New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Genesis Energy's (GNE) 46% ownership of the Kupe oil &amp; gas field is increasingly hard to justify and we have formed the view that selling it for nothing is a better outcome than retaining ownership</li><li>The strategic rationale for owning Kupe no longer exists and the arguments for not owning it continue to grow, including sustainability and attractiveness to investors, single asset risk, and decommissioning risk.</li><li>If GNE was able to sell Kupe (which is not straight forward), we estimate it would benefit from a ~+5% value uplift.</li></ul>

Genesis Energy's (GNE) 46% ownership of the Kupe oil &amp; gas field is increasingly hard to justify and we have formed the view that selling it for nothing is a better outcome than retaining ownershipThe strategic rationale for owning Kupe no longer exists and the arguments for not owning it continue to grow, including sustainability and attractiveness to investors, single asset risk, and decommissioning risk.If GNE was able to sell Kupe (which is not straight forward), we estimate it would benefit from a ~+5% value uplift.

Thematic (Sector/Industry)

<ul><li>Development pipeline goes to the next level: the headline sector generation development pipeline increased +8.2TWh (+38%) in February 2023, mainly due to MEL revealing a big increase in early stage options</li><li>1H23 results deliver strong earnings growth as expected, dividend growth more muted</li><li>Operating conditions continue to favour North Island hydro generators: February 2023 North Island hydro generation was +47% above average, a continuation of recent trends</li></ul>

Development pipeline goes to the next level: the headline sector generation development pipeline increased +8.2TWh (+38%) in February 2023, mainly due to MEL revealing a big increase in early stage options1H23 results deliver strong earnings growth as expected, dividend growth more mutedOperating conditions continue to favour North Island hydro generators: February 2023 North Island hydro generation was +47% above average, a continuation of recent trends

Power Points: Developing Overbuild Risk — March 2023

<ul><li>GNE delivers record half year result as expected: A key benefit of record hydro generation is it reduces the cost of generation</li><li>Guidance upgrade driven by more hydro generation, but increased capex takes the gloss off</li><li>Kupe development decision interesting: Also taking the gloss off the result was Kupe well development costs coming in +NZ$25m higher than expected at NZ$75m</li></ul>

GNE delivers record half year result as expected: A key benefit of record hydro generation is it reduces the cost of generationGuidance upgrade driven by more hydro generation, but increased capex takes the gloss offKupe development decision interesting: Also taking the gloss off the result was Kupe well development costs coming in +NZ$25m higher than expected at NZ$75m

Genesis Energy: Record Setting Half — 1H23 Result

<ul><li>North Island generators to deliver the growth: We anticipate most generator/retailers will lift 1H23 EBITDAF earnings</li><li>Outlook commentary should be positive from GNE and MCY, less so from CEN</li><li>Key themes likely to be development pipelines, inflation, and NZAS</li></ul>

North Island generators to deliver the growth: We anticipate most generator/retailers will lift 1H23 EBITDAF earningsOutlook commentary should be positive from GNE and MCY, less so from CENKey themes likely to be development pipelines, inflation, and NZAS

Electricity Sector: NI Hydro Powers 1H23 Sector Earnings

<ul><li>Genesis Energy (GNE) has benefitted from record 1H hydro generation, breaking 2TWh for the first time, such that we anticipate record 1H EBITDAF of NZ$312m</li><li>2Q23 was as good as 1Q23 from a hydro perspective and so the lack of a guidance upgrade is disappointing</li><li>The higher opex has also reduced our target price -5cps (-1.9%) to NZ$2.65</li></ul>

Genesis Energy (GNE) has benefitted from record 1H hydro generation, breaking 2TWh for the first time, such that we anticipate record 1H EBITDAF of NZ$312m2Q23 was as good as 1Q23 from a hydro perspective and so the lack of a guidance upgrade is disappointingThe higher opex has also reduced our target price -5cps (-1.9%) to NZ$2.65

Genesis Energy: Record Hydro Not Enough — 2Q23 Op Stats

New Zealand

Genesis Energy Ltd. generates, transports, and retails electricity. The Company owns and operates hydroelectric generating stations to produce electricity, as well as explores natural gas and bottled liquefied petroleum gas.

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Genesis Energy (GNE NZ)

Genesis Energy: Kupe, We Have a Problem

Genesis Energy's (GNE) 46% ownership of the Kupe oil & gas field is increasingly hard to justify and we have formed the view that selling it for...

Forsyth Barr

Power Points: Developing Overbuild Risk — March 2023

February 2023 was again characterised by high North Island hydro generation, which is good news for Genesis Energy (GNE) and Mercury (MCY), but the...

Forsyth Barr

Genesis Energy: Record Setting Half — 1H23 Result

Genesis Energy (GNE) delivered a record breaking half year result, as expected, with 1H23 EBITDAF of NZ$298m, +30% better than the previous record...

Forsyth Barr

Electricity Sector: NI Hydro Powers 1H23 Sector Earnings

1H23 is all about record North Island hydro generation, powering both Genesis Energy (GNE) and Mercury (MCY) to record half year results; Combined,...

Forsyth Barr

Genesis Energy: Record Hydro Not Enough — 2Q23 Op Stats

Genesis Energy (GNE) has benefitted from record 1H hydro generation, breaking 2TWh for the first time, such that we anticipate record 1H EBITDAF of...

Forsyth Barr

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