Manawa Energy Ltd MNW

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NZD 4.16 0.00 (0.00%)

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As of May 27, 2024 4:59am Delayed Price Closed

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Company Report

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Manawa Earnings: Power Station Outages to Delay Profit Growth

Adrian Atkins May 20, 2024

Narrow-moat-rated Manawa Energy’s fiscal 2024 EBITDA of NZD 145 million was up 6% on last year and close to our expectations. Dividends surprised on the upside, up 19% to NZD 0.19 per share for the full year on an increased payout ratio, which we think is appropriate because of the good outlook. We continue to expect solid medium-term earnings growth as contracted sales prices and generation volumes rise. However, guidance for fiscal 2025 EBITDA of NZD 130 million-NZD 150 million missed our expectations because of planned outages at power stations for upgrades, which are also expected to hurt fiscal 2026.

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Price vs Fair Value

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MNW is trading within a range we consider fairly valued.

Price

NZD 4.16

May 27, 2024

Fair Value

NZD 4.40

May 20, 2024

Uncertainty

Medium

1-Star Price: NZD 5.35
5-Star Price: NZD 5.47
Economic Moat: Vlqtf
Capital Allocation: Rwkwtvzcr

Bulls Say, Bears Say

Bulls

High wholesale prices and the CPI-linked contract with Mercury underpin good earnings growth potential in the medium term, aided by investment to increase generation output.

Bears

Manawa faces volatility from hydrological conditions. Weak hydrology, caused by significantly lower inflows and lake levels, can adversely affect the generation business.

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Trading Information

Previous Close Price: NZD 4.16
Day Range: NZD 4.15–4.20
52-Week Range: NZD 4.02–5.05
Bid/Ask: NZD 4.15 / NZD 4.18
Market Cap: NZD 1.30 Bil
Volume/Avg: 24,519 / 64,217

Key Statistics

Price/Earnings (Normalized): 19.78
Price/Sales: 5.07
Dividend Yield (Trailing): 3.97%
Dividend Yield (Forward): 5.29%
Total Yield: 3.88%

Company Profile

Manawa is New Zealand's fifth-largest electricity generator. It has about 26 hydroelectric schemes in New Zealand, producing more than 1,900 GWh of electricity in an average rainfall year. Manawa's retail business was sold in 2022. Most electricity is sold to Mercury NZ under a long-term contract.

Sector: Utilities
Industry: Utilities - Renewable
Stock Style Box: Small Core
Total Number of Employees: 143
Website: https://www.manawaenergy.co.nz

Competitors

Valuation

Metric	MNW	GNE	MEL
Price/Earnings (Normalized)	19.78	16.58	53.90
Price/Book Value	1.09	0.93	2.76
Price/Sales	5.07	0.88	4.29
Price/Cash Flow	13.87	6.93	29.67

Price/Earnings

MNW

GNE

MEL

Financial Strength

Metric	MNW	GNE	MEL
Quick Ratio	0.37	0.60	0.67
Current Ratio	1.13	1.15	0.94
Interest Coverage	2.86	1.48	1.75

Quick Ratio

MNW

GNE

MEL

Profitability

Metric	MNW	GNE	MEL
Return on Assets (Normalized)	1.19%	1.69%	0.79%
Return on Equity (Normalized)	2.02%	3.51%	1.34%
Return on Invested Capital (Normalized)	2.56%	2.27%	1.00%

Return on Assets

MNW

GNE

MEL

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