Manawa Energy's profit tumbles. Photo: 123RF
Manawa Energy's bottom-line profit has crashed after a challenging year shaped by weak generation, high wholesale electricity prices and after an independent power retailer defaulted on payments.
Key numbers for the 12 months ended March compared with a year ago:
- Net profit $0.3m vs $24.1m
- Revenue $490.8m vs $473.1m
- Underlying earnings $31.5m vs $66m
- Bad debt write-off $6.8m
- No dividend vs 11 cents per share
The electricity generator, which has just received regulatory approval to be taken over by Contact Energy, saw its total generation volumes fall 15 percent due to low hydro inflows and wind generation.
Manawa said it also faced "extremely challenging market conditions".
"Extreme fuel shortages across the winter period of 2024 drove wholesale electricity spot prices to record levels," the company told the NZX. "Manawa was, at times, exposed to these spot prices given the relatively fixed nature of its contractual sales volumes."
The shortages were driven by low national hydro inflows, below-average wind generation, and gas shortages. But it "quickly reversed" as conditions returned to normal and as gas availability "dramatically increased".
"The sudden and rapid increase in available fuel saw spot electricity prices fall dramatically across most of the period from September 2024 through to the end of the calendar year," Manawa said.
The company also wrote off $6.8 million in bad debts after independent retailer Prime Energy defaulted on payments.
"The unprecedented conditions of winter 2024 resulted in a further adverse impact on the business with an independent electricity retailer, for whom Manawa acted as a wholesale intermediary, defaulting on its payment obligations," it said.
Manawa said it recovered a significant portion of the original debt.
The company did not provide a full-year outlook and did not declare a final dividend amid the imminent takeover by Contact Energy.
Manawa expected the deal, which would be carried out by way of a scheme of arrangement, to be implemented in July.
