Thanks @emptytrolly, I appreciate your analysis and digging through the data.
I don't want to wear rose tinted glasses, I am really just trying to be objective on the data. The WEM vs NEM is different we can all agree on that - but my point is that no matter if you are Delorean, AGL, Origin, or any other player in the wholesale energy market - retail margins have been reducing over the past years. This is a summary table of the data you presented, and I believe anyone eye balling it would see that margins have steadily declined.
The decline in margins is for two reasons First, they are selling less of their own energy and relying more on buying wholesale energy which simply has lower margins. Second, the more rapidly the wholesale prices changes, the more they get compressed: customers may renew their rates every 12 months, but they're buying at wholesale prices moving much quicker. They are addressing the second point with hedging and longer term contracts, but that also costs money.
The fundamental issue for retailers is that they were acquiring customers aggressively by offering cheap energy rates - and banking on the hope that wholesale prices remained relatively stable or declined. That has been a terrible bet to make. It's like writing cheap insurance contracts, you only get screwed on the backend.
And just quickly on the point of the capital raise @emptytrolly notes. Even if retail isn't a donut, the cash flow they can generate from retail is completely inadequate to fund the EPC builds. Delorean has a $500m pipeline (possible), of which $200m is in development (probable) and $80m is in/near construction. Retail may generate $1-2m of operating EBITDA in good years. It's not the solution. Access to debt financing is the only way to avoid further capital raises. Planum Partners were given the mandate for Delorean when fixed rates were like ~2%, and now we're seeing them north of 5%. Planum aren't market makers, they're just getting the finance from CBA, NAB, etc. You know, just yesterday Delorean was posting on Twitter about their ISO certification - which is fantastic - but when I ask about their Planum Partners financing, all I hear are crickets.
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