NZ windfarms blowout

The Herald reports a gigantic increased loss for NZ Windfarms Ltd.

They lost over 700% more money last June year than the year before – $25 million down the gurgler. The directors say the share price dropped 6.3% in the last 12 months, down to just 15 cents each, and the value of their assets fell to $74.6 million at June 30, from $99.2 million a year ago.

Power generation was 25 per cent below budget and the company had “a very poor wind year,” yet sales rose to $9.76 million from about $4.1 million, total electricity generated rose 37 per cent to 114,498 Megawatts [it’s very likely this should read megawatt hours (MWh) or they’ve been generating the equivalent of 114 Huntlys – h/t Richard C] and electricity revenue jumped 156 per cent to $8.25 million, reflecting the first full year that the full complement of 97 turbines were operating.

“The financial position of WTL remains a concern to directors,” NZ Windfarms said today.

A major setback was an impairment charge of $30.7 million against assets. According to Investopedia an impairment charge reduces assets, often to write off worthless goodwill.

Most significantly, the directors confess that, since “early this year” they’ve been trying to sell the company. It’s also developing a new business model to reflect its position “as a single wind farm operator,” not, as originally hoped, a “developer of wind farms.”

Oh dear! Even in Kiwiland, sitting as it is smack in the middle of the Roaring Forties, wind power is not the easy cure for our “addiction” to hydrocarbons that a lot of shiny-eyed people promised us.

Because even if wind power is very expensive, it still might work – but it’ll never work if the operators don’t make a profit.

– h/t Terry Dunleavy

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