended adjacent will leverage that also if it proceeds. I wonder what write down will need to be taken on the 90 old two bladed turbines to be decommissioned, or indeed if they have resale value?

[Dassets]

Well done to the team. That is value add imo.

[Grimy]

I also see it as a value add (and you should know better than anyone here Dassets). Does having this consent make them more favourable as a take-over target to any of the larger players?

[shareman]

Well done to the team. That is value add imo.

Definitely a big milestone for the company, well done

[RTM]

I also see it as a value add (and you should know better than anyone here Dassets). Does having this consent make them more favourable as a take-over target to any of the larger players?

Great question and what I have been wondering to. Are the consents transferrable to someone buying them ? I imagine so.
I hold a small number because I was hoping they will at some stage be a takeover target for one of the bigger companies.

[Dassets]

Great question and what I have been wondering to. Are the consents transferrable to someone buying them ? I imagine so.
I hold a small number because I was hoping they will at some stage be a takeover target for one of the bigger companies.
Consents attach to the land. An agreement between the landowner and the generator/operator covers all the rights and obligations of each of the parties. It is normal that such an agreement is transferable to other parties. There may be conditions for the transfer but will be minor and more administrative in nature.

Putting it another way, no-one would spend $millions on a consent if they couldn't use or benefit from that spend. Not that it truly matters but NWF own several of the properties that these turbines will sit on. Owning them means you don't pay royalties to a 3rd party and you don't need to negotiate a landowner agreement. It is not critical to own the land but it may be attractive and helpful to the overall project. .

[Grimy]

Thanks for your insight. I've been a holder since day one (although a much reduced holding now). I look forwards to the next chapter-whichever way it goes.

[Walter]

Contacts unconsented proposed wind farm in Southland will generate about twice as much power and cost $700-900 million. NWF repowering consent talked about $260 million as the cost of replacing existing turbines with the new ones. NWF current market cap is $38 million, so there appears to be some money on the table.

[shareman]

End of the day, NWF has never delivered the sort of returns that were initially promised in the IPO, let's hope this situation is rectified somewhat

[Walter]

True Shareman. A bidding war would be nice, but I'm not holding my breath.

[nztx]

True Shareman. A bidding war would be nice, but I'm not holding my breath.


Some prime Windy Real Estate above Palmy must be worth something - with the right timing, an opportunity
to rekit the estate up in the newer technology of bidder's choice ..

[shareman]

I see the Aoukatere project is referred, would make sense to do them together for economies of scale

[Grimy]

Did anyone watch today's presentation? I did mean to but was otherwise engaged.

[Sideshow Bob]

https://www.nzx.com/announcements/420505

NZ WINDFARMS LIMITED: MARKET UPDATE: TE RERE HAU WIND FARM REPOWER COMMERCIAL TERMS – MERIDIAN PARTNERSHIP, MERIDIAN PLACEMENT AND SHAREHOLDER RIGHTS ISSUE

NZ Windfarms Ltd: (NZX Code: NWF) is very pleased to announce that it has reached agreement with Meridian Energy Ltd (NZX code: MEL) (Meridian, New Zealand’s largest electricity generator) to pursue the development and repower of Te Rere Hau wind farm, subject to conditions including NWF shareholder approval and Final Investment Decision by both parties which includes satisfactory consenting, third party contracting and financing arrangements.

As part of the commercial terms, NWF will today make a placement of 43.2m NWF shares to Meridian, amounting to 15% of its existing equity capital, totalling $6.7m, at a price of $0.155 per share. This represents a premium of 32% to the current market price of NWF shares ($0.117 per share on 25 October). Meridian will then have a 13.04% shareholding in NWF.

NWF will also undertake a pro-rata renounceable 1:8.5 rights issue of approximately 39.0m shares to existing NWF shareholders at a price of $0.155 per share (the same price as the Meridian placement), raising up to approximately $6.0m (Offer).

The Offer will be underwritten by Meridian up to approximately 28.8m shares (being up to approximately $4.5m).

The Board is delighted that Meridian is prepared to become a supportive minority shareholder in NWF, augmenting our agreed commercial terms and providing NWF with a platform for future growth. The NWF Board will invite Neal Barclay, the CEO of Meridian, to join the NWF Board (non-remunerated) after the annual shareholders meeting.

A Letter to Shareholders setting out further particulars and important information accompanies this announcement.

For further information, contact Warren Koia, Chief Executive, by phone on 06 280 2773, or by email at info@nzwindfarms.co.nz.

[Grimy]

Looking forwards to the details.