Genesis Energy Limited · NZX:GNE
Genesis Energy — H1 FY24 Earnings Presentation
36 slides from Genesis Energy's earnings presentation, Feb 22, 2024
Slide 1: H1 FY24 Results Presentation
H1 FY24 Results Presentation Presenters: Malcolm Johns Chief Executive James Spence Chief Financial Officer 22 February 2024
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Genesis Energy Limited (“Genesis Forward-looking statements in this presentation are not guarantees or conjunction with Genesis Energy’s periodic and continuous disclosure Energy”) for information purposes only. This disclaimer applies to this predic
Slide 3: Agenda
1. Performance highlights 2. Financial performance 3. Operational performance 4. Strategic outlook 5. Guidance and Kupe 6. Appendix H1 FY24 Investor Presentation 3.
Slide 4: Performance Highlights
Performance Highlights People Planet Profit Growth in customers Lauriston Solar Farm EBITDAF 1 9,494 63 MW $202.1m Increase of 2.0% in the period Financial close achieved on New Decrease of 32% on H1 FY23 Zealand’s first project financed solar farm Customers on EV plans Reconsent Application Lodged
Slide 5: Financial Performance
Financial Performance
Slide 6: H1 FY24 Financial Summary
H1 FY24 Financial Summary $ MILLIONS H1 FY24 H1 FY23 Variance % Movements Revenue1 1,366.5 1,151.3 215.2 19% Gross Margin 383.6 454.9 (71.3) (16%) Operating Expenses2 181.5 156.6 24.9 16% EBITDAF 202.1 298.3 (96.2) (32%) NPAT 38.3 145.3 (107.0) (74%) Operating Cash Flow 210.8 224.5 (13.7)
Slide 7: H1 FY24 Gross Margin
H1 FY24 Gross Margin $71m lower gross margin vs pcp primarily due to rainfall and the Huntly Unit 5 outage. Kupe Gross Margin ($m) Electricity Gross Margin ($m) • Development of KS-9 50 40 and a scheduled outage 400 40 358 29 meant lower production Margin ($m) 30 at Kupe. 350 20 • Gas production was
Slide 8: Operating Expenditure
Operating Expenditure • Operating Expenditure progressed in line with H1 FY24 expenditure in line with Gen 35 Strategy strategy, focusing on digital projects and building renewable development capability. $ MILLIONS • Inflation continued to impact wage costs, software and insurance. FY24 Guidance Re
Slide 9: Net Profit After Tax
Net Profit After Tax $ MILLIONS H1 FY24 H1 FY23 Variance % • Depreciation moderately down, due EBITDAF 202.1 298.3 (96.2) (32%) to Jun-23 asset revaluations and lower Kupe depletion. Depreciation, Depletion and Amortisation (106.9) (119.9) 13.0 11% • More stable long term pricing expectations meant
Slide 10: Capital Investment and Associates
Capital Investment and Associates $ MILLIONS 173 H1 FY24 Capex and Investments Stay In Business capital expenditure includes: 92 • Investment in stage three of the Tuai generator upgrades • Turbine and generator overhauls underway at Rangipō 50 • Completed four-yearly turnaround outage works at Kupe
Slide 11: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet Fixed Interest Rate Profile • Net Debt/EBITDAF increased to 2.6 as earnings returned to more normal levels, following favourable market conditions in FY23. 8.0% 81% 75% 90% 74% 72% 72% • Adjusted Net Debt declined by $19 million in the period to $1,265 million, 7.0% 66% 6
Slide 12: Operational Performance
Operational Performance
Slide 13: Strong Customer Growth and Satisfaction
Strong Customer Growth and Satisfaction Growth in Customers across Genesis and Frank • Genesis continued to grow customers across both brands, with an 390,000 106,000 increase of 9,494 customers in the period. Residential electricity sales volumes were up 4.2%. 388,000 102,000 Genesis Customers • Fr
Slide 14: Resilient Portfolio through Adverse Events
Resilient Portfolio through Adverse Events Rankines filling the gap 2,500 • Market and operating conditions were more challenging during the period, with a return to more normal hydrology and the outage at Huntly Unit 5. 2,000 • The Huntly Rankine units provided essential back-up to the system, with
Slide 15: Huntly Unit 5
Huntly Unit 5 • Genesis returned Huntly Unit 5 to service in January 2024, following a forced outage in June 2023. This was a priority to Genesis and our suppliers, which achieved a return four months earlier than originally anticipated. • The outage was caused by a failure in one of three phases in
Slide 16: Carbon Emissions and Health & Safety
Carbon Emissions Health & Safety • Market conditions and the Unit 5 outage meant that H1 FY24 • Injury severity continued to decline, due to early intervention and a carbon emissions were higher, as Rankine units were required to focused rehabilitation programme. provide back-up generation. • Preven
Slide 17: Strategic Outlook
Strategic Outlook 17.
Slide 18: The Role of Huntly in the Market
The Role of Huntly in the Market • Every electricity supplier and customer on the grid in New Zealand benefit from thermal generation at some point for Historic Use of Huntly Rankine Units security of supply. 100% 90% • Huntly continues to serve the system beyond 80% Genesis’ needs. While Huntly run
Slide 19: Genesis' capabilities and assets give it a unique role to play
Genesis’ capabilities and assets give it a unique role to play E L EC T R I F I C AT I O N FLEXIBILITY R E N E WA B L E S OUR STRENGTHS Retail business Flexible assets Renewables growth 490k customers Diversity of generation, Solar JV progressing options and (150k dual fuel customers) fuels and m
Slide 20: Planning for three horizons of transition
Planning for three horizons of transition To succeed long-term, near-term focus is on getting future-fit Horizon 1 Horizon 2 Horizon 3 FY24 FY25-28 FY29-35 ‘Getting Future Fit’, focused ‘Accelerated Transitions’, ‘The Future State’, on sweeping our own front focused on Customer, moving past the tr
Slide 21: Future Fit changes Currently Underway
Future Fit changes Currently Underway To succeed long-term, near-term focus is on getting future-fit Horizon 1 ‘Getting Future Fit’, focused on sweeping our own front FY24 yard at a group and business unit level. Retail & Retail and Technology Operating Review • Implementation of the operating model
Slide 22: Horizon 2 - FY28 Scorecard
Horizon 2 - FY28 Scorecard Goal Target FY28 Goal Status Grow Profitability EBITDAF Group EBITDAF mid $500 millions Debt/EBITDAF Ratio less than or equal to 2.5 Operating Expenditure Operating Expenditure ~ $361 million. Retail and Brand preference Number 1 brand equity in energy market Technology To
Slide 23: Genesis is changing as an investment
Genesis is changing as an investment From… To… Limited growth outlook Growth opportunities and high dividend pay out with reliable dividend returns Huntly reliant on fossil fuels, Transition to biomass and battery, used for dry period firming used for firming solar, wind, and hydro 40% renewable gen
Slide 24: Guidance & Kupe
Guidance & Kupe
Slide 25: Kupe
Kupe • KS-9 was drilled to a total depth of 3,630 metres and a gas column was verified within the eastern fault block of the field. First gas was delivered in January. • The well was drilled on schedule and within budget. • The operator is continuing well commissioning activities which include well
Slide 26: Outlook and guidance
Outlook and guidance — Guidance for FY24 EBITDAF is around $430 million • FY24 EBITDAF is expected to be around $430 million subject to hydrological conditions, gas availability, and any material adverse events or unforeseeable circumstances. • As previously announced, Huntly Unit 5 has returned to
Slide 27: Appendix
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Slide 28: Electricity and Gas Gross Margin Breakdown
Electricity and Gas Gross Margin Breakdown H1 FY24 H1 FY23 Variance Electricity Gross Margin Volume Rate per unit $m Volume Rate per unit $m Volume Rate per unit $m Retail Sales C&I 905 GWh $190/MWh 171.7 888 GWh $156/MWh 138.6 17 GWh $34/MWh 33.1 Retail Sales Residential 1,628 GWh $281/MWh1 457.51
Slide 29: LPG and Other Gross Margin Breakdown
LPG and Other Gross Margin Breakdown LPG Gross Margin Volume Rate per unit $m Volume Rate per unit $m Volume Rate per unit $m Retail Sales 23.4 kt $2,343/t 54.9 24.6 kt $2,103/t 51.8 (1.2) kt $238/t 3.1 Wholesale Sales 1.6 kt $978/t 1.5 2.7 kt $1,117/t 3.0 (1.1) kt $(139)/t (1.4) Emission Unit Reven
Slide 30: Kupe Gross Margin and Reconciliation to EBITDAF
Kupe Gross Margin and Reconciliation to EBITDAF Kupe Gross Margin Volume Rate per unit $m Volume Rate per unit $m Volume Rate per unit $m Oil Sales 69 Kbbl $88.8/bbl 6.1 94 Kbbl $122.9/bbl 11.5 (25)Kbbl $(34.1)/bbl (5.4) Gas Sales 3.0 PJ $7.8/GJ 23.3 4.3 PJ $7.2/GJ 31.3 (1.3) PJ $0.5/GJ (8.0) LPG Sa
Slide 31: Financial Statements
Financial Statements H1 FY24 H1 FY23 H1 FY24 FY23 Balance Sheet Variance Income Statement Variance ($m) ($m) ($m) ($m) Cash and Cash Equivalents 69.5 60.1 Revenue 1,366.5 1,151.3 18.7% Other Current Assets 523.2 534.3 Expenses (1,180.8) (859.3) 37.4% Non-Current Assets 4,573.2 4,495.6 Depreciation,
Slide 32: Debt Information
Debt Information GENESIS DEBT PROFILE AT 31 December 2023 H1 FY24 FY23 Debt Information Variance ($m) ($m) Total Debt $ 1,369 1,367 Cash and Cash Equivalents $ 69 60 Headline Net Debt $ 1,300 1,307 (0.6%) USPP FX and FV Adjustments $ 35 22 Adjusted Net Debt1 $ 1,265 1,284 (1.6%) Headline Gearing2 35
Slide 33: Operational Metrics
Operational Metrics Retail Key Information H1 FY24 H1 FY23 Variance Retail Netback by Segment & Fuel H1 FY24 H1 FY23 Variance Customers with > 1 Fuel 148,915 140,587 5.9% Residential - Electricity ($/MWh) $146.97 $133.26 10.3% Electricity Only Customers 300,834 293,040 2.7% Residential - Gas ($/GJ)
Slide 34: Glossary – Gross Margin Breakdown
Glossary – Gross Margin Breakdown ELECTRICITY Retail Sales C&I Sale of electricity to commercial and industrial customers. Retail Sales Residential Sale of electricity to residential customers. Retail Sales SME Sale of electricity to small business customers. Wholesale Sales Sale of generated electr
Slide 35: Glossary – Operational Metrics
Glossary – Operational Metrics RETAIL Customers Electricity and gas customers are defined by single customer view, regardless of number of connections (ICP’s). ICP Installation Connection Point, a connection point that is both occupied and has not been disconnected (Active-Occupied). Resi, SME, C&I
Slide 36: Investor Relations Enquiries
Investor Relations Enquiries Tim McSweeney GM Investor Relations & Market Risk +64 27 200 5548