Genesis Energy Limited · NZX:GNE
Genesis Energy — FY2013 Earnings Presentation
26 slides from Genesis Energy's earnings presentation, Aug 29, 2013
Slide 1: 2013 Full Year Results Presentation
FULL YEAR RESULT 2013 Full Year Results Presentation Focused on Delivering Dame Jenny Shipley CHAIRMAN Albert Brantley CHIEF EXECUTIVE OFFICER Andrew Donaldson CHIEF FINANCIAL OFFICER 29 August 2013 1
Slide 2: Disclaimer
DISCLAIMER This presentation may contain projections or forward looking information (“Forward Looking Statements”). Such Forward Looking Statements are based on current expectations and involve risks, uncertainties and assumptions. Forward Looking Statements are not guarantees of future performance
Slide 3: Introduction
Introduction “Genesis Energy enjoys solid and diversified earnings, has well maintained assets and a loyal and growing customer base.” Dame Jenny Shipley Chairman 29 August 2013 3
Slide 4: Highlights for the year
Highlights Highlights for the year • Growing customer base • Launch of new retail products • Completed major inspection of Unit 5 • Tekapo Canal remediation works • Kupe continuing to provide consistent earnings • TRIFR* of 2.36, 68% lower than 2012 • Net Profit increased to $105m from $86m • Total
Slide 5: Overview
Overview “Genesis Energy has again delivered a strong financial and business performance in 2012/2013 under challenging market conditions.” Albert Brantley Chief Executive 29 August 2013 5
Slide 6: Good customer growth but lower load
Customer Experience Good customer growth but lower load • FY2013 has seen growth in customer numbers • 543,774* electricity customers (+3%) • 115,003* gas customers (+3%) • 9,708 LPG customers (+28%) • Retail volumes are down 1% yoy to 5,354 GWh • Reduced national demand plus higher temperatures *Ba
Slide 7: Improving Customer Mix
Customer Experience Improving Customer Mix • Two key strategies around customers have delivered results in FY2013: • Growing South Island customer base • Growing dual fuel customers • South Island customer increases driven by Tekapo acquisition in 2011 • Now 82,404 customers or 15% of total electric
Slide 8: Customer Innovations
Customer Experience Customer Innovations • MyMeter – smartphone and tablet application to track energy usage remotely • MyEnergyCoach –online service to promote energy efficiency • MyTimeTariff – roll out of multi-rate tariff for electricity customers in Christchurch and Hamilton • Off-peak, shoulde
Slide 9: Better Than Market Churn
Customer Experience Better Than Market Churn • Focus continues to be on reducing cost to serve by reducing churn and increasing retention rates • Despite having the larger numbers in electricity and gas customers, churn rates are lower than rest of the market • Favourable trend versus the market in
Slide 10: Generation Performance
Energy Management Generation Performance • Total generation down 15% to 7,212GWh (8,467GWh in FY2012) • Thermal down 12% to 4,991GWh (5,654GWh) • Renewable down 21% to 2,221GWh (2,812GWh) • Key drivers of lower generation: • Outage of Tekapo A and B power stations for canal works • Lower gas fired g
Slide 11: Huntly Power Stations
Energy Management Huntly Power Stations • Huntly Power Station impacted by lower wholesale prices despite drought conditions in North Island • Coal-fired generation -14% to 2,259 GWh • Gas-fired generation -10% to 2,732 GWh • Unit 3 put into storage on 12 Dec 2012 • Completed first 50k hour major in
Slide 12: Tekapo Canal Remediation
Energy Management Tekapo Canal Remediation • Work on two sections of canal totalling 5,700 metres, over 13 weeks • Stability of canal structure enhanced • Base covered with protective, watertight PVC material • Work finished ahead of schedule on 12 April 2013 • No lost time injuries or any recordabl
Slide 13: Impact of Tekapo Outage - Hydrology
Energy Management Impact of Tekapo Outage - Hydrology • Differences in hydrology between islands drove divergent generation outcomes • Tekapo A and B run hard in H1 in lead up to outage • Significant rainfall in first 2 weeks of January 2013 drove South Island storage to 150% of average • 220 GWh of
Slide 14: Impact of Tekapo Outage - Generation
Energy Management Impact of Tekapo Outage - Generation • Despite hydrology constraints it was uneconomic to compensate for lower hydro generation by increasing Huntly generation • Average prices for generation only jumped in March 2013 • For first time since Tekapo acquisition, Genesis Energy’s own
Slide 15: Kupe Continues to Deliver
Oil & Gas Kupe Continues to Deliver • Continues to be a consistent source of operating earnings • Genesis Energy’s share of gas sales down 5% to 5.6PJ, oil sales down 4% to 509,000 barrels • Mainly reflects a planned outage in Q2 to coincide with the Huntly Unit 5 turbine inspection • Currently asse
Slide 16: People, Health and Safety
People People, Health and Safety • The Company remains committed to a zero harm work environment • Only 2 lost time incidents in FY 2013 (vs 6 in FY 2012) and no serious incidents • Despite major projects including Unit 5 inspection and Tekapo Canal work • TRIFR* of 2.36 was 68% lower than previous
Slide 17: Financial Overview
Financial Overview “Results were in line with Management’s guidance and the Company continues to show its ability to deliver consistent earnings.” Andrew Donaldson Chief Financial Officer 29 August 2013 17
Slide 18: Profit and Loss
Financial Highlights Profit and Loss Profit and Loss Revenue 2013 $m 2,070 2012 $m (restated) 2,265 (3) Change ($m) -195 Change (%) -9% • Revenues 9% lower due to lower wholesale Total operating expenses (2) (1) -1,734 336 -1,878 387 144 -51 -8% -13% EBITDAF electricity and lower generation not full
Slide 19: EBITDAF Performance
Financial Highlights EBITDAF Performance • Customer Experience EBITDAF impacted by under-recovery of some transmission and lines charges, and lower consumption • Lower Energy Management EBITDAF reflects: • Tekapo power stations outage • Lower North Island hydro generation • Lower wholesale electrici
Slide 20: Balance Sheet
Financial Highlights Balance Sheet 2012 Balance sheet 2013 2011 2010 2009 (restated) • Despite paying a dividend and Total assets 3,751 3,630 3,677 2,532 2,585 Total liabilities 1,802 1,834 1,965 1,087 1,192 increased capex associated with Total debt 1,025 1,019 1,218 552 624 Tekapo Canal remediatio
Slide 21: Debt profile
Financial Highlights Debt profile • Post balance date Capital Bonds were modified: • Amount reduced from $275m to $200m • Coupon reduced from 8.50% to 6.19% • Other debt facilities continue to be re- profiled to take advantage of favourable market conditions, where possible • Average effective inter
Slide 22: Cashflow Statement
Financial Highlights Cashflow Statement • Operating cashflow down 18% due to lower operating earnings plus Cashflow: 12 m onths to June 30 2013 $ m 2012 $ m (restated) Change % unfavourable movement in working Net operating cashflow Net investing cashflow 298 -173 363 -69 -65 -103 -18% 148% capital
Slide 23: Dividends Return
Financial Highlights Dividends Return • Final dividend of $57m declared • Brings total dividend for FY2013 to $114m • First full year of dividends since 2009 • Equates to net cash yield of 5.6% based on commercial valuation of $2,050m Company will pay a dividend that provides shareholders with a con
Slide 24: Outlook
Outlook Outlook • Near term outlook is for lower wholesale electricity prices • Recovered storage levels in South Island lakes • Flat demand • Based on shorter outage for Stage Two of Tekapo Canal remediation, impact on EBITDAF likely to be lower in FY14 • Intention is to pay a dividend consistent w
Slide 25: Concluding Remarks
Conclusion Concluding Remarks • Pleased with progress in 2013 despite challenging climatic and market conditions • Focused on delivering: • Operational improvements • Customer value • Solid results • A safe work place • A well prepared company for a potential IPO 29 August 2013 25
Slide 26: Thank you
genesisenergy.co.nz Thank you 29 August 2013 26