Why these 5 NZX energy stocks can be considered before 2021 ends

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 Why these 5 NZX energy stocks can be considered before 2021 ends
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  • NZ will lower net emissions by 50% below gross 2005 levels by 2030.
  • Meridian notified that the suspension of Potline 4 deal has been extended by 31 January 2022.
  • Contact Energy announced plans to issue $200 million worth of green bonds to NZ investors.

New Zealand has increased its contribution to the combined global effort to tackle climate change.

At the United Nations climate conference in Glasgow Monday, PM Jacinda Ardern and Climate Change Minister James Shaw announced that NZ would increase its contribution to tackle climate change by lowering GHG emissions by 50% by 2030. This will be equivalent to a 41% reduction on the 2005 levels using what is identified as the emissions budget method.

New targets are in accordance with recommendations of an independent Climate Change Commission.

Amid an increased need to address climate concerns, let’s look at how these 5 energy stocks are doing.

% NZX energy Stocks and their mkt cap, 6-month returns

Image source: © 2021 Kalkine Media, Data source- Refinitiv

Genesis Energy Limited (NZX:GNEASX:GNE)

A diversified NZ-based energy company, Genesis conducted its annual shareholder meeting on 29 October. The Group reported positive underlying earnings and EBITAF in FY21. However, high growth in the numbers was restricted due to its carbon fixed price option and beach arbitration decision.

RELATED READ: Genesis (NZX:GNE): What were the highlights of ASM?

The Group’s FY22 guidance stands in the range of $420 million to $440 million. It also plans to eliminate 1.2 million tonnes of carbon emissions by 2025.

GNE ended the day 0.46% in green to close at $3.275.

Meridian Energy Limited (NZX:MELASX:MEZ)

NZ’s electricity producer, Meridian, notified that the deferral of Potline 4 deal between Meridian and New Zealand Aluminum Smelters Limited has been extended by 31 January 2022.

A date can be specified by NZAS on or after 1 February and on or before 31 March 2022 to restart operations.

MEL ended the day 1.2% in red to close at $4.93.

Contact Energy Limited (NZX:CENASX:CEN)

Contact Energy Limited announced plans to issue unsecured green capital bonds worth up to $200 million to retail and institutional investors in NZ.

GOOD READ: Can electric batteries help shipping industry go green?

The funds acquired would be used to finance renewable energy assets. 

CEN ended the day 0.98% in red to close at $8.1.

NZ Windfarms Limited (NZX:NWF)

NZ Windfarms conducted its AGM on 27 October. The Group reported a lower EBITDA of $5.1 million than its guidance range of $5.7 million to $6.3 million in FY21. This was due to lower revenue related to unseasonable low winds in the last six weeks and a week-long constant grid outage, and higher operating expenditure.

RELATED READ: How are 5 NZX energy stocks performing amid RBNZ’s latest report?

The Group also confirmed that its Chair John Southworth would be stepping down from his position.

NWF ended the day 2.0% in green to close at $0.25.

Mercury NZ Limited (NZX:MCY)

Power producer and retailer Mercury NZ issued an operating update for the third quarter. As Waikato watershed inflows remained below normal, the group's hydro generation remained low and below average at 953GWh.

GOOD READ: What was New Zealand’s ranking in KPMG’s latest survey?

Due to a 44-day unexpected outage at the Kawerau power station that concluded on 20 July, geothermal generation declined by 80GWh to 607GWh.

MCY ended the day 0.57% in green to close at $6.17.

Bottom Line

NZ’s increased climate commitment will make a considerable impact on international attempts to meet the Paris Agreement objective of restricting global warming to 1.5 degrees above pre-industrial levels.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)


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