New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Contact Energy (CEN) has had a steady end to FY24, with Tauhara commissioning volumes helping to offset below average hydro generation.</li><li>We calculate FY24 EBITDAF was NZ$662m (after market–making losses), up +NZ$116m on FY23.</li><li>With hydro conditions continuing to be challenging, short-term earnings risk is to the downside, but rising ASX futures prices will help lift medium-term earnings.</li></ul>

Contact Energy (CEN) has had a steady end to FY24, with Tauhara commissioning volumes helping to offset below average hydro generation.We calculate FY24 EBITDAF was NZ$662m (after market–making losses), up +NZ$116m on FY23.With hydro conditions continuing to be challenging, short-term earnings risk is to the downside, but rising ASX futures prices will help lift medium-term earnings.

Contact Energy - Steady End to FY24 - June '24 Operating Stats

<ul><li>Contact Energy's (CEN) first-time FY25 EBITDAF guidance and dividend guidance was a big disappointment.</li><li>In essence, CEN is short generation and needs to cover its position in a market with elevated wholesale electricity prices.</li><li>The modest-to-flat dividend outlook means investors will have to wait, possibly another three years, before there is meaningful dividend growth. </li></ul>

Contact Energy's (CEN) first-time FY25 EBITDAF guidance and dividend guidance was a big disappointment.In essence, CEN is short generation and needs to cover its position in a market with elevated wholesale electricity prices.The modest-to-flat dividend outlook means investors will have to wait, possibly another three years, before there is meaningful dividend growth. 

Contact Energy - Caught Short — Expectations Revised Lower

Thematic (Sector/Industry)

<ul><li>June 2024 was notable for the first dip in electricity demand in eight months, in part due to NZAS backing off demand at Meridian Energy’s (MEL) request.</li><li>Wholesale electricity prices remained high due to continued below average hydro storage. Contact Energy’s (CEN) Tauhara geothermal plant completed its reliability run in June, so we expect it will have had a strong finish to FY24.</li><li>MEL perhaps less so, as its market share fell to the lowest in three years. We retain our positive outlook on the sector and have an OUTPERFORM rating on CEN, Genesis Energy (GNE) and Manawa Energy (MNW). </li></ul>

June 2024 was notable for the first dip in electricity demand in eight months, in part due to NZAS backing off demand at Meridian Energy’s (MEL) request.Wholesale electricity prices remained high due to continued below average hydro storage. Contact Energy’s (CEN) Tauhara geothermal plant completed its reliability run in June, so we expect it will have had a strong finish to FY24.MEL perhaps less so, as its market share fell to the lowest in three years. We retain our positive outlook on the sector and have an OUTPERFORM rating on CEN, Genesis Energy (GNE) and Manawa Energy (MNW). 

Power Points - Solar Flares Again — July 2024

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/genex-power-ltd" target="_blank" data-smartkarma-citation="entities:29079:1" rel="noopener">Genex Power Ltd (GNX AU)</a> IE considers <a href="https://www.smartkarma.com/entities/electric-power-development-c" target="_blank" data-smartkarma-citation="entities:292:1" rel="noopener">Electric Power Development C (9513 JP)</a>’s scheme (A$0.275) and off-market takeover offer (A$0.270) fair and reasonable. </li>
<li>The offer is conditional on FIRB and shareholder approval. Skip Capital, which can block the scheme, has not declared its intention regarding J-Power's offer or launched a competing offer.</li>
<li>Skip’s silence suggests a greater probability of accepting the scheme offer. If the scheme fails, the takeover offer, due to its structure and price, caps the downside.</li>
</ul>


The Genex Power Ltd (GNX AU) IE considers Electric Power Development C (9513 JP)’s scheme (A$0.275) and off-market takeover offer (A$0.270) fair and reasonable. 
The offer is conditional on FIRB and shareholder approval. Skip Capital, which can block the scheme, has not declared its intention regarding J-Power's offer or launched a competing offer.
Skip’s silence suggests a greater probability of accepting the scheme offer. If the scheme fails, the takeover offer, due to its structure and price, caps the downside.


Genex Power (GNX AU): Scheme Vote on 16 July as Skip Remains Silent

<ul><li>May 2024 was a watershed month for the sector, ending with the news that NZAS has signed three 20 year electricity supply contracts, providing welcome certainty to the sector.</li><li>It was also a very strong electricity demand month, only partly explained by the colder weather as evidence mounts that the long-expected electricity demand growth is here.</li><li>Strong electricity demand and declining hydro storage lakes resulted in a record average Otahuhu (OTA) wholesale electricity price.</li></ul>

May 2024 was a watershed month for the sector, ending with the news that NZAS has signed three 20 year electricity supply contracts, providing welcome certainty to the sector.It was also a very strong electricity demand month, only partly explained by the colder weather as evidence mounts that the long-expected electricity demand growth is here.Strong electricity demand and declining hydro storage lakes resulted in a record average Otahuhu (OTA) wholesale electricity price.

Power Points - Demand Continues to Heat Up — June 2024 External Inbox Updates

New Zealand

Contact Energy Limited is a diversified and integrated energy company which focuses on the generation of electricity and the sale of electricity and gas in New Zealand.

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Contact Energy (CEN NZ)

Contact Energy - Steady End to FY24 - June '24 Operating Stats

Contact Energy (CEN) has had a steady end to FY24, with Tauhara commissioning volumes helping to offset below average hydro generation.

Forsyth Barr

Contact Energy - Caught Short — Expectations Revised Lower

The modest-to-flat dividend outlook means investors will have to wait, possibly another three years, before there is meaningful dividend growth.

Forsyth Barr

Power Points - Solar Flares Again — July 2024

June 2024 was notable for the first dip in electricity demand in eight months, in part due to NZAS backing off demand at Meridian Energy’s (MEL)...

Forsyth Barr

Genex Power (GNX AU): Scheme Vote on 16 July as Skip Remains Silent

Skip’s silence suggests a greater probability of accepting the scheme. The takeover offer caps the downside due to structure and price. The gross...

Arun George

Power Points - Demand Continues to Heat Up — June 2024 External Inbox Updates

May 2024 was a watershed month for the sector, ending with the news that NZAS has signed three 20 year electricity supply contracts, providing...

Forsyth Barr

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