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Genesis earnings drop

NZ NewswireNZ Newswire 23/08/2016 Pattrick Smellie

Genesis Energy, the country's largest electricity retailer, has posted a 2.7 per cent decline in annual operating earnings as a combination of lower electricity, gas and oil prices combined with ongoing retail market competition to reduce revenue.

Earnings before interest, tax, depreciation, amortisation and movements in the value of financial instruments declined by $9.5 million to $335.3m in the year to June 30, on total revenues of $2.01 billion, against $2.02b in the prior year, it said on Wednesday.

Total operating expenses fell to $1.68b from $1.75b.

The Genesis board is satisfied with the overall performance in what has been a challenging year, chairwoman Jenny Shipley says.

The result reflected "a determination by the board to drive improved cost control and efficiencies to offset the external influences impacting on the business as it looks to the future", she said.

Newly appointed chief executive Marc England, who replaced long-serving Albert Brantley in May, says the company is reorienting to improve its ability to "execute its strategies at speed".

Mr England has delivered a shake-up of the company's senior management team.

"In the short term, we are determined to extract more value from our existing operations while we implement our plans to deliver new services for our customers and thrive in the evolving energy market," he said.

Net profit after tax increased to $184.2m, from $104.8m the previous year, as its generation assets were revalued up by $138m, compared with no movement in their value the year earlier.

Consistent with other players in the sector, capital expenditure plans for the year ahead are limited because of current over-supply of electricity capacity, with just $39.7m of "stay-in-business" capex planned.

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