Genesis Energy's dividend payout exceeded profit

State-owned Genesis Energy paid out a $114 million dividend to the Government in the year ended June, nearly $10 million more than its reported profit of $104.5 million.

The dividend is 34% of the operating profit of $336.4 million, and is a high percentage payout compared to most listed companies.

Genesis is expected to be partially sold down by the Government next year as it continues with its policy of investing the proceeds of the state-owned assets sales into the Future Investment Fund.

This year is the first time since 2009 the company has paid a full dividend, reflecting its purchase of the Tekapo hydro-electricity assets from Meridian Energy in electricity reforms announced in 2010.

Perhaps with an eye to the potential for partial privatisation before the 2014 election, Genesis said it intended to pay a dividend consistent with, or in excess of, the total dividend paid in 2013.

The accounts showed Genesis paid the dividend out of its financing cash flows which were minus $127.9 million at balance date, but improved from minus $290 million in the previous corresponding period.

The company borrowed $120 million in the year and repaid $116 million of debt, $71.2 million of interest and other financial lease liabilities and $57 million towards the total dividend.

Operating cash flow at balance date was $298.3 million, down from $363.3 million in June last year.

The company reduced its gearing ratio (debt to debt plus equity) to 34.5% from 36.2% in the year.

Genesis chief executive Albert Brantley said despite lower operating earnings, the company's ability to deliver a ''solid result'' in difficult market conditions, including a long dry summer, was a reflection of the company's effective trading and focus on delivering practical options to customers.

The company remained the country's largest energy retailer, selling electricity, natural gas and lpg.

The diversity of the company's overall energy portfolio was clearly demonstrated by the contribution made by the company's 31% share of the sales for the year of operations of the Kupe oil and gas field, he said.

During the year, Genesis completed the first stage of the Tekapo canal remediation project within budget and ahead of schedule.

''The decision to invest between $145 million and $155 million was made to secure the company's ability to generate electricity at both Tekapo hydro stations for years to come.''

The second state of the project was scheduled for the next summer construction season, Mr Brantley said.


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