Genesis Energy Ltd GNE

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A$2.12 −0.02 (0.93%)

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As of Apr 26, 2024 5:03am Delayed Price Closed

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Company Report

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Genesis Energy: Rainfall and Earnings Normalizing

Adrian Atkins Apr 23, 2024

Narrow-moat Genesis Energy had a stellar fiscal 2023 as its hydroelectric schemes benefited from heavy rainfall in the North Island. In the fiscal year to date, rainfall has been more modest, and we estimate earnings are tracking broadly in line with our prior expectations. We maintain our view that Genesis can achieve its EBITDA guidance of NZD 430 million for fiscal 2024 and NZD 500 million for 2025. We keep our NZD 2.70 per share fair value estimate and consider the stock slightly undervalued.

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Price vs Fair Value

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GNE is trading at a 14% discount.

Price

A$2.14

Apr 24, 2024

Fair Value

A$9.20

Nov 30, 2023

Uncertainty

High

1-Star Price: A$5.51
5-Star Price: A$1.40
Economic Moat: Gndmmbt
Capital Allocation: Mnfphpcmn

Bulls Say, Bears Say

Bulls

Persistently high wholesale electricity prices are flowing through to customer tariffs, supporting earnings growth.

Bears

The Kupe stake introduces oil price volatility. Earnings should benefit from recent strength in the oil price (with a lag because of hedging) but over the long term, earnings are at risk from depletion of the field.

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Trading Information

Previous Close Price: A$2.14
Day Range: A$2.12–2.15
52-Week Range: A$2.10–2.61
Bid/Ask: A$2.11 / A$2.12
Market Cap: A$2.28 Bil
Volume/Avg: 126,902 / 34,548

Key Statistics

Price/Earnings (Normalized): 17.80
Price/Sales: 0.93
Dividend Yield (Trailing): 6.71%
Dividend Yield (Forward): 6.71%
Total Yield: 6.93%

Company Profile

Genesis Energy is one of New Zealand's leading producers of electricity, accounting for more than 15% of the country's total generation. The firm enjoys a strong retail presence, with the highest retail market share, at over 25%. The company has a mix of renewable and thermal assets, with the latter accounting for about 55%-60% of the firm's overall production. The company has a 46% interest in the Kupe oil and gas field.

Sector: Utilities
Industry: Utilities - Independent Power Producers
Stock Style Box: Mid Value
Total Number of Employees: 1,204
Website: https://www.genesisenergy.co.nz

Competitors

Valuation

Metric	GNE	MNW	MEL
Price/Earnings (Normalized)	17.80	11.25	50.77
Price/Book Value	0.98	1.04	2.60
Price/Sales	0.93	6.28	4.04
Price/Cash Flow	7.36	14.42	27.95

Price/Earnings

GNE

MNW

MEL

Financial Strength

Metric	GNE	MNW	MEL
Quick Ratio	0.60	0.73	0.67
Current Ratio	1.15	1.30	0.94
Interest Coverage	1.48	7.04	1.75

Quick Ratio

GNE

MNW

MEL

Profitability

Metric	GNE	MNW	MEL
Return on Assets (Normalized)	1.69%	5.88%	0.79%
Return on Equity (Normalized)	3.51%	9.96%	1.34%
Return on Invested Capital (Normalized)	2.27%	8.26%	1.00%

Return on Assets

GNE

MNW

MEL

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