NZ Windfarms (NZX: NWF) has reduced its earning expectations for the 2011 financial year.
In a preliminary announcement released to NZX today, the company reported a loss before tax, asset impairments, depreciation, amortisation, and discount on acquisition of $533,000 for the year to 30 June 2010.
This compares to an April 2010 prospectus forecast of a loss of $435,000, and to a loss of $626,000 last year.
The worse-than-expected results were driven by poor wind resource during May and June, and the dampening impact of high hydro levels on wholesale electricity market prices.
Net cash inflow for the year was $28.9m, thanks to a successful rights issue, with $18.8m carried forward to the current year.
No dividend will be paid out, as forecast in April.
2011 forecast hit
NZ Windfarms' primary asset, Te Rere Hau, is due to be completed by the end of the current financial year, leading to positive operating cash flows for 2011.
But delays in the construction of the project's last 32 turbines has been delayed by about four months, knocking back expected revenue.
The latest forecast is that ebitda for the 2011 year will be 16% below the April 2010 forecast, based on the price and wind speed assumptions made at the time.
On the plus side, two major disputes over Te Rere Hau have been resolved.
Manufacturer and former parent company Windflow Technology has agreed to pay NZ Windfarms a substantial bond until turbine certification upgrades are carried out, a report is produced to show upgrades are not needed, or after a 20-year warranty period.
In a separate development, a settlement with Aeolian Property Company (APCL) is expected to conclude by the end of the month.
NZ Windfarms' shares last traded down 4.35% to 22 cents.
Thu, 26 Aug 2010