mel reports wed so we may be able to decipher who benefited or if both benefited
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if meridian was good im thinking gne will be good if not better also the relative under performance compared to mel may offer chance to close gap as well as the div being better
Just checked in on the generation mix on the Transpower website, I see coal (ie Huntly) has been doing some heavy lifting now for weeks.
https://www.transpower.co.nz/power-system-live-data
Love Bill Gates' comments on solar and wind energy.
https://www.youtube.com/watch?v=9xe3BWPsBTU
The next youtube following on from Bill Gates is also worth listening to.
https://www.youtube.com/watch?v=TCy_UOjEir0
Cool, I'll check it out. I did enjoy this one:
https://www.youtube.com/watch?v=oYhCQv5tNsQ&t=2675s
good result and a ebitdaf upgrade for the full yr
Yes....pretty solid and as you say EBITDAF was projected at $350-$370m for FY19, (see page 3 of November 18 investor presentation) http://nzx-prod-s7fsd7f98s.s3-websit...112/290863.pdf and that forecast has now been been upgraded to $360m - $375m.
Dividend is up 1.8%, a continuation of their policy of increasing dividends each year to ensure they at least stay the same in real inflation adjusted terms.
Results Presentation here http://nzx-prod-s7fsd7f98s.s3-websit...140/295775.pdf
Disc: Happy holder for yield.
Good stuff and with interest rates possibly heading down, this will look even better in a few months.
Yes it is safe yield too as people buy power in good times and bad. I am betting that GNE's oil and gas reserves have a life a lot longer than what is currently officially on the record and that they can maintain this dividend level, (increased to account for inflation each year) for at least the next 15 years. I'm also betting that the generation market will remain very tight for the foreseeable future and GNE will get a lot of value out of their remaining rankine units.
looks like breaking out on the hrlies to the upside
holding the breakout and the gap between gne and mcy and mel is getting wider , must be a big catchup coming surely
reading greens might want to change there policy around 100% renewable by 2050 , does this mean huntly will stay open now?
got your answer , yesterday they say it may close in 5yrs MAY may MAY. MAY BEING THE KEY WORD MEANING THEY WILL KEEEP there options open. with demand rising and no new generation on the horizon except some wind i believe may will be alot longer than 5yrs .
http://www.sharechat.co.nz/article/6...ive-years.html
I was involved, with the commissioning of the last Rankine unit in 1985. These units were designed with an economic life of 25 - 30 years, which should have meant they would be retired between 2010 and 2015. Sure enough Genesis decommissioned 1 unit and mothballed another before that date in order to extend the life of the other 2 units. I can see how they may be kept going out to 2022, but beyond that will be a real task.
Refurbishing the generators and turbines is neither difficult, not too expensive: It is the boilers and condensers that will cause the real issues. Boiler tube leaks are always hard to find and fix, but as the boilers get older this task becomes even more problematic. Replacing the boiler is not an option, as it is an integral part of the building.
However, the Rankine units have proved to be the most versatile thermal machines ever installed in New Zealand, and in many respects are even better than the more modern CCGT plant. I really hope that Genesis can find a way to keep these units running economically.
Nice post Jantar
Genesis has entered into a carbon sequestration deal where they will join other outfits to plant trees to offset their carbon emissions.
https://www.genesisenergy.co.nz/abou...esis-energy-an
I hope they are only paying for gas equivalent emissions when burning coal at Huntly and asking the virtue signalling, impetuous, exploration banning Coalition Government to make up the difference.
Boop boop de do
Marilyn
Chris Lee gave GNE a good write-up yesterday https://www.chrislee.co.nz/taking-stock
He overlooked mentioning its dual listed and gets added to the ASX with effect from the matching process this afternoon.
I think the company is well positioned with a well diversified generation portfolio, and should do very well with its assets in a tight supply market going forward.
It offers the highest yield of the gentailiers by quite some margin.
I added some more yesterday for yield. Happy with the half year result and report received yesterday and the new board appointment yesterday looks to have good credentials.
Gross yield a smidge under 8% at this price level and trades cum a 8.45 cps divvy next month.
added to the all ords i believe so instos will be having to buy it up if they havent already
http://www.sharechat.co.nz/article/0...ale-priceshtml
Market remains very tight and this confirms my sentiment expressed above.
MEL look to be doing okay with their hydro storage.
Lake Taupo very low will be hurting MCY.
Very pleased I locked in a very sharp 3 year fixed price deal for my consumption with MEL last month. Not expecting very sharp deals from the retailers in the foreseeable future. In fact could retail prices be about to take a leap considering the sustained increase in wholesale price level's for many months now ?
I dare say retail will have to take a leap or the gentailers will be leaching $. From the 22 cents or whatever it is you pay for your KWh only about 10 is for the price of power. The spot price has been consistently above 10 cents (closer to 13-15) the last few months so that may put some under pressure.
These high prices now expected till March 20 quarter..
https://www.asx.com.au/asx/markets/f...EA&type=FUTURE
15.4 cents per kw hr inclusive of GST locked down for 3 years was a deal I simply couldn't refuse, so good I understand its no longer in the market.
Daily fixed rate by the lines company is on top of that, about $1.75 per day inclusive of GST. Then there's the electricity authority levy which I think is about 0.15 cents per kw/hr and that's it. No discounts or anything like that, just the 15.4 cents per kw hr incl of GST and the above. Very sharp price and locked in for 3 years so happy days until the end of February 2022 ! MEL had a very special deal for Aucklanders. Don't ask me how they expect to make money out of it what with transmission costs of about 8-9 cents per kw/hr from memory.
Yes the transmission costs are close to 10 cents, so to think that they are giving you power at 5.4 whilst the spot price is 13-15. That is why I think you have the deal of the century. 15.4 incl GST is crazy. (Yes I am a bit jealous thinking I have a good deal at 22 cents)!
Yeap its a blinder of a deal but no discounts for prompt payment. I presume you and Blackcap get prompt payment discounts off your 22 cents per kw / hr ?
I think the $1.75 a day thing here is because of all the trees around Titirangi that keep falling on the power lines. Vector too mean to underground the supply.
Anyway back to GNE. I find it more than a little interesting how tight the supply situation is getting in N.Z. Crazy that the wholesale spot rate has been in the $200-300 mw/hr for many, many months now. I suspect GNE with its well diversified generation capability will do extremely well for the foreseeable future. $3 looks likely sometime soon I reckon and I note it still trades cum an 8.45 cps interim divvy that from memory is about 80% imputed. ex date is 2 April I think.
I was reflecting on the reporting season today and there were not a great SUM total of companies that stood out as being good.
Apart from SUM, several of the gentailers were standouts and not much else....there were quite a number of disappointments, the most serious of which was SML yesterday which was miles under my expectations.
One of the features of the current operating environment I have noticed almost right across the board with almost all companies is the pressure on profits through increases in human resources costs and this is something to watch very closely as we go into the next financial year with the big jump in the minimum wage on 1 April.
I continue to like the safe, good and very defensive yield characteristics of GNE, MEL and CEN, in that order. Those that can control their costs best, will do the best in this sector. I think we will have ultra low interest rates for many many years. Safe yield really floats my boat.
low interest rates in nz for many more yrs 8.4% gross yield suits me fine. oil price rise should boost there result this half even more i reckon
rocking 3 dollars surely soon gap between cen and mel is the biggest ever i reckon. surely must play catchup soon
Yes I agree 100%. Ultra low interest rates for as far as possibly foreseeable is my prognosis and in that environment I would expect the gentailiers to continue to rerate, GNE the most with its superior yield and still trading cum an 8.45 cps divvy.
Below is Beagle's question from the Meridian thread.
Beagle, a steam boiler is a pressure vessel and its life is generally proportional to the number of cycles it has been through (i.e the number of times it is started from cold and brought up to operating pressure,) Under the New Zealand Boiler Code, steam boilers must be serviced every quarter and undergo an annual survey to ensure safe operation.
During an inspection some things can be replaced: like safety valves and sight glasses. You can bring a boiler up to pressure and check if there is a subsequent loss of pressure, indicating a leak. You can certainly inspect the tube plating for cracks. But 'fixing' boiler plating in situ can introduce new stresses into the system. A new boiler, while it is being constructed can be heat treated to get rid of such stresses at the end of the detail manufacturing stage But this could involve heating up the whole structure in an environmentally controlled way. That would not be possible once the boiler was installed at the operating site, complete with bolt on additions that might be damaged with such heat treating repair work.
A boiler that is good for 25-30 years will not suddenly fall apart on the 30th anniversary of its commissioning. It really depends on its operational history from commissioning up until that point. I presume Jantar's comment about mothballing two boilers to extend the life of the other units is something to do with having less boiler shutdown cycles. This has been made possible because Huntly does not need to run all of those Rankine units at the same time any more. By doing this, Genesis has been able to extend the design life of these boilers beyond the 2010 to 2015 originally envisaged. Exactly how many of these boiler cycles have been 'saved' by careful operational management is unknown. Genesis will probably know, but they won't be keen for their competitors to know with any great precision the expected life those boilers that remain operational. Only Genesis themselves will know what sort of patch up repair bills they will face if they extend the boiler's operations to 2022. Jantar could be wrong with his expected boiler life assessment, because he probably does not know the actual boiler use pattern in recent years. But given he is probably one of the most qualified people you will find who is willing to speak of it, I wouldn't bet against his assessment.
SNOOPY
hi jantar , is the lifespan dependant on the amount of use. ie full on use less than 5yrs little use longer than 5yrs ?
i see in the article it states
probably stop running during summer and other periods of low power prices within that timeframe, wholesale general manager Shaun Goldsbury says
Fair enough Snoopy but this "I really hope that Genesis can find a way to keep these units running economically" is easier to do when one is looking at them running when marginal generation is needed at $200 - $300 mw/hr is it not ? This summer is a classic case in point. It simply hasn't rained and when it has, its rained where its least helpful.
GNE also have the new 100 Mw wind farm coming on stream in due course. Where there is a will there is often a way to keep old machinery going and as mentioned before I think we're headed into the next decade of very tight supply constraint in N.Z.
GNE to get maximum bang for buck from their Kupe field and Rankine units over the foreseeable future, that's how I see it.
$3 ++++ beckons the biggest yield play left on the nzx
investor roadshow in australia
Genesis Energy will be meetings with investors this week in Melbourne, Sydney and Brisbane.
https://www.nzx.com/announcements/332460
bound to drum up more shareholders to invest
some interesting things in the presentation
only paying out 78% of free cashflow on divs with a stated top of 90% of free cashflow. leaves plenty of room for rising divs.
gas contracts fall of from 2021 so will get a boost to bottom line
I've had the time to have a good look through that now and agree 100% that its looks solid and attractive. I think its quite likely we've seen the end of the share price starting with a 2.
As you quite rightly point out the roll off of those legacy gas contracts will confer enduring and quite substantial benefits to GNE going forward. Its been very very dry so I expect this years EBITDAF to be right at the top end of guidance.
dont forget the RBNZ interest rate announcement tomorrow , a dovish tone is expected esp with everything starting to turn down. nz is not imune to down turns in china and aus. aus credit swaps went negative yesterday a huge red warning of slowdown. so rba cut will pile the pressure on rbnz to stop the aus/ nzd going over 1 for 1.
all in all low rates are going lower just how quick is the question not if
Agreed. I am certain we are headed down to ultra low interest rates for probably the next decade.
Assuming a ~ 2 % increase in the final divvy for FY19 to 8.8 cps, total divvies for the year will be 8.45 + 8.8 = 17.25 cps. They are 80% imputed so this translates to 17.25 / 0.7822 = 22.053 cps gross. At $3.00 that's a gross yield of 7.35% which I think its highly attractive for a gentailier in an ultra low interest rate environment.
They still trade cum the 8.45 cps divvy so I think buying up to an including that inclusive dividend to $3.085 is compelling buying cum dividend.
They go ex divvy next week.
totally agree wicked div and too think other gentailers yield under 4% and as you say gne at 7.35% even with price over 3 dollars. i still think at some stage gne will play catchup as people switch to gne from others because of the superior yield. so could argue its very attractive even at much higher prices based on this.
Yes in the medium term I expect this to rerate to $3.40 which would still give a 6.5% gross return.
The Reserve Bank has kept its official cash rate (OCR) on hold at 1.75 per cent, as expected, but said the next move is likely to be down.
div on this looks even more yummy now
Traders now see a rate reduction by November as almost certain, according to swaps data, up from 48 percent earlier Wednesday
https://www.bloomberg.com/news/artic...d=premium-asia
Locked and loaded with heaps :)
Sure does, this ultra low interest rate environment will prove very supportive for all dependable yield stocks including this and MEL, CEN ARG GMT and others.
Also I think people will go hunting for higher yield with yield stocks like AIR HLG, HGH, ZEL and maybe even TRA. I am well positioned :D
nz bonds are plummeting down to 1.75% 10yrs now gne >7% looks amazing
In an ironical twist of fate the stocks I picked as star performers in the comp are languishing while the safe bets are looking pretty good and keeping me from falling completely off the bottom of the list. More power to GNE I say.
I get the rational however that has been the story for sometime now, why would this moment in time result in a trigger to a new level rather than say mid last year...that is placing aside NZRB announcement this afternoon...which has been wishy washy for a while now...
Lower growth concerns worldwide and have seen long bonds plumbing new lows in many countries including N.Z. in recent weeks making safe yield (yield that's highly resistant to a possible recession) even more attractive and I think this rally that's clearly evident for some time (if one looks the any of the gentailiers charts) has plenty of room to run. I see ultra low interest rates for as far as is possibly foreseeable whereas say Sept 2018 the environment was quite different and 10 year rates in the US for example were threatening to break right out towards 3.5% and possibly beyond.
beagle did you get your 3.40 value from simply wall st? they have gne intrinsic value based on future cashflows at $3.44 which is a 9% discount too current price. mine value is slightly higher as i see cashflows sig higher running on from 2021 so my discount is larger.
No bull I don't use those guys. In effect I used a simply dividend yield model as these shares trade on yield and I think 6.5% gross yield is a fair near term yield target which based on the projected payout for FY19 gives $3.40. We could see it rerate further later in the year but I think $3.40 is a fair price target for 4-6 months time, (keeping in mind they payout 2 dividends over the next 6 months or so). It could get their sooner and I certainly wouldn't be unhappy with that as I'm fully locked and loaded :)
based on the yield factor i get mcy at 3.84 , mel at 4.77 , cen at 4.81, vct at 4.56 and gne at 5.46 these are not gross divs figures.
positives
future cashflow discount 9% to stock price rated 3.44 , i get higher more like 3.80 based on 2021 figures
div yield relative to peers implies stock price getting too around 3.60 to match peers yield
historical discount to peers since listing is highest ever so implies a narrowing meaning out performance to peers to narrow spread too historical norms
Good stuff.
Yes EBITDAF growth to ~ $430m in FY21 gives excellent upside to my near term price expectations of $3.40. Should see $4+ sometime next year in anticipation of such a strong result. Heaps of room for this one to run north. Good we're having a good chat about this one. This is our best bit of back and forth banter on ST to date I think.
Beagle - Posted 27 February 2019 MCY thread
Interesting to see how these have run over the last month. I identified GNE as the best followed by MEL. Should have run a comprehensive analysis on all the Gentialiers at the time but the lower yields of the others, (except for CEN, hold and recently added) didn't interest me at the time.Quote:
I have crunched all the numbers on current share price and taking into account the degree of imputation credits below :-
MCY $3.60 Final divvy FY18 and Interim divvy FY19 total 15.3 cps 100% imputed = 21.25 cps gross = gross yield 5.9%
MEL $3.71 Final divvy FY18 incl special and Interim divvy FY19 incl special, ordinary divvies 86% imputed, special's not, gross divvy total 24.1 6 cps = gross yield 6.5%
GNE $ 2.79 Final divvy FY18 and interim divvy FY19 total 17.05 cps 80% imputed = gross 21.97 cps = gross yield of 7.9%
I still see GNE as having by far the most room to run north and my bias towards this one is reflected in my portfolio allocation.
Move over the "couta theorem" for Retirement Operator pricing, we now have the "Beagle-bull....-BUY" theorem which states:
"If Beagle and bull.... agree on any one share - BUY like there's no tomorrow!"
I'm still trying to get over my shock at something unheard of happening (no, not Beagle and bull.... agreeing) - I dipped my toes in yesterday and the SP has gone UP! This never happens!
yep big volumes crossing , probably the roadshow investors buying
570000 shares brought 1 trade at $3.20 , its not a retail trade lol
looks like gentailers are being hoovered up , last chance to get income probably why
With the new rules on bank liquidity margins are going to be squeezed so those poor people with cash will be looking for safe returns elsewhere. It is a pretty safe bet that the demand for power is not going down any time soon as the baby boomers all invest in electric bikes, cars, and electronic filled appartments.
Yeap, I noticed the new generation 2017 / 2018 longer range 40 kw/hr Nissan Leaf's are coming down into the very low $40K's and other opportunities like 2017 Hyundai Inioq demo's for similar money.
With no petrol ever and no RUC for years these look like viable options for those looking to make a green statement. $3.40 for GNE ex divvy still gives 6.5% and GNE have a good track record of increasing the dividend every year !
Occam's razor : One should not multiply entities beyond necessity.
The governor of the reserve bank indicated that the cash rate will probably be lowered.
Rock star Economy? I think not.
Absolutely no return on term deposits.
I get about 17.25 cps for FY19. Looking ahead I expect about 17.6 cps in dividends for FY20 and at 80% imputation rate this is 17.6 / 1 - (0.28 x 80%) = 17.6 / 0.776 = 22.68 cps gross. On a theoretical ex dividend price next week $3.22 - 0.0845 = $3.1355....22.68/313.55 = 7.23% Gross yield for FY20 + future growth
I remain of the opinion that despite the recent strong run, GNE has considerable upside as this sort of yield from a safe gentailier (in this ultra low interest rate environment) is simply outstanding.
Shane Solly, a fund manager at Harbour Asset Management, predicted term deposit rates would fall with many looking to reinvest it into stable dividend paying stocks like utility companies
https://www.nzherald.co.nz/business/...ectid=12217102
GNE biggest winner of the week :cool: Shares still trade cum the 8.45 cps divvy on Monday and Tuesday this week folks.
Fantastic yield on HLG and also has excellent prospects for gains.
I think GNE in particular but also MEL and CEN still have quite a lot of room to run north as the reality of this ultra low interest rate environment sinks in but the next shoe to drop in terms of yield could well be people accepting more risk for a really whopping yield with stocks like HLG, ZEL and AIR. I am well positioned :D
I also expect the REIT's to do very well and note the highest yield one is ARG, also well positioned.
I think if you're on top of your TA, i.e. know how to avoid a capital rout, it's probably not too late to jump on or hold these earners (and others that some tout) but historically they're all stretched and when (not if) the rout happens one must have the means to identify and act on it. It might be awhile away, difficult to tell when, but it will come when too many are piling into the entry when the exit is the best choice. Jmho, brush up on your TA skills, any which way the next phase after this is not going to end nicely. Too many negative macro effects, but in the meantime, enjoy.
new low rates worldwide will be with us for a long time , i think gentailers will be in very high demand going forward for safe div yields , no matter the macro environment
anyway some nice macro data to start the week
China's Factory Rebound Heralds Improvement in Global Outlook
https://www.bloomberg.com/news/artic...d=premium-asia
still thinking low growth , low rates will be the norm
A decade on many of the major banks overseas are still in a mess from the GFC. No way out of this mess other than ultra low interest rates right through into the 2030's and let inflation do its thing, in my opinion. Here people are going to be staring down the barrel of the best term deposit rates from banks being sub 3% later this year and after tax only just keeping up with inflation. Who wants to invest for no return ? Certainly not me !