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  1. #1731
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    Had to happen, however more likely good news for CEN as from this they will have the odd outstanding (dry) year as the only thermal generator of scale. This supports their retention of CCGTs beyond 2018.

    Key thing for GNE holders is what is the company's strategy for the future? Can it become a renewable developer? Can it become an innovative low cost to serve retailer?

    One other effect is an improvement in GNE balance sheet as enables them to burn a stockpile of 700kt of coal @ say $100/T thats $70m of invenetory no longer req'd.

  2. #1732
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    Quote Originally Posted by Traderx View Post
    Had to happen, however more likely good news for CEN as from this they will have the odd outstanding (dry) year as the only thermal generator of scale. This supports their retention of CCGTs beyond 2018.

    Key thing for GNE holders is what is the company's strategy for the future? Can it become a renewable developer? Can it become an innovative low cost to serve retailer?

    One other effect is an improvement in GNE balance sheet as enables them to burn a stockpile of 700kt of coal @ say $100/T thats $70m of invenetory no longer req'd.
    Well spotted. That'll be good for helping to pay close to 100% of free cash flow as dividends but won't help with there imputation credit account which if analysts actually understood how they work it would be clear that in the medium term it is simply not plausible to claim the company can continue to pay 100% fully imputed dividends.

    Xerof - Gentailers are a difficult and challenging animal to analyse. I think FNZ have simply glossed over the ICA issue or maybe the company will pre-pay a huge amount of tax before its due to keep the façade of full imputation alive as long as possible to avoid egg on face for our dear Dame Jenny. Who knows but Snoopy and I are bang on the money, its simply impossible to pay fully imputed dividends in the medium term when a significant proportion of future dividends are paid from free cash flow as opposed to after tax profit.
    I own a modest stake on the basis that I understand imputation credits are able to be credited to shareholders at circa 2/3rd's of the full 28% rate in the medium term. Some imputation is better than none like SUM shareholders get
    Last edited by Beagle; 06-08-2015 at 11:14 AM.

  3. #1733
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    Quote Originally Posted by Traderx View Post
    Had to happen, however more likely good news for CEN as from this they will have the odd outstanding (dry) year as the only thermal generator of scale. This supports their retention of CCGTs beyond 2018.
    Traderx, with the greatest of respect, I suggest that you have misinterpreted GNEs announcement today. The announcement was of the closing of Units 1 and 2 at Huntly in 2018. Genesis only kept those to fulfill the swap contract they have with Meridian Energy, a contract that will wind up around 2018. Unit 1 and Unit 2 are not used much any more because they are far less effficient that the much newer Unit 5. Unit 5, the main power generating plant at Huntly, at 400kW, is no minnow. You can hardly say that GNE will cease being a thermal generator of scale!

    Genesis will keep Unit 5 at Huntly going as the downstream match for their contracted Kupe gas reserves.

    SNOOPY
    Last edited by Snoopy; 06-08-2015 at 02:16 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  4. #1734
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    Quote Originally Posted by Snoopy View Post
    Traderx, with the greatest of respect, I suggest that you have misinterpreted GNEs announcement today. The announcement was of the closing of Units 1 and 2 at Huntly in 2018. Genesis only kept those to fulfill the swap contract they have with Meridian Energy, a contract that will wind up around 2018. Unit 1 and Unit 2 are not used much any more because they are far less effficient that the much newer Unit 5. Unit 5, the main power generating plant at Huntly, at 400kW, is no minnow. You can hardly say that GNE will cease being a thermal generator of scale!

    Genesis will keep Unit 5 at Huntly going as the downstream match for their contracted Kupe gas reserves.

    SNOOPY
    Yes they will still be a player, but essentially they have more than halved their capacity.

    Correct me if I am wrong but this is what thermal capacity will look like post 2018 assuming no further plant closures/construction

    GNE - 450MW
    Todd - 100MW
    TPW - 5MW
    MEL - zero
    MRP - zero
    CEN - 1132MW (400 ota 377 stfd 155 whir 200 stfd peak)

    Also - GNE have in the past matched their customer portfolio to hydro + unit 5, so unless they are looking to offload customer volume they will essentially run a more balanced portfolio with limited capacity to ramp unit 5 production to say respond to high market prices (generalisation there).

    So I would say the "swing" capacity in the market in a dry year scenario sits with CEN post 2018.
    Last edited by Traderx; 06-08-2015 at 02:56 PM.

  5. #1735
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    new lows today as broken thru 1.70 support, weekly has 1.50 ipo price as a possible price time target.

    Doesn't help when they are the runt of the pack
    one step ahead of the herd

  6. #1736
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    https://www.anzsecurities.co.nz/Dire...spx?id=3934174 Interesting announcement - It appears they are looking for efficiencies which is good

  7. #1737
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    In it for the dividend play.

  8. #1738
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    Some interesting comments in this article:

    http://www.stuff.co.nz/business/indu...better-profits


    "it is possible that Genesis might not end up shutting down its coal-fired station at Huntly after all, Binns said on Wednesday, closing the potential gap in power capacity. With Contact's plan to shut Otahuhu, Genesis' Huntly station became much more profitable."

    ""It will be interesting to see, with the spate of (closure) announcements in the past two weeks whether Genesis might reconsider its position at Huntly, Binns said, after Contact announced plans to shut the 400megawatt Otahuhu station."

    "But Contact's decision to shut Otahuhu made the Huntly coal-fired units "significantly more profitable" according to Meridian chief financial officer, Paul Chambers."

    "Our modelling shows that somebody with some gas can make some money (in 2019) so it is a question of who it is going to be," Binns said. While not predicting that the gap would be filled by a gas-fired station, there was "enough gas around".





    Also, annual results are out next Tuesday. Should be very interesting. Hopefully they have rampant customer losses under control without too much discounting.

  9. #1739
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    Quote Originally Posted by Roger View Post
    Xerof - Gentailers are a difficult and challenging animal to analyse. I think FNZ have simply glossed over the ICA issue or maybe the company will pre-pay a huge amount of tax before its due to keep the façade of full imputation alive as long as possible to avoid egg on face for our dear Dame Jenny. Who knows but Snoopy and I are bang on the money, its simply impossible to pay fully imputed dividends in the medium term when a significant proportion of future dividends are paid from free cash flow as opposed to after tax profit.
    I own a modest stake on the basis that I understand imputation credits are able to be credited to shareholders at circa 2/3rd's of the full 28% rate in the medium term. Some imputation is better than none like SUM shareholders get
    CEN divvy = no imputation at all

    MEL divvy = partial imputation

    GNE = probably partial imputation based on your maths

    Seems to be the way several generators are going - paying out closer to FCF rather than NPAT with a resulting shortfall in IC's. So maybe not so bad after all. Deosn't make GNE "the odd one out"

    Keeps the headline dividends high but leaves many investors with more year-end tax to pay. Maybe a share buy-back would be more tax efficient, but of course this may not be the "look" the board is targeting

  10. #1740
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    Quote Originally Posted by sharp View Post
    In it for the dividend play.
    Good dividends.

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