Genesis Energy slashes FY25 guidance on lower gas production
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The news: Genesis Energy has revised down its FY25 earnings guidance, as the New Zealand energy retailer cited a "challenging short-term outlook" for the country's gas market.
The numbers: Genesis said FY25 EBITDAF is now expected to be around NZD460 million ($421 million), an 8% reduction on the company's previous guidance of NZD500 million, which it reaffirmed in February.
The ASX- and NZX-listed company, which is 51% government owned, noted that FY25 operating expenditure remains in line with expectations, with capital expenditure for the year expected to be around NZD180 million.
This includes around NZD80 million growth spend relating to a grid scale battery at Huntly Power Station, with final investment decision expected by CY24.
The context: New Zealand’s third-largest power generator confirmed that lower gas production is expected at its Kupe gas field, after Genesis warned of a setback at the site last month.
Genesis had announced that lower production would trim the company's FY24 earnings, and result in higher generation costs due to increased use of higher-cost solid fuel.
What they said: Genesis CEO Malcolm Johns said: "The current gas market conditions are driving a challenging short-term outlook for the country; less gas means more solid fuel and higher generation costs for Genesis".
"The company remains focused on executing our long-term strategy to accelerate development of new renewable generation and battery storage, reposition Huntly into a grid-scale peaking and firming facility and displace coal with biomass," he said.
The source: ASX announcement
