Morningstar

Genesis Energy Ltd GNE

Morningstar Rating
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Stock XNZE Rating as of
NZD 2.13 +0.01 (0.24%)
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As of Delayed Price Closed

Company Report

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Genesis Energy Earnings: Soft Result as Expected; Improvement Likely in the Near Term

Adrian Atkins

Narrow-moat-rated Genesis Energy reported fiscal 2024 EBITDA of NZD 407 million, down 22% on the prior year’s record performance, close to our expectations. Earnings were hurt by gas supply issues, lower hydroelectric output amid drier weather, and a seven-month unplanned outage of one of the units at the Huntly power station. Guidance for EBITDA of NZD 460 million in fiscal 2025 is 3% above our prior expectations. We expect growth to be driven by better power station availability, retail price increases, and cost-out initiatives. We bring our fiscal 2025 forecast in line with guidance, but our longer-term forecasts are mostly unchanged. Our NZD 2.50 per share fair value estimate stands, and at current prices, the stock screens as slightly undervalued.

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Price vs Fair Value

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GNE is trading at a 329% premium.
Price
NZD 2.13
Fair Value
NZD 4.60
Uncertainty
High
1-Star Price
NZD 8.56
5-Star Price
NZD 3.80
Economic Moat
Dnydh
Capital Allocation
Tpthbksv

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
NZD 2.12
Day Range
NZD 2.11–2.15
52-Week Range
NZD 2.05–2.60
Bid/Ask
NZD 2.12 / NZD 2.15
Market Cap
NZD 2.30 Bil
Volume/Avg
637,255 / 316,383

Key Statistics

Price/Earnings (Normalized)
36.77
Price/Sales
0.75
Dividend Yield (Trailing)
6.59%
Dividend Yield (Forward)
6.59%
Total Yield
6.59%

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

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Metric
GNE
MEL
MCY
Price/Earnings (Normalized)
 36.7743.8431.01
Price/Book Value
 0.861.881.82
Price/Sales
 0.753.202.55
Price/Cash Flow
 6.3023.2014.32
Price/Earnings
GNE
MEL
MCY

Financial Strength

Metric
GNE
MEL
MCY
Quick Ratio
 0.710.750.50
Current Ratio
 1.181.050.89
Interest Coverage
 2.278.362.80
Quick Ratio
GNE
MEL
MCY

Profitability

Metric
GNE
MEL
MCY
Return on Assets (Normalized)
 2.43%3.19%1.71%
Return on Equity (Normalized)
 5.11%5.35%3.39%
Return on Invested Capital (Normalized)
 3.28%4.30%2.36%
Return on Assets
GNE
MEL
MCY

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