Genesis shares fall on guidance revision
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More news: Shares in Genesis Energy lowered at the start of trading on the ASX after the New Zealand energy retailer advised that lower-than-expected production at its Kupe gas field would result in a reduction to its full-year earnings.
Shares were down 3.8% to $2.03 by 10:35am AEST.
Genesis Energy cuts FY guidance on lower gas production
The news: New Zealand energy retailer Genesis Energy has advised that lower-than-expected production at its Kupe gas field will result in a reduction to its full-year earnings.
The numbers: Genesis said that the setback will trim the company's FY24 EBITDAF guidance by between NZD15 million ($13.7 million) and NZD20 million, from the previously guided figure of NZD430 million.
The ASX- and NZX-listed company, which is 51% government owned, has a 46% interest in the Kupe gas field, which supplies gas to Huntly Power Station, the largest thermal power station in New Zealand.
In November, Genesis announced that it would use profits from Kupe to support its Gen35 strategy, a NZD1.1 billion investment in expanding renewable energy. The strategy aims to grow the company's renewable portfolio from 3200 gigawatt hours (GWh) to around 8300 GWh, in line with New Zealand’s target of 95% renewable generation by 2035.
The context: New Zealand’s third-largest power generator confirmed that FY25 financial planning is underway as normal, and will include an assessment of updated Kupe production levels and reserves.
What they said: Genesis CEO Malcolm Johns said: "Gas production across New Zealand continues to decline faster than expected and as previously stated, less gas means more coal. This reinforces the importance of Gen35 and Genesis remains focused on its long-term strategy".
The source: ASX announcement
