CEN-how will it do in a drought

[fish]

Hydro lakes are close to normal levels but daily inflows are dropping rapidly and with no rain forecast for next 7 days at least and the ground very dry it looks like levels will also fall .
How will this affect contacts profits ?

[fish]

Found the answer for 2012-Looking out to 2012 CEN says it could earn as much as NZ$750m in EBITDAF during a dry year period and NZ$500m during a wet year. These figures suggests both dry and wet year upsides could be achieved with portfolio flexibility, reduction in transmission constraints and rolling off of the onerous take or pay gas contracts.

[fish]

The sp of cen looked strong at close today . cen earnings should now start rising and more geothermal energy coming on line will help . I think the sp should soon match that of trustpower-historically they have been similar .
CEN is downrated because of poor public relations but they still have a good customer base and nz electricity use is rising faster than production-especially in a drought year-and it looks as if we will see little rain this month .

[fish]

http://www.electricityinfo.co.nz/comitFta/ftaPage.main

Wholesale powerprices in Auckland are now in the red zone .

[fish]

http://www.electricityinfo.co.nz/comitFta/ftaPage.main

Wholesale powerprices in Auckland are now in the red zone .

Wholesale power prices remain red hot-look at the above link . With the ground dry and hydro inflows 73% normal and demand up .

I have owned contact since it listed . I did sell out a couple of years ago at close to $10 and have over the past year been buying quite a substantial holding . I last bought on the day of the prc tragedy-I also bought prc and nzo which was stupid and had too many eggs in one basket . I have no intention of selling cen again -unless it becomes over-priced by the market -?around $10 again which could well happen in the next 2 years .

In my opinion this is the most under-priced low risk stock on the market . Suggest everyone look at it and make their own decisions

[fish]

Spot prices for electricity are now about double what they were a week ago -and that was many times multiple of what they where last year .
Hydro inflow is now 71% average and demand is higher than last year .
ok it is going to rain but the moisture deficit in the north island is extreme so most of the rain will end up being held by the soil.
Will be exciting watching the sp if this trend continues and cen profit escalates

[macduffy]

High spot prices are to the advantage of those companies that have an excess of generating capacity compared to their retail/commercial client requirements. And vice versa, of course.

From memory, CEN are in the first category?

[fish]

Correct McDuffy . Also they have the lowest costs for additional generation .
I believe that the high spot prices and increasing demand will lead to a re-rating of future fixed price contracts .
CEN to me seems grossly undervalued and it would be great if others could do their own research and post their opinions .

[CJ]

High spot prices are to the advantage of those companies that have an excess of generating capacity compared to their retail/commercial client requirements. And vice versa, of course.

From memory, CEN are in the first category?

I think they use to be balanced before they pissed of their retail customers (price and directors fee hikes at the same time). Maybe it was a deliberate ploy?

[Voltaire]

Spot prices for electricity are now about double what they were a week ago -and that was many times multiple of what they where last year .
Hydro inflow is now 71% average and demand is higher than last year .
ok it is going to rain but the moisture deficit in the north island is extreme so most of the rain will end up being held by the soil.

At the risk of thread-jacking, these are all sounding like good reasons to be looking at NWF (disc. I hold)

(Incidentally, any rain following drought tends to run straight to waterways as the land is parched and, initially at least, has no capacity to absorb it).