Windlab Share Price Tumbled Down After The Withdrawal Of Wind Farm Project

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As a result of grid connections risks, Windlab Limited (ASX: WND) has lost its only investor in Queensland. After the UK investor InfraRed Capital Partners taken away the 106-megawatt (MW) Lakeland Wind Farm project situated in the south of Cooktown, Queensland, the share price of the company took a deep downward fall. The stock price fell by 15% early this morning at A$1.18. The window within which the Windlab shares have traded over the past year was $1.11 and $1.85. The reason why the InfraRed Capital Partners had withdrawn the project from Windlab was its inability to price risks associated with the project’s grid connection which also includes the risk associated with the network losses and the curtailment risk.  

Grid connection risk is the risk that are associated with areas where the transmission lines are not strong enough to carry huge irregular wind and solar-generated energy. These risks arise due to heavy traffic in transmission lines which does not meet the requirement of the transmission lines. This has caused the developers from AEMO which the national electricity market operator is to add extra equipment to strengthen the grid in the areas with weak transmission lines.

Also, the regulator has the power to limit the amount of energy a project operator can send through the grid. As per the recent update, the company has now entered an agreement with Ergon Energy in the month of April to connect the wind farm to the grid.

InfraRed also entered in the month of August to offer funds for the whole Lakeland project. The company is now approaching and discussing with alternative investors about its far north Queensland project but says that there might be chances of delay in the financial close until early next year. Such risks have troubled project developers. Also, there was difference in view between the AEMO and operators in regard to the strengthening of nearby transmission lines.

The company has given a negative performance since its inception. The performance remains -29.73%. The one-year performance of the company is -28.57%. For the half yearly period ending 30 June 2018, the company made a net loss of $1.315 million. The total asset of the company is A$ 66.555 million. The total liabilities of the company are A$13.238 million. This indicates that company is in position to clear its long-term obligations. The current asset of the company is A$17.463 million. The total current liabilities of the company are A$8.6 million. This indicates that the company is in the position to meet its working capital as well as short term obligations. The total shareholders equity is worth A$53.317 million. The net cash used in operating activities is A$4,823,911. The net cash from investing activities is A$836,784. The net cash used in financing activities is A$1,902,623. The cash and cash equivalent at the end of period is A$8,310,022.

By the end of the day, the share price closed at A$1.180 with market capitalization of $87.91 million.


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