Tilt Renewables' earnings drop as wind levels fall
- May 13, 2021 2:40 pm GMTMay 13, 2021 5:33 pm GMT
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Takeover target Tilt Renewables’ annual operating profit fell by 36 per cent in what the company said was a transitional year.
The wind farm specialist sold its 270 megawatt Snowtown 2 Wind Farm, near Adelaide, in the previous year and ramped up operations at Dundonnell, in Western Victoria, and Waipipi in Taranaki in the latest year to March.
Tilt is in the throes of being taken over by Powering Renewables Australia Fund (PowAR) and Mercury NZ.
The company’s earnings before interest, tax, depreciation, amortisation and financial instruments (ebitdaf) came to A$74.9 million ($104.6m), down from A$117.5m, in 2020.
Tilt’s net profit came to A$66.95m compared with A$478.4m in the previous year — which was inflated by the Snowtown sale. Normalised for Snowtown, revenue was 18 per cent higher than the prior year.
The existing portfolio delivered softer production volumes, down 8 per cent in Australia and 9 per cent in New Zealand largely due to below-average wind conditions.
With the retained portion of Snowtown proceeds, Tilt’s balance sheet remained strongly positioned with cash and liquid financial assets sufficient to fund the anticipated Rye Park development in New South Wales.
Tilt split its earnings guidance between Australia and New Zealand. In Australia, the ramp up of Dundonnell production is budgeted to continue through the first half, resulting in an Australian ebitdaf range of A$58m to A$66m.
The New Zealand ebitdaf guidance range, incorporating a full 12-month contribution from Waipipi, is expected to be A$46 to A$48m.
A scheme of arrangement signed with PowAR and Mercury NZ Limited sets the business up to accelerate the transition to renewables in Australia and New Zealand, Tilt said.
The offer equates to $8.10 a share — a 106.6 per cent premium above the Tilt share price prior to the announcement of majority owner Infratil’s strategic review of its interest last December.