Infigen Share Price Falls 43%

2017 was a tough year for Infigen Energy Ltd [ASX:IFN], with its share price falling 43% from $1.00 at the end of February, to $0.57 last week.

Infigen is a developer, owner and operator of energy generation assets which supply to Australian businesses and large retailers.  The company generates revenue through electricity sales, selling LGCs, and the construction of assets.

In recent times, the company has set forth a new strategy to grow its generation portfolio in response to strong price and investment signals.

Their chart isn’t a pretty one. The $640 million renewables company has bucked the trend on its financial year earnings report (FY18) released today, posting a 25% increase on net profit after tax.

Infigen’s share price is up 11.57% at time of writing, at a price of $0.68.

The company highlighted a 49% increase in operating cash flow. Primarily due to lower financing costs and the timing of a large-scale generation certificate (essentially a form of energy currency renewable power stations are entitled to create based on electricity produced above a baseline) settlement.

What changed for Infigen?

A stronger overall operating result saw Infigen’s annual net profit after tax increase 25% to $26.7 million.

The company saw lower wind energy production, offset by improved turbine and network availability. This resulted in a small production decrease of 4% on the prior corresponding period.

Revenue increased 2%, with higher electricity prices cited as the cause, but was offset by a lower production sold.

Managing Director Ross Rolfe stated:

Infigen has achieved solid first half results… We now have a diversified sales portfolio that should deliver greater stability into our revenue streams in line with our five year targets for a balanced portfolio.’

Outlook for Infigen

Infigen looks forward to completing the construction of the Bodangora Wind Farm, and affirms it is on track to commence operations in Q1 FY19.

The period from January to June is historically associated with a lower energy production than the second half of the year, but ultimately wind conditions are uncertain.

The electricity spot marketplace has been volatile in recent times, but Infigen has assured investors fundamentals remain strong.

The company expects spot prices in H2 FY18 to remain in line with the first half of the financial year, and for the strong LGC prices to be maintained throughout.

Regards,

Ryan Dinse,                                       

Editor, Money Morning 

and

Jack Cameron,           

Junior Analyst, Money Morning

PS: We’re all looking for steady growth opportunities to take us through 2018, and the recent market dip has proven to be a great chance to invest. That’s why Kris Sayce has written a new report titled ‘Three Best Investments in Australia for 2018 and beyond’.  To check it out, click here.


Ryan Dinse is a contributer at Money Morning. He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur. With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle. Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.  


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