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25/1/2019 — General
Genesis details strong quarter

The December quarter report for Genesis Energy Ltd (NZX & ASX: GNE) said the unprecedented gas and hydro shortage in the quarter resulted in the company running two dual fuel Rankine units at Huntly on coal for long periods.

Release of this report followed media reports on the fact Huntly had to provide power back up for several energy produces because of the low hydro storage and lack of windpower for part of the quarter.

The horrified Greenpeace, on learning that a substantial amount of coal had to be used for the swaption power because of issues with NZ gas production, claimed now was the time to introduce solar energy.

Compared to sunnier Australia, New Zealand has limitations on solar power beyond individual domestic use.

Genesis said the five week planned 400 MW CCGT outage at Huntly also contributed to a tight market, with Genesis managing risk to its own portfolio through advanced hedging strategies.

“Consequently, other market participants called on Genesis for energy and coal had to be imported to supplement local supplies. Genesis has successfully demonstrated the importance and value of its fuel diversity as well as a flexible supply chain throughout a volatile market period,” the company reported.

On the customer front in the quarter Genesis continued to invest in loyalty, customer service and product innovation, with Brand NPS up 6 percentage points to 8% versus the same time last year. Customer church was down to 17% and dual fuel customer numbers steadily increasing.

Netback margins were up for electricity and LPG were but down for gas due to timing of price increases.

There was reduced production at Kupe in the quarter, with gas production down 12% versus the same time last year, and corresponding impacts on LPG and oil production.

LPG yields were up 2.5% while oil yield was down due to the natural decline in the field. Oil sales were down 47% versus the prior comparable period due to the timing of shipments and reduced field production.

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