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.

Thematic (Sector/Industry)

<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

<ul><li>After almost two years of negotiation, the deal has been done, with NZAS set to be New Zealand's largest electricity consumer for the foreseeable future.</li><li>It is a positive for the sector in many different ways, with the primary upside being the certainty that the deal provides.</li><li>Relative to our expectations, CEN, MCY and MNW were the winners from the deal, with MEL and GNE slight losers. </li></ul>

After almost two years of negotiation, the deal has been done, with NZAS set to be New Zealand's largest electricity consumer for the foreseeable future.It is a positive for the sector in many different ways, with the primary upside being the certainty that the deal provides.Relative to our expectations, CEN, MCY and MNW were the winners from the deal, with MEL and GNE slight losers. 

Electricity Sector - NZAS Powers On — The Deal Is Done

Equity Bottom-Up

<ul>
<li>Genesis Energy's (GNE) worst Kupe fears have been realised, with the KS-9 well proving to be a dud.</li>
<li>Production issues have not been resolved and so future Kupe production and earnings will be correspondingly lower than previously expected.</li>
<li>In addition to the earnings impact on Kupe, there is an indirect impact on the Energy business, with less gas available to run its gas-fired Unit 5 plant.</li>
</ul>


Genesis Energy's (GNE) worst Kupe fears have been realised, with the KS-9 well proving to be a dud.
Production issues have not been resolved and so future Kupe production and earnings will be correspondingly lower than previously expected.
In addition to the earnings impact on Kupe, there is an indirect impact on the Energy business, with less gas available to run its gas-fired Unit 5 plant.


Genesis Energy - Well That's No Good; Kupe Well Unproductive

<ul><li>Electricity demand growth has continued to surge, helping to keep wholesale electricity prices elevated despite the welcome top-up of hydro storage lakes that now sit close to average.</li><li>It was also a good month for NZAS, with the spike in aluminium prices a timely boost as Rio Tinto closes in on making a decision over the future of the smelter.</li><li>Following our report Demanding Some Attention — Sector Upgraded published 29 April 2024, which lifted sector target prices on average +18%, we upgraded the rating of three stocks. </li></ul>

Electricity demand growth has continued to surge, helping to keep wholesale electricity prices elevated despite the welcome top-up of hydro storage lakes that now sit close to average.It was also a good month for NZAS, with the spike in aluminium prices a timely boost as Rio Tinto closes in on making a decision over the future of the smelter.Following our report Demanding Some Attention — Sector Upgraded published 29 April 2024, which lifted sector target prices on average +18%, we upgraded the rating of three stocks. 

Power Points - Demand Powers On — May 2024

<ul><li>Genesis Energy (GNE) has reported mixed 3Q24 operating statistics, with retail performing well, wholesale okay, but Kupe troubles continue.</li><li>Retail volume and price growth continue to be positive, particularly in electricity.</li><li>The Kupe KS-9 well drilled in 2Q24 has not lifted production as expected, with final well commissioning pushed back a further month to the end of May. </li></ul>

Genesis Energy (GNE) has reported mixed 3Q24 operating statistics, with retail performing well, wholesale okay, but Kupe troubles continue.Retail volume and price growth continue to be positive, particularly in electricity.The Kupe KS-9 well drilled in 2Q24 has not lifted production as expected, with final well commissioning pushed back a further month to the end of May. 

New Zealand

Genesis Energy Ltd. generates, transports, and retails electricity. The Company owns and operates hydroelectric generating stations to produce electricity, as well as explores natural gas and bottled liquefied petroleum gas.

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Genesis Energy (GNE NZ)

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

Electricity Sector - NZAS Powers On — The Deal Is Done

After almost two years of negotiation, the deal has been done, with NZAS set to be New Zealand's largest electricity consumer for the foreseeable...

Forsyth Barr

Genesis Energy - Well That's No Good; Kupe Well Unproductive

Our target price is down -15cps (-4.9%) to NZ$2.90, but since February 2024 the market has more than priced in reduced Kupe production volumes....

Forsyth Barr

Power Points - Demand Powers On — May 2024

Electricity demand growth has continued to surge, helping to keep wholesale electricity prices elevated despite the welcome top-up of hydro storage...

Forsyth Barr

Genesis Energy - Retail Performing Well

Genesis Energy (GNE) has reported mixed 3Q24 operating statistics, with retail performing well, wholesale okay, but Kupe troubles continue.

Forsyth Barr

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