Is NZ Windfarms (NZX:NWF) a dividend-paying stock?

Highlights

  • NZ Windfarms generates sustainable energy from its wind turbines, thereby endorsing the federal government's energy policy commitments.
  • Underpinned by prudent cost control measures and effective capital management, the Company had delivered sound HY21 results and paid an interim dividend in April 2021.
  • Being a regular distributor of dividends among its shareholders, NWF had earlier paid dividends in December 2020 as well as September 2020.
  • Currently, the Company is developing its formal dividend policy, which would be disclosed later this year.

Functioning in New Zealand, NZ Windfarms Limited (NZX:NWF) operates wind power generation assets to produce and supply electricity to the national grid in the country. The Company generates electricity from Tararua Ranges-based Te Rere Hau wind farm.

Operating 92 turbines, Te Rere Hau wind farm produces enough electricity to power around 19,000 households across the nation.

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Sound HY21 performance

In its HY21 results ended 31 December 2020, NZ Windfarms had reported a total revenue of NZ$6.9 million. Its EBITDAF and NPAT stood at NZ$3.2 million and NZ$0.32 million, respectively, during the said period. This could be achieved majorly on accounts of effective cost control, capital management, and hedging of electricity prices.

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Regular distributor of dividends among its shareholders

The Company had paid an unimputed interim dividend of 0.15 cps to its shareholders on 9 April.

Moreover, NWF had also paid an unimputed dividend of 0.40 cps on 31 December 2020.

Earlier, it had rewarded its shareholders with a final FY20 dividend of 0.70 cps on 22 September 2020.

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EBITDAF predicted for FY2021

Anticipating a successful execution of the second VVFPA, i.e., variable volume fixed price agreement, which is for 100% of the company’s production between 1 January-31 December 2021, NZ Windfarms has announced an EBITDAF in the range of NZ$5.7 million to NZ$6.3 million for FY21.

NWF is working on developing a formal dividend policy, in line with its VVFPA to set a clear picture pertaining to the future yield and EBITDAF guidance.

The Company expects to declare its dividend policy sometime later this year.

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Supporter of the NZ Government’s renewable energy policy commitments

Through its wind turbines, NZ Windfarms produces clean electricity which powers thousands of households across the Kiwiland, thereby supporting and endorsing its government’s sustainability goals as well as climate change commitments.

Agreeing to a new VVFPA for next year

In May 2021, the Company revealed that it had agreed to the terms of the fourth VVFPA from 1 October 2022 to 30 June 2023, for 25% of its production, which would eventually help in increasing its revenue.

Bottom Line

NZ Windfarms continues to remain focused on its operations to improve its efficiency and maintain margins. It aims to become a reliable yield generator both for its investors as well as for its other stakeholders.

On 26 August, at the time of writing, NZ Windfarms was rising by 1.82% at NZ$0.280.

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