Contact Energy - CEN Chart

[Beagle]

On the chart, CEN daily SP is basing now at a historical support, the 200MA and the 61.% FIB retrace from Covid-low to the insane spike-high recently. It is and remains in a severe short term down-trend. It's concerning that this and the other 'boring' energy shares have gone from steady SP rises and healthy returns over years - to incredible capital volatility.

Good warning chart mate. Gentailiers all put on a LOT of weight when interest rates were falling to unprecedented lows and much more when the madness of ESG hype took over all rational analysis. I expect the exact opposite to happen as the 10 year Govt stock rate increases. Definitely a sector to underweight in my opinion for the foreseeable future.

[winner69]

Suppose Snoops covred this off but does the change in dividend policy mean we can see lower dividends in the next few years or so than we have got.

[winner69]

Good warning chart mate. Gentailiers all put on a LOT of weight when interest rates were falling to unprecedented lows and much more when the madness of ESG hype took over all rational analysis. I expect the exact opposite to happen as the 10 year Govt stock rate increases. Definitely a sector to underweight in my opinion for the foreseeable future.

The yield curve is steepening pretty quickly -- the 10/2 is close its highest level since 2014 .....hmmmm

[Snoopy]

Suppose Snoops covred this off but does the change in dividend policy mean we can see lower dividends in the next few years or so than we have got.

My attempt at looking at this was post 1978. That shows both 'dps' and 'eps' to be higher than before once Tauhara is built (the quoted post shows dividends and earnings projections under the old dividend policy, and without Tauhara). But these projections do not include the effects of taking older stations permanently off line (if that occurs), and generally reduced generation from the existing Wairakei power plants. I haven't been able to work out how to quantify those effects.

SNOOPY

[winner69]

My attempt at looking at this was post 1978. That shows both 'dps' and 'eps' to be higher than before once Tuahara is built (the quoted post shows dividends and earnings projections under the old dividend policy, and without Tuahara). But these projections do not include the effects of taking older stations permanently off line (if that occurs), and generally reduced generation from the existing Wairakei power plants. I haven't been able to work out how to quantify those effects.

SNOOPY

Its just that I looked at the average of preceding 4 years cash flows and they are declining which implies lower dividends for 2021 (which we know about) and 2022 ....and on a per share basis that's before the cap raise

[Snoopy]

Its just that I looked at the average of preceding 4 years cash flows and they are declining which implies lower dividends for 2021 (which we know about) and 2022 ....and on a per share basis that's before the cap raise

You could be right Winner. My analysis is assuming 'average' generation over the last four years (not a declining trend) and relates to the period after Tauhara is up and running in 2023 and after that. I believe the decline in cashflow you have observed over the last four years is weather related and not a structural issue within Contact. I have 'looked through' the Tauhara construction phase as well. During construction you are 'spending' cashflow and getting no return. So it follows that over the next couple of years during construction free cashflow is liable to be down.

SNOOPY

[Beagle]

The yield curve is steepening pretty quickly -- the 10/2 is close its highest level since 2014 .....hmmmm

10 year has gone from 1.0% to just over 1.5% in February and look what's happened to the market this month.
CEN building a whole lot more capacity when demand growth for electricity is very modest and on a whole bunch of more shares. Hmmm Not for this dog.

[Beagle]

....................duplicate post deleted(website is running a bit strange).

[Snoopy]

10 year has gone from 1.0% to just over 1.5% in February and look what's happened to the market this month.
CEN building a whole lot more capacity when demand growth for electricity is very modest and on a whole bunch of more shares. Hmmm Not for this dog.

Not an issue for Contact Energy Beagle. Tauhara is the perfect replacement for Unit 5 at Huntly. Only Genesis Energy shareholders need worry.

SNOOPY

[Jiggs]

Thank you for all your recent analysis. I don't understand it all, but I do understand I have made a 54% profit from buying and selling Contact over the past 2 years, but a 4% loss over the past month, and as this cow is no longer giving me any milk (wrong metaphor I know) I have just taken her out of my herd. When it looks like she's come into calf again, I might bring her back in again.