GNE - Genesis Energy

[couta1]

And now a forecast EBITDAF downgrade... Poor old couta

At a $1.45 average and no change to the divvy forecast i wouldnt mind if the rest of my portfolio looked this poor

[Beagle]

Genesis Energy today confirmed that it expects to pay a FY2015 final dividend
of 8 cents per share in October this year, in line with the Prospective
Financial Information (PFI).

Spot the missing two words...fully imputed. I think some of this downgrade has already been factored into the SP with their previous commentary about headwinds but this is a bit of a kick in the guts nonetheless.

[couta1]

Spot the missing two words...fully imputed. I think some of this downgrade has already been factored into the SP with their previous commentary about headwinds but this is a bit of a kick in the guts nonetheless.

Still even with zero imputes I'm still looking at around 11% gross return on my buy in so not complaining Roger.

[robbo24]

Spot the missing two words...fully imputed. I think some of this downgrade has already been factored into the SP with their previous commentary about headwinds but this is a bit of a kick in the guts nonetheless.

Yeah - could actually be some good buying coming up, if you do your math right

[Joshuatree]

From $95 million NPAT to $85 to $95 million .Bummer.

[Beagle]

Still even with zero imputes I'm still looking at around 11% gross return on my buy in so not complaining Roger.

You did well with the IPO mate, no question about that.

Yeah - could actually be some good buying coming up, if you do your math right

Agreed, my abacus is currently in over-drive

[sb9]

Still even with zero imputes I'm still looking at around 11% gross return on my buy in so not complaining Roger.

Absolutely, I'm in the same boat. Happy with my IPO holding along with recent bonus shares and divvys all along, its been good ride and happy to stay on board

[Beagle]

Absolutely, I'm in the same boat. Happy with my IPO holding along with recent bonus shares and divvys all along, its been good ride and happy to stay on board

I got in for the yield and as a natural hedge against the ever ramping power prices...at least through to about 2012. As previously mentioned the imputation thing has diminished the attraction and my conviction considerably along with continued customer losses which I see continued in the latest quarter. Glad I sold out the majority of my holding ex divvy in the mid-late 220's. What worries me and previously not mentioned is this, at a retail level we were paying circa 25 cents per kwh including GST 3 or 4 years ago in Auckland with Genesis, a price that escalated every year till about 2012. We are now one year through a 3 year price lock contract with what was formerly known as Just Energy, (don't know their new name and frankly don't care for another 2 years) at just on 17 cents a kwh incl GST. That's 32% less than Genesis was.

I am sure Genesis have had to reduce their tariff's to somewhat compete with all the new retail entrants but it certainly puts price pressure on them indefinitely and competition will probably intensify further.
Given transmission costs are a major component of this retail 17 cents a kwh, (and granted we are paying a higher daily fixed rate), I believe this gives a graphic illustration of exactly how intense the retail competition has become. See announcement that wholesale rates we $92 mwh that's a wholesale cost of 9.2 cents a kwh plus GST = 10.58 cents per kwh incl GST so only another 6.4 cents per kwh incl GST to cover transmission costs and retail margin, crikey that's pretty efficient retail and transmission rate isn't it !!

Further...GNE are making the lower forecast while they have good hedges on their share of the Kupe oil...hedges that run out in due course. OTOH initial field re-evaluation testing on the Kupe well has shown positive results so maybe we'll get a longer life than the currently projected 2027 ?

Very hard stock to put a price on now but my instinct says its probably a bit less than the $2.00 I arrived at the other day now they've clarified the extent of the headwinds.

[Jantar]

I sold 2/3 of my GNE holding this morning. What I have left after deducting today's yield and the dividends so far received means that I have effectively paid only $0.21 per share. I'm happy to hold at that and maybe even buy back in if the price drops significantly below $2.00

[Beagle]

I sold 2/3 of my GNE holding this morning. What I have left after deducting today's yield and the dividends so far received means that I have effectively paid only $0.21 per share. I'm happy to hold at that and maybe even buy back in if the price drops significantly below $2.00

Likewise. To me, (others will no doubt take a different view) this stocks needs to have a gross yield of 10% to make it attractive. No growth and smelter risks are why I require this yield from this stock (as a minimum).
Now the guessing game commences, what's their sustainable dividend going forward ? (Ignore the initial promise of 8 cps to save face regarding the IPO).