Ann: HALFYR: GNE: Genesis Energy H1 2016 results

• Release Date: 24/02/16 08:30
• Summary: HALFYR: GNE: Genesis Energy H1 2016 results
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					GNE
24/02/2016 08:30
HALFYR
PRICE SENSITIVE
REL: 0830 HRS Genesis Energy Limited (NS)

HALFYR: GNE: Genesis Energy H1 2016 results

Genesis Energy (GNE) - Delivering sound results
o EBITDAF up 1.5% to $175.5 million from $172.8 million
o Generation output up 2.9% with strong North Island hydro performance
o Customer account numbers grew
o Free Cash Flow increased 25% to $114.2m
o Dividend increased 2.5% to 8.2cps

Genesis Energy continued to deliver through a combination of increased
customer account numbers and increases in generation volumes, lifting Genesis
Energy's operating earnings by 1.5% to $175.5 million in the six months to 31
December 2015.

Genesis Energy Chairman, Dame Jenny Shipley, said that Genesis Energy's
strategy is delivering consistent financial earnings performance against a
backdrop of intense retail competition and variable wholesale market
conditions.

"Despite a challenging market, our earnings proved stable through better than
expected generation output, a focus on customer acquisition and simplifying
online processes, while paying close attention to operating expenses," she
said.

High profile customer acquisition campaigns and a focus on improving customer
delivery channels helped Genesis Energy, along with its affiliated brand
Energy Online, maintain market share in both the electricity and reticulated
gas retail market. A simpler customer sign-up process, new website and
customer service app enabled Energy Online to grow to more than 80,000
customers by the end of the Half Year.

The Company's electricity generation portfolio had a mixed six months with
periods of low inflows to its hydro schemes, followed by high rainfall
events. As a result of the variable hydrology during the first six months of
the year, coal-fired generation was down 28% but hydro generation from the
North Island schemes at Tongariro and Waikaremoana increased 6%. Generation
from the Tekapo stations was down 15%.

During the six month period, the Company made a decision to retire the
remaining coal/gas fired Rankine Units at the Huntly Power Station by
December 2018, unless there are significant changes in the market before
then. A relatively early announcement was made to provide the electricity
market, the Huntly community, and employees clarity about the future plans
for the Huntly Power Station. The long timeline provided Genesis Energy the
ability to continue to assess any future
commercial demand for the Rankine units while also considering the potential
for new development options on the Huntly site to meet its own future needs.

Chief Executive Albert Brantley said, "while there remains continued
speculation about the announced coal/gas fired Rankine Units' retirement
date, Genesis Energy has not changed its position that the Rankine Units'
utilisation will continue to decline and the Company is preparing for a 2018
closure date".

"However, we have always said we are open to approaches from market
participants that could see the Rankines remain in service past December
2018. We are engaged in bilateral discussions with market participants about
possible options for the Rankine capacity, and we will continue to evaluate
commercial proposals that could deliver value to our shareholders."

In December 2015, Genesis Energy materially upgraded its developed reserves
in the Kupe Gas and Oil field by 33%. However, Genesis Energy's share of oil
and gas production and sales decreased as a result of scheduled maintenance
outages at the Kupe production plant in Taranaki, and the timing of oil
exports. The Company's customer base for bottled LPG - sourced from Kupe -
continued to grow with 14,326 now taking regular deliveries (up 9.5% year on
year).

Cashflows increased as a result of careful management of stay-in-business
capital expenditure and a reduction in tax expense. The interim dividend of
8.2 cents per share, which is 2.5% higher than the interim dividend of
FY2015, represents 72% of Free Cash Flow. The interim dividend, which will be
80% imputed, will be paid on 15 April 2016 (record date is 1 April 2016).

Dame Jenny Shipley again reiterated that Genesis Energy aims to deliver
stable cashflows and a consistent, reliable and attractive dividend and this
result delivers on that approach. It expects its full year (FY2016) EBITDAF
to be similar to that reported for FY2015.

She also confirmed that this is the last half year announcement that Chief
Executive Albert Brantley will deliver. Mr Brantley will be leaving the
Company after almost eight years of successful leadership on 29 April and the
incoming Chief Executive, Marc England, will assume his role on 2 May.

Attached are the following documents in relation to Genesis Energy's
financial results for the six months ended 31 December 2015:

-Media Statement
-2016 Interim Report including financial statements for the six months ended
31 December 2015
- Results presentation
-NZX Appendix 1
-NZX Appendix 7

ENDS
End CA:00278174 For:GNE    Type:HALFYR     Time:2016-02-24 08:30:10