Contact Energy Limited · NZX:CEN
Contact Energy — Shareholder Meeting (March 2002)
16 slides from Contact Energy's shareholder meeting presentation, Mar 11, 2002
Slide 1: 2002 Annual Meeting
2002 Annual Meeting Stephen Barrett Chief Executive and Managing Director 11 March 2002
Slide 2: Contact Overview of Operations
Contact Overview of Operations Electricity retail • 24% of market • Economies of scale in cost-to-serve • Natural hedge for generation Electricity generation • 28% capacity share Gas business • 24% production share • 75% of generation fuel market • Natural fuel and location hedges • 50% of retail ma
Slide 3: Overview of 2001 financial year
Overview of 2001 financial year • Result significantly affected by Contact’s generation position and the prevailing market conditions • Net surplus of $131 million; core net surplus of $126 million • EBITDA of $356 million • Record gas use of 101PJs • Joint investment with EME in Victoria, Australia
Slide 4: Net Surplus
Net Surplus 180 155.4 160 140 131 120 67.2 5 100 97 $m 80 36 60 126 102 40 77.4 80.3 88.2 61 20 0 1997 1998 1999 2000 2001 2002F Financial Year Core earnings Non-core earnings 4
Slide 5: Contributions to Gross Margin
Contributions to Gross Margin (adjusted for internal transfers) 400 350 300 250 $million 200 150 100 50 0 Wholesale Retail Wholesale Retail gas Electricity electricity gas 5
Slide 6: Generation operations and development
Generation operations and development • Otahuhu B and New Plymouth both performed well over the winter • Resource consents have been granted for Otahuhu C – availability of gas is key issue – final decision dependent on meeting investment criteria • Hearings for renewals of Clutha and Wairakei conse
Slide 7: Wholesale Electricity Prices
$/MWhr 100 150 200 250 300 350 50 0 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Price Jul-00 Aug-00 Sep-00 Oct-00 Nov-00 Dec-00 Mean Storage Jan-01 Feb-01 Mar-01 Apr-01 Storage May-01 Jun-01 Jul-01 Aug-01 Sep-01 Inflows Oct-01 Nov-01 Wholesale Electricity Prices Daily Average Hayw
Slide 8: Gas Review
Gas Review • 2001 was a record year for Contact’s gas business • Record sales/use of 101.6PJs • Significant above expected use in generation • Retail gas customer numbers are now approximately 106,000 • During 2001 financial year Contact used all of its remaining prepaid gas (31.1PJs) from Maui enti
Slide 9: Gas portfolio
Gas portfolio 110 100 90 80 Maui - Prepaid Gas 70 Maui 60 NGC PJ 50 TAW 40 Wholesale Sales 30 Contact Generation Contact Retail 20 10 0 1996 2000 2004 2008 2012 9
Slide 10: Industry Gas Supply/Demand Balance
Industry Gas Supply/Demand Balance 300 250 Methanol 200 Ammonia/Urea Generation & Cogen Industrial PJ 150 Transport Commercial Residential Supply 100 50 0 2000 2005 2010 2015 10
Slide 11: Retail business review
Retail business review • Contact’s integrated business protected retail customers from last winter’s higher wholesale market prices – successful community savings campaign • Prices need to rise over time to ensure investments in new generation can be made • Pleasing improvement in customer service –
Slide 12: International activities
International activities • During the financial year Contact undertook a review of the Australian strategy – confirmed that Australia remains a focus for potential growth – emphasis will be in markets where Contact can best utilise its core skills and experience – also concluded that any major inves
Slide 13: Regulatory issues
Regulatory issues • This winter tested the integrity of the wholesale market • Contact’s view is that it functioned as it was designed to by – signalling supply constraints – prompting full availability of reserve generation – prompting demand savings • Conclusions confirmed by the Minister’s Winter
Slide 14: 2002 Performance to date
2002 Performance to date • Overall net surplus is close to budgeted levels and above this time last year – strong retail performance has offset weak electricity spot revenue in year to date – gas volumes and revenue broadly in line with budget • At this stage we expect to meet the forecast net surpl
Slide 15: Strategy going forward - integrated energy business
Strategy going forward - integrated energy business Third-Party Retailers Hedges & GenCo’s Fuel Suppliers Fuel Trading Generation Elect Trading Retail Customers “Retail Hedge” 15
Slide 16: Conclusion
Conclusion • 2001 performance was very pleasing in very challenging circumstances • Contact’s result was a reflection of – the company’s strategic position and its integrated set of assets – the focus on risk management and internal policies and procedures – the work undertaken to maximise availabil