Contact Energy - CEN Chart

[Jaa]

There was a great story the other day in the Herald about changes at the Norske Skog pulp and paper mill in Kawerau. They are shutting down one line which will half their electricity demand by 65MW and plan to have their own 22MW geothermal plant online by the end of the year. That's almost a year's worth of normal" electricity demand growth.

These changes will affect Might River more than Contact but are clear evidence of Contact's expectation of zero or low electricity demand growth over the next few years.

http://www.nzherald.co.nz/business/n...ectid=10841322

[Hoop]

One just have to think outside the square such as LED street lighting and Zero Energy homes/businesses and it becomes clear that a country would need to have a huge increase in either population or industrial growth to justify a planned increase in power consumption in the future.

I looked outside and I see that Rotokauri Campus (Avalon Wintec) have erected a wind turbine.

[CJ]

One just have to think outside the square such as LED street lighting and Zero Energy homes/businesses and it becomes clear that a country would need to have a huge increase in either population or industrial growth to justify a planned increase in power consumption in the future.

I looked outside and I see that Rotokauri Campus (Avalon Wintec) have erected a wind turbine.

CEN has acknowledged that there will be no increase in demand going forward. Any efficiencies you mention will be offset by the population growth I would expect.

[gonzo56]

Attachment 4160

Ill just leave this here..
Check out the OBV trend breaking above the long term downtrend, retesting it, and then reversing. Interesting ay

I was just going to comment on the turnaround! A bit late I see.

[macduffy]

How's this for a theory?

I read recently in the AFR that CEN's parent, Origin Energy, will be facing the prospect of raising additional funding to pay for the cost blowouts in their Gladstone LNG plant. Opinions vary as to the amount and urgency of the funds needed but one broker thinks they will need at least $1b in the next few months. All seem to agree that the alternatives are a $1b equity issue; more debt; or asset sale(s). To complicate matters, S and P have apparently signalled a credit rating downgrade if the debt option is taken.

Now Origin own 52% of CEN worth, say, NZD1.9b or thereabouts. As we know, they have made a couple of attempts to take full ownership but have been thwarted by "minority" holders who have demanded a higher price. I'm speculating that they might be tempted to sell out now and be done with this pesky NZ investment, a fairly minor part of their portfolio and one which hasn't performed particularly well for them. With the delays to the partial SOE sales, the next few months would seem to be a good time to do this if they are so inclined, particularly with all the cash that is said to be sloshing around the NZ market from the FPA takeover, GPG bond redemption, etc.

Just a thought.........

[percy]

Very interesting thought.

[CJ]

Just a thought.........

Very interesting thought.

Sell to who though. It is too big for a retail offering like STU did. And a single buyer would risk having to make an offer to all other shareholders, making the cost very uncertain (though if they buy low enough, then they can guarantee the uptake would be close to zero).

Only buyer I can think of are the Greens/Labour and they wont have any money till 2014 at the earliest.

[macduffy]

I had in mind that it would be an institutional/retail offer - to appeal to all those investors who were lining up to have a piece of Mighty River, Meridian, Solid Energy etc, which now look to be down the track a bit. Certainly, it couldn't be like the STU placement where most investors weren't aware until after the event. Rather, it would take a fair bit of work, publicity etc and the brokers/managers to the issue would have to put in a bit of effort to earn their fee!

[CJ]

A full 're-listing' to take the glory out of the governments MOM. Probably the only way to offload $2B worth of shares but timing for that has to be bad given the MOM. If the govt loses in the courts, then this could be a good option for Origin.

[troyvdh]

gee CEN has been thrashed again.....excitement about higher divs have evaporated....who/whats to blame....global warming or this ridiculous notion that being energy efficent is a good thing...ba humbug....