NWF - NZ Windfarms

[Grimy]

any thoughts on Mercury taking an 'interest' in NWFs operations ?

https://www.nzherald.co.nz/business/...ectid=12216660

Sounds like they are doing their own thing completely. I guess it takes out one possible purchaser of NWF. I doubt you'd go with Vestas turbines and then saddle yourself with something completely different as well.

[Blendy]

any thoughts on Mercury taking an 'interest' in NWFs operations ?

https://www.nzherald.co.nz/business/...ectid=12216660

Yes I saw that article too, and I'm not clear on NWF's involvement? I've been hoping that it would be picked up by one of the energy companies. My first thought when I read the article was 'why didn't they buy NWF?' but I haven't looked closely enough to see if their 'interest' is that.

At least it raises the public profile of windfarms in nz...

[Well Endowed]

"first of a potential investment of upto $750m."

Still might still make sense that they look at buying out NWF if the logistics work, same region, similar infrastructure (obviously different turbines). but economies of scale, no need for the ridiculous hedging etc

[Jaa]

More like, it makes obvious the opportunity to re-power NWF with 3.6MW Vespas turbines.

Guess it would need new consents. It will happen one day...

[Grimy]

https://www.nzx.com/announcements/324926

I guess the board's update on FNZC's progress on advising them will be interesting.

[Jantar]

I have been doing some thinking around the hedging policy that NWF have and I think they have stuffed it up a bit. …..

If NWF have been selling hedges then they have stuffed it up big time. For the very reasons that you stated intermittent generators should never sell hedges, they should buy them.
Imagine if they bought hedges at $75 per MWh and the price went to $200, that is a massive profit. Yet if the price is low and came in at only $50 then the loss is limited to $25 for each MW hedged.

[blackcap]

If NWF have been selling hedges then they have stuffed it up big time. For the very reasons that you stated intermittent generators should never sell hedges, they should buy them.
Imagine if they bought hedges at $75 per MWh and the price went to $200, that is a massive profit. Yet if the price is low and came in at only $50 then the loss is limited to $25 for each MW hedged.

They have/had been selling hedges to ensure a certainty of profit/revenue. At about the $85 mark. Huge downside potential (which has caught them out big time) but also limited upside potential. To be fair the average price is $55-$75 so I can understand selling a quarter of expected production at $85.

[blackcap]

Not sure what is going on with this company but the announced shortly after the AGM last year that they would be looking at selling the assets and or the company (my words but what I inferred) and announced something similar to market not long after. A good half year later and no update.
Also note that of the board members recently appointed, Rob Foster have taken on executive roles as interim CEO. That is a bit of a red flag in my book.
I also note the "interim"... lets move on and get a new CEO, or actually do not get a CEO just an operations manager to run the company would be enough in my book for a company that produces about $8m of revenue from 1 source and has limited expenses. Time to step it up board or maybe time to get a new board?

[Well Endowed]

I still could see NWF being picked up cheaply by Mercury. Fits strategically and geographically. They seem to be most active in the renewable space also ponying up for 19.99% of Tilt too. NWF wouldn't cost the earth and might allow them to extract decent value from the asset with their gentailer customer base (and reduced restrictive hedging costs). Realistically I think a 16c a share offer would be hard to turn down for most holders here. All in my opinion of course.

https://www.nzherald.co.nz/business/...ectid=12216660


but also agree, the silence here has been interesting... will wait and see

[blackcap]

I still could see NWF being picked up cheaply by Mercury. Fits strategically and geographically. They seem to be most active in the renewable space also ponying up for 19.99% of Tilt too. NWF wouldn't cost the earth and might allow them to extract decent value from the asset with their gentailer customer base (and reduced restrictive hedging costs). Realistically I think a 16c a share offer would be hard to turn down for most holders here. All in my opinion of course.

https://www.nzherald.co.nz/business/...ectid=12216660


but also agree, the silence here has been interesting... will wait and see

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

They are paying $256m to build this thing generating income of $30m. NWF generates about $8m of earnings, so a simple dividing trick yeilds $256m/3.75) is a valuation of $68m for NWF. Divide that by 288m shares and you get a valuation of 23 cents per share. I can only think they costs of NWF are higher and off course the assets have depreciated more and some older technology, but interesting thanks for the link WE.