Genesis Energy Limited · NZX:GNE
Genesis Energy — FY2024 Earnings Presentation
41 slides from Genesis Energy's earnings presentation, Aug 22, 2024
Slide 1: FY24 Results Presentation
FY24 Results Presentation Presenters: Malcolm Johns Chief Executive Emma Oettli Interim Chief Financial Officer 22 August 2024 1.
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Genesis Energy Limited (“Genesis Forward-looking statements in this presentation are not guarantees or Energy”) for information purposes only. This disclaimer applies to this predictions of future performance, are based on current expectations and Ge
Slide 3: Agenda
1. Gen35 Horizon 1 – FY24 2. Financial Performance 3. Gen35 Horizon 2 – FY28 4. Guidance 5. Appendix
Slide 4: Performance Highlights
Performance Highlights People Planet Profit Total Customers Lauriston Joint Venture Solar EBITDAF 3 496,596 63 MWp1 $407.2m Up 2.7% on FY23 Construction underway with first generation Down 22% on FY23 expected in Q2 FY25. Core FTE Employees Huntly Battery Net Profit After Tax 1,214 100 MW $131.1m A
Slide 5: Gen35 Horizon 1 Strategy Delivered
Gen35 Horizon 1 Strategy Delivered 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 • First stage of Retail operating model review completed. A reduction of Technology 130 FTE across retail
Slide 6: Growth in Satisfaction and Customer Numbers
Growth in Satisfaction and Customer Numbers Customer Growth 2024 Retail FTE (employees and contractors) • Genesis continued to expand its customer base, hitting 496k customers with growth 1,000 slowing towards the end of the year. An Efficient Core • A new simplified retail operating model was imple
Slide 7: Rankine Resilience
Rankine Resilience Generation by Power Station Rankine generation up 1,898 GWh 2,000 vs. FY23 • The Huntly Power Station proved its resilience in a challenging 1,800 year, impacted by the Unit 5 outages, significant gas shortages 1,600 and lower hydro. 1,400 1,200 • The Rankine units provided critic
Slide 8: Generating Growth
Generating Growth Multiple major projects were undertaken in FY24 to lift production from existing assets, as Genesis responded to plant outages and invested for plant reliability. Huntly Unit 5 Outage • Unit 5 tripped due to the failure of the Generation Circuit Breaker (GCB). A rebuild of the dama
Slide 9: Team motivated to keep delivering Gen35
Team motivated to keep delivering Gen35 Movement in Employees (FTE) • Through FY24 Genesis rebalanced the business to focus on core Gen35 goals. A new retail operating model was introduced, resulting in a reduction of 130 FTE across employees, contractors and vacancies. • Genesis surveyed all staff
Slide 10: Carbon Emissions and Sustainability
Carbon Emissions and Sustainability Carbon emissions • Greenhouse gas emissions significantly increased in FY24, with Initiative FY24 highlights total emissions 59% higher than in FY23. This was driven by the Unit 5 outages, gas market conditions and lower hydro inflows. ENERGY WELLBEING • 300,000 h
Slide 11: Financial Performance
Financial Performance 11.
Slide 12: FY24 Financial Summary
FY24 Financial Summary $ MILLIONS FY24 FY23 Variance % Movements Revenue1 3,063.8 2,387.5 676.3 28% Gross Margin 770.3 853.7 (83.4) (10%) Operating Expenses2 363.1 330.2 32.9 10% EBITDAF 407.2 523.5 (116.3) (22%) NPAT 131.1 195.7 (64.6) (33%) Operating Cash Flow 439.8 422.6 17.2 4% Capit
Slide 13: FY24 Gross Margin
FY24 Gross Margin A decline in Gross Margin driven by lower inflows, plant outage and gas availability Kupe Gross Margin ($m) Electricity Gross Margin ($m) 91 Kupe 100 • Gas production down to 7 800 80 65 PJ (17%) due to planned 60 outages and declining field 700 670 production. 40 • Decrease in FY2
Slide 14: Operating Expenditure
Operating Expenditure FY24 expenditure in line with Gen35 Strategy $ MILLIONS Reviewing Containing Investing • Gen35 strategy initiated a reprioritisation of operating expenditure with changes implemented to focus investment in strategically aligned areas. • Wholesale was prioritised including build
Slide 15: Net Profit After Tax
Net Profit After Tax $ MILLIONS FY24 FY23 Variance % • Depreciation moderately down, due to EBITDAF 407.2 523.5 (116.3) (22%) Jun-23 asset revaluations partially offset by higher Kupe depletion. Depreciation, Depletion and Amortisation (237.0) (254.8) 17.8 7% • Elevated wholesale electricity price h
Slide 16: Capital Investment and Associates
Capital Investment and Associates FY24 Stay-in-business includes: • Investment in stage three of the Tuai generator upgrades • Turbine and generator overhauls at Rangipō $168m ~$210m • Completed four-yearly turnaround outage works at Kupe • Planned Huntly Unit 5 works partially aligned with unexpect
Slide 17: Net Debt and Funding
Net Debt and Funding Fixed Interest Rate Profile 8.0% 81% 90% 74% 75% 80% • Net Debt/EBITDAF increased to 2.7 due to the reduction in EBITDAF. 72% 72% 7.0% 67% 67% 70% • Adjusted Net Debt declined by $60 million in the period to $1,224 million, as 59% inventory and working capital declined. 54% 60%
Slide 18: Gen35 Horizon 2 – FY25-FY28
Gen35 Horizon 2 – FY25-FY28 18.
Slide 19: Gen35: 8 by '28
Gen35: 8 by ‘28 Horizon 2 Objectives to deliver mid-$500m EBITDAF FY28 Goal Status Solar Up to 500MW of solar 63MWp under construction, 127MWp site secured. Over 500MW of developed and operational opportunities under consideration. First solar generation in H1 FY25. Battery Energy Storage 100MW/200M
Slide 20: Portfolio – Energy and Earnings Security
Portfolio – Energy and Earnings Security 12,000 GWh 10,000 GWh Surplus energy capacity Wholesale Length via Coal/Gas/LNG/Biomass Wholesale Channels • Includes all B2B 8,000 GWh Wholesale channels across C&I, ASX, HFO’s and Corporate Energy Supply Partnerships. 6,000 GWh 4,000 GWh Retail Position Ret
Slide 21: Delivering Renewables Growth
Delivering Renewables Growth • The Genesis asset development pipeline continues to grow, with over 1000MW of development opportunities across solar, battery and wind. • Genesis has significantly grown our development team and built a pipeline of opportunities for potential investment. Projects can b
Slide 22: Edgecumbe Solar Farm Development
Edgecumbe Solar Farm Development • Genesis has signed a conditional agreement with Helios for the purchase of a 114 MWac/127 MWp solar farm site at Edgecumbe. The site combines high sunshine hours and an existing connection to a Competitive Advantages Transpower substation and is an advanced stage p
Slide 23: FID Reached on 100MW/200MWh Battery at Huntly
FID Reached on 100MW/200MWh Battery at Huntly • Genesis had made a final investment decision on Stage 1 of the Huntly Battery Arbitrage Energy Storage System (BESS) development programme. Genesis will partner Capturing value of time-shifting electricity from off-peak will Saft for delivery of Stage
Slide 24: Huntly Battery
24. Huntly Battery Artist's impression of two potential batteries at Huntly – not representative of final products.
Slide 25: Growing Value from Gas
Growing Value from Gas Genesis Gas Supply 14 Long term gas • The New Zealand gas market remains exceptionally tight, with prices secured at fixed 12 at record high levels. Genesis has recently secured additional gas prices from Methanex. 10 8 • Genesis is actively participating in the gas security r
Slide 26: Fuel Flexibility through Biomass
Fuel Flexibility through Biomass ~10,500 Ha of land to produce forestry - Genesis is actively working with the forestry industry to develop a black pellet supply chain residuals for the Huntly Power Station. We estimate approximately 10,500 Ha is required to produce 600 GWh of electricity. - We rema
Slide 27: Technology Drives Value from Transformation
Technology Drives Value from Transformation Key projects Objective Status • Delivering a future fit Retail • Genesis is transforming its digital • First release (Frank) progressing towards the end platform through modernisation, architecture towards a more focused of build and into system test phase
Slide 28: Guidance
Guidance 28.
Slide 29: Outlook and Guidance
Outlook and Guidance — Guidance for FY25 EBITDAF is reconfirmed at around $460 million • Genesis Energy advises that FY25 EBITDAF is expected to around $460 million. Genesis highlights current volatility across electricity and gas markets and notes that this could result in a wider range of earnings
Slide 30: Appendix
Appendix 30.
Slide 31: Gen35 Horizon 2 - FY28 Scorecard
Gen35 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 Equity Number 1 brand equity in energy market Technology
Slide 32: Electricity and Gas Gross Margin Breakdown
Electricity and Gas Gross Margin Breakdown FY24 FY23 Variance Electricity Gross Margin Volume Rate per unit $m Volume Rate per unit $m Volume Rate per unit $m Retail Sales C&I 1,816 GWh $196 /MWh 355.7 1,792 GWh $169 /MWh 303.2 24 GWh $27 /MWh 52.5 Retail Sales Residential 3,095 GWh $285 /MWh 881.1
Slide 33: LPG and Other Gross Margin Breakdown
LPG and Other Gross Margin Breakdown FY24 FY23 Variance LPG Gross Margin Volume Rate per unit $m Volume Rate per unit $m Volume Rate per unit $m Retail Sales 43,339T $2,423/T 105.0 43,874T $2,206/T 96.8 -535T $217 /T 8.2 Wholesale Sales 6,246T $1,012/T 6.3 7,262T $1,068/T 7.8 -1,016T ($57) /T (1.5)
Slide 34: Kupe Gross Margin and Reconciliation to EBITDAF
Kupe Gross Margin and Reconciliation to EBITDAF FY24 FY23 Variance Kupe Gross Margin Volume Rate per unit Volume Rate per unit $m Volume Rate per unit Oil Sales 109 Kbbl $94 /bbl 10.2 254 Kbbl $101 /bbl 25.6 -145 Kbbl ($7.0) /bbl (15.4) Gas Sales 7.0 PJ $8.1 /GJ 56.5 8.4 PJ $7.6 /GJ 63.9 -1.4 PJ $0.
Slide 35: Carbon Position and Derivatives Settlements
Carbon Position and Derivatives Settlements Electricity Derivates Settlements $60m $41m $20m 100% $40m 90% 80% $20m 70% 60% 50% $0m 40% 30% 20% ($20m) 10% 0% FY25 FY26 FY27 FY28 FY29 FY30 ($40m) Hedged Unhedged ($60m) As of 7 August 2024. Excludes carbon units held for active trading. FY23 FY24 Acti
Slide 36: Financial Statements
Financial Statements FY24 FY23 Balance Sheet Variance FY24 FY23 ($m) ($m) Income Statement Variance ($m) ($m) Cash and Cash Equivalents 192.8 60.1 Revenue 3,047.8 2,374.2 28.37% Other Current Assets 653.0 534.3 Expenses (2,653.3) (1,860.2) 42.64% Non-Current Assets 4,791.5 4,495.6 Depreciation, Depl
Slide 37: Debt Information
Debt Information Genesis Debt Portfolio FY24 FY23 At 30 June 2024 Debt Information Variance $400 ($m) ($m) Total Debt $ 1,451 1,367 $350 Cash and Cash Equivalents $ 193 60 $300 Headline Net Debt $ 1,258 1,307 (3.7%) $250 $m $200 USPP FX and FV Adjustments $ 34 23 $150 Adjusted Net Debt1 $ 1,224 1,28
Slide 38: Operational Metrics
Operational Metrics Retail Key Information FY24 FY23 Variance Retail Netback by Segment & Fuel FY24 FY23 Variance Customers with > 1 Fuel 150,557 142,987 5.29% Residential - Electricity ($/MWh) $145.03 $134.62 7.73% Electricity Only Customers 305,347 294,541 3.67% Residential - Gas ($/GJ) $18.26 $17
Slide 39: 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 40: 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 41: Investor Relations Enquiries
Investor Relations Enquiries Tim McSweeney GM Investor Relations & Market Risk 41. +64 27 200 5548