Queensland-based energy utility Genex Power [ASX:GNX] released a cash flow and activities report for the quarter ending 30 September.
Genex reported that its two leading power projects, Kidston Solar Project (KS1) and Jemalong Solar Project (JSP), both helped generate a total revenue of $7.2 million for the quarter.
Meanwhile, construction has been delayed for its 250MW/2,000MWh Kidston Pumped Storage Hydro Project (K2-Hydro).
GNX shares are up 45% over the past six months.
Source: tradingview.com
Genex quarterly insights and project problems
Genex reported that its KS1 project (which generated 28,908MWh in renewable energy) and JSP project (generating 19,217MWh) both contributed to the total revenue figure of $7.2 million over the past quarter.
However, the company also pointed out that construction continues for both its outstanding K2-Hydro and BBP projects.
While BBP has been progressing as usual, GNX revealed that ‘some disruption to underground tunnelling activity’ caused by a geological feature has slowed works at its K2-Hydro project.
The company was quick to assert the project ‘remains on schedule’ to reach energy production milestones by the set period of the second half of 2024.
Genex is presently unsure if these delays will result in an upsurge in project expenses, stating that project funds remain ‘adequate’ for the time being.
Nevertheless, GNX’s BBP preparations continue without any specific problems or delays, with design and mobilisation details now complete.
The company’s BBP is now fully mobilised and is come closer to reaching delivery of Tesla Megapacks in the first half of 2023.
Genex also said that it is working closely with joint venture partner, J-POWER, to progress works on the Kidston Stage 3 Wind Project, with a final investment decision due in the second half of 2023.
Meanwhile Stage 1 of its newly acquired Bulli Creek Clean Energy Project awaits a final investment decision in the second half of 2024.
James Harding, Genex’s CEO, commented:
‘Both the Kidston Stage 1 Solar Farm and the Jemalong Solar Farm continued to generate strong revenues for the business. The completion of the refinancing of our existing subordinated debt facility with Infradebt will enable Genex to retain a higher proportion of cash generated by both projects, especially given the rise in merchant pricing in wholesale electricity markets.’
Genex’s faltering projects and hindered partnerships
Genex was deep in takeover talks with Skip Capital and Stonepeak, with negotiations progressing well in mid-September.
However, these negotiations have been stalled by project delays.
While Genex believes it has overcome the issues causing the delays, it remains to be seen what will transpire next with its not-yet-locked-in deal with Skip Capital.
All up, Genex received $9.2 million in customer sales in the past quarter, ending the quarter with $2.23 million from operating activities.
However, GNX spent $54.5 million in investing activities during the quarter, which was offset by borrowings of $81 million during the period.
Genex ended the quarter with $72.5 million in cash and cash equivalents.
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Regards,
Kiryll Prakapenka,
For Money Morning
