Genesis earnings rise, but profit halves on valuation hit
Chief executive Malcolm Johns said the results reflected another year of disciplined strategy execution.
Genesis Energy reported a rise in normalized operating earnings to $522 million, up 11% compared to the previous year. However, reported profit halved to $85 million, primarily due to a $123 million negative fair-value movement on financial instruments such as electricity swaps, options, and power purchase agreements. The company's revenue decreased to approximately $2.8 billion from $3.7 billion, primarily due to lower wholesale electricity volumes and prices. Nevertheless, stronger retail margins and better portfolio management helped offset this decline.
Genesis CEO Malcolm Johns credited disciplined strategy execution for the results, highlighting improvements in margin quality, cost discipline, and capital management across the business. The company has invested around $3 billion over the next five years in products, services, and generation assets. To strengthen its balance sheet, Genesis raised $400 million in capital, reducing its debt leverage ratio to 1.6 times. This funding has supported investments in solar, battery storage, and upgrades at Huntly.
Genesis has begun construction on the 136 megawatt Tihori solar farm near Edgecumbe and finalized investment decisions for the Leeston solar farm and the second stage of the grid-scale battery project at Huntly. The first stage of the Huntly battery is expected to be fully operational by September 2023. For the 2027 financial year, Genesis forecasts normalized EBITDAF to range between $480 million and $520 million, with a path to reach the upper $500 million range by 2028.
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