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NZ Windfarms [NZX: NWF], which operates Te Rere Hau windfarm in the Tararua Ranges, narrowed its first-half loss, generating more energy but achieving less revenue than in the same period a year earlier.
The company made a net loss $1.23 million, or 0.43 cents per share, in the six months ended Dec 31 from a loss of $1.26 million, or 0.44 cps, a year earlier, it said in a statement. Revenue from ordinary activities fell 1.9 percent to $3.9 million.
The company lifted generation 7.4 percent to 63,530 megawatts per hour, while electricity revenue fell 9.5 percent to $2.7 million, as prices were impacted by high hydro lake storage levels, more capacity coming online and soft consumer demand.
NZ Windfarms failed to get an early exit from a lease with Powerco, one of New Zealand's largest electricity and gas distributors, which it hoped would reduce costs and end its $6.5 million bank guarantee with Bank of New Zealand.
The two companies formed an alliance in 2007 for Powerco to build the transmission infrastructure connecting the Te Rere Hau windfarm to TrustPower's Tararua Ranges substation and lease it back to NZ Windfarms.
"Unfortunately the company has been unable to get agreement on early release from Powerco and has therefore renewed its guarantee with the BNZ to support the lease," chairman Derek Walker said.
"In the board's view, it is also prudent to hold some surplus funds on its balance sheet to provide resources which may be required to address any major costs to resolve the resource consent issue, costs that would arise should our warranties become inoperative, our on-going reconditioning programme require further financial support and any other unforeseen issues," he said.
Surplus funds would be retained rather than paid as a dividend or returned via a share buy back.
The company used $7.23 million of cash in the period, leaving it with cash and equivalents of $2.75 million as at Dec 31. It had an operational cash outflow of $379,000, and had to invest $6.5 million in a BNZ term deposit to continue its guarantee with the bank.
NZ Windfarms said it's appealing an Environment Court decision which found in favour of Palmerston North City Council over noise complaints from the Te Rere Hau.
It gave no specific guidance for expected full-year profit.
The shares last traded at 6.8 cents, and have fallen 32 percent in the past year.