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>Manawa Energy (MNW) is the first generator/retailer to downgrade guidance due to current wholesale electricity market conditions.</li><li>In essence, on some days it is unable to generate enough to cover its sales position and is being forced to buy from the spot market at elevated prices.</li><li>In addition, it is providing for a bad debt associated with an electricity retailer that MNW had been acting as an intermediary for. </li></ul>

Manawa Energy (MNW) is the first generator/retailer to downgrade guidance due to current wholesale electricity market conditions.In essence, on some days it is unable to generate enough to cover its sales position and is being forced to buy from the spot market at elevated prices.In addition, it is providing for a bad debt associated with an electricity retailer that MNW had been acting as an intermediary for. 

Manawa Energy - Dehydrated and Out of Puff

<ul><li>Manawa Energy (MNW) has had a weak start to FY25, with 1Q25 hydro generation and acquired wind generation volumes tracking below average.</li><li>All hydro generators are facing challenging conditions, resulting in material increases in the wholesale electricity price outlook.</li><li>We have lowered our FY25 EBITDAF forecast on a lower hydro generation assumption, but lifted later earnings on the stronger wholesale electricity price outlook. OUTPERFORM.</li></ul>

Manawa Energy (MNW) has had a weak start to FY25, with 1Q25 hydro generation and acquired wind generation volumes tracking below average.All hydro generators are facing challenging conditions, resulting in material increases in the wholesale electricity price outlook.We have lowered our FY25 EBITDAF forecast on a lower hydro generation assumption, but lifted later earnings on the stronger wholesale electricity price outlook. OUTPERFORM.

Manawa Energy - Generation Drying Up — 1Q25 Operating Stats

<ul><li>Manawa Energy (MNW) reported a FY24 EBITDAF result in-line with expectations, but surprised with a final dividend +29% (+2.5cps) ahead of expectations.</li><li>Whilst MNW has not released a new dividend policy, it is evident that it is comfortable holding more debt going forward and believes it can still execute on its development options.</li><li>FY25 guidance below expectations has been offset by our assumption that long-term wholesale electricity prices will be higher, such that we lift our target price +13cps (+2.7%) to NZ$4.93. </li></ul>

Manawa Energy (MNW) reported a FY24 EBITDAF result in-line with expectations, but surprised with a final dividend +29% (+2.5cps) ahead of expectations.Whilst MNW has not released a new dividend policy, it is evident that it is comfortable holding more debt going forward and believes it can still execute on its development options.FY25 guidance below expectations has been offset by our assumption that long-term wholesale electricity prices will be higher, such that we lift our target price +13cps (+2.7%) to NZ$4.93. 

Manawa Energy - Dividend Surprisingly Energised — FY24 Result

<ul><li>Manawa Energy's (MNW) FY24 EBITDAF guidance upgrade (+11% at the midpoint) is encouraging, notwithstanding three of the four factors cited for the upgrade are more one-off in nature and come from favourable 2H24 operating conditions.</li><li>The most positive aspect of the upgrade is the indication MNW has been able to reduce operating costs, which is particularly encouraging given the current inflationary environment.</li><li>We have increased our target price +25cps (+6.7%) to NZ$3.95 with the earnings upgrades also enabling a dividend increase. </li></ul>

Manawa Energy's (MNW) FY24 EBITDAF guidance upgrade (+11% at the midpoint) is encouraging, notwithstanding three of the four factors cited for the upgrade are more one-off in nature and come from favourable 2H24 operating conditions.The most positive aspect of the upgrade is the indication MNW has been able to reduce operating costs, which is particularly encouraging given the current inflationary environment.We have increased our target price +25cps (+6.7%) to NZ$3.95 with the earnings upgrades also enabling a dividend increase. 

Manawa Energy - Trading Energises Earnings

Thematic (Sector/Industry)

<ul><li>October 2024 was another strong hydro inflow month, with lake levels rising well above average, helping to suppress wholesale electricity prices and relieve winter 2025 anxiety.</li><li>Energy Margin analysis indicates Mercury (MCY) had the strongest month operationally of the generator/retailers, with Meridian Energy (MEL) still held back by the high cost hedging it took out.</li><li>With Methanex recommencing operations, November 2024 should be a more representative month for the generator/retailers. </li></ul>

October 2024 was another strong hydro inflow month, with lake levels rising well above average, helping to suppress wholesale electricity prices and relieve winter 2025 anxiety.Energy Margin analysis indicates Mercury (MCY) had the strongest month operationally of the generator/retailers, with Meridian Energy (MEL) still held back by the high cost hedging it took out.With Methanex recommencing operations, November 2024 should be a more representative month for the generator/retailers. 

Power Points - Hydro Recovery Continues — November 2024

New Zealand

Manawa Energy Limited is a renewable energy company. The Company generate powers through hydro power stations and wind farms throughout Australasia. Manawa Energy is also engaged in electricity distribution.

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Manawa Energy Ltd (MNW NZ)

Manawa Energy - Dehydrated and Out of Puff

Manawa Energy (MNW) is the first generator/retailer to downgrade guidance due to current wholesale electricity market conditions.

Forsyth Barr

Manawa Energy - Generation Drying Up — 1Q25 Operating Stats

Manawa Energy (MNW) has had a weak start to FY25, with 1Q25 hydro generation and acquired wind generation volumes tracking below average.

Forsyth Barr

Manawa Energy - Dividend Surprisingly Energised — FY24 Result

Manawa Energy (MNW) reported a FY24 EBITDAF result in-line with expectations, but surprised with a final dividend +29% (+2.5cps) ahead of...

Forsyth Barr

Manawa Energy - Trading Energises Earnings

Nevertheless, we still view MNW as expensive relative to most of its peers and it is still some way off reaching a final investment decision on its...

Forsyth Barr

Power Points - Hydro Recovery Continues — November 2024

October 2024 was another strong hydro inflow month, with lake levels rising well above average, helping to suppress wholesale electricity prices...

Forsyth Barr

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