Manawa Energy Limited Analysis

Overview

Manawa Energy has been listed on the NZX since 1994 (formerly under NZX: TPW).

Manawa Energy is one of Aotearoa New Zealand’s largest renewable electricity generators. Our goal is to develop renewable generation to support our country’s ambitions for a thriving, low-emissions and climate-resilient future.

Manawa Energy also operates a commercial and industrial electricity business with approximately 680 customers at more than 14,000 electricity connections nationally, currently supplying approximately 1,250GWh per annum.

(Figures quoted are accurate as at May 2022)

Performance

The following information was extracted from Manawa Energy Limited's half year results, released on 8 November 2024:

FY25 Interim Financial Results Summary

Key Points:

• Profit after tax of ($3.3m), down from $55.9m in H1 FY24, driven by challenging market conditions, a material provision for bad debt, and a $23.0m non-cash fair value loss on financial instruments (prior corresponding period was a $23.6m gain);
• EBITDAF fell $34.2m to $43.6m, and underlying earnings fell $23.5m to $15.5m due to extremely challenging market conditions in H1 FY25, including record wholesale prices during periods of significant fuel constraints, and the material provision for bad debt;
• Manawa’s production volumes were 188GWh (or 17%) lower than the pcp, driven by a prolonged period of very low hydro inflows;
• Fully imputed interim dividend declared of 4.0 cents per share to be paid on 6 December 2024;
• Significant progress on the major asset refurbishment programme across the period included the commissioning of a new turbine at Matahina, completion of the Highbank ‘pumps as turbines’ project, practical completion of the Arnold Dam strengthening works, restoration of both Esk scheme stations, and Bream Bay station capacity restored to 8MW (from 4.5MW);
• Two key new development projects and two existing asset reconsenting projects were included in the Fast Track Approvals Bill (FTAB) schedule; and
• Resource consents have been secured for the 65MWac Argyle Solar Farm.

Financial Performance

Manawa’s first half financial performance was materially impacted by these conditions. Reduced generation production volumes, lower wind offtake volumes, elevated cost of hedging, and a provision for bad debt all weighed heavily on the result.

Normalised EBITDAF fell $32.1m and underlying earnings saw a $23.5m reduction from the same period last year.

Profit after tax of ($3.3m) was $59.2m lower than the corresponding period last year – a result of the above combined with a $23.0m non-cash fair value loss on financial instruments (prior corresponding period was a $23.6m gain).

Capital investment totalled $25.9m and was predominantly related to the major asset refurbishment programme.

A fully imputed interim dividend of 4.0 cents per share has been declared, compared to 8.0 cents per share in the prior corresponding period, reflecting the challenging conditions across the first half.