Tilt Renewables has slashed the carrying value of its Australian generation assets citing expected lower prices for renewable generation credits and electricity there.
Having taken independent advice, the company said it will reduce the carrying value of its Australian generation assets by up to A$130 million to about A$875 million.
The asset values were last reviewed in March 2017, Melbourne-based Tilt said.
“This reduction in carrying value reverses earlier year valuation movements in the asset revaluation reserve and will have no impact on the profit and loss of the business in the current financial year.”
Tilt operates five wind farms in Australia, including the Salt Creek project it commissioned in July, and got about 70 percent of its production there in the six months through September. It also operates the Tararua and Mahinerangi wind farms in New Zealand and this week announced plans to develop a 100 MW project at its Waverley site on the southern Taranaki coast.
Tilt is currently under a takeover offer from Infratil and Mercury NZ for the 22 percent of the company they don’t already own.
The write-down was announced after the stock closed at $2.28. The takeover offer, resisted by Tilt, is priced at $2.30.
Tilt also today raised its full-year earnings guidance citing stronger than expected generation in the first six months of the period.
It now expects underlying operating earnings of between A$134 million and A$138 million in the year through March. It had previously forecast earnings before interest, tax, depreciation, amortisation and changes in financial instruments of between A$120 million and A$127 million.
Generation for the past six months totalled 1,070 GWh, 23 percent more than the year before and 6 percent ahead of long-term expectations. Australian output of 712 GWh was 20 percent higher than the year before and 4 percent more than long-term projections. New Zealand output came to 358 GWh, 29 percent more than a year earlier and 10 percent more than long-term expectations.
Tilt said the updated forecast assumes production for the remainder of the year will meet long-term assumptions. Forward power pricing for its small merchant exposure at Salt Creek and the Snowtown 1 project is consistent with current forward prices, it said.