Tilt Renewables Limited

Overview of Recent Market Announcement: Tilt Renewables Limited (ASX: TLT) updated that energy production for the twelve months to 31 March 2019 was 2,054 GWh from its portfolio of eight operational wind farms. The production in the current year was 14% ahead of the previous year. The completion of Salt Creek Wind Farm and a return to more normal wind conditions, on average, across the year benefitted the production.


TLT Portfolio Production (Source: Company Reports)

The total March 2019 quarter production was at 465 GWh, almost in line with the previous corresponding period. The company’s net margin grew by 910 bps to 8.8% in 1H FY 2019 which reflects its improved capability to convert its top line into bottom line.

What To Expect From TLT: The company has an expectation for full year FY2019 EBITDAF to be around the bottom of the updated guidance range of AUD $134 to $138 million provided with the FY2019 interim results in October 2018. This is mainly due to lower production result in the Mar-19 quarter. The company expects the full year FY2019 EBITDAF to be at least 5% above the top of the original guidance range (A$120 to $127 million), presented at the start of the financial year and significantly above the EBITDAF result achieved in FY2018.

The company’s stock has witnessed a rise of 2.27% and 13.79% in the span of the previous one month and three months, respectively. The stock is trading slightly towards the 52-week higher level. Hence, we give an “Expensive” recommendation on the stock at the current market price of $2.200 per share (down 2.222% on 10 April 2019).  
 

Infigen Energy

Announcement of March 2019 Monthly Production: Infigen Energy (ASX: IFN) had announced the monthlyproduction for March 2019. The production generated from Owned Assets stood at 132 GWh as compared to 120 GWh in March 2018, an increase of 10%. The production sold from Owned Assets stood at 129 GWh in March 2019 as compared to 116 GWh in the previous corresponding period.


March 2019 Monthly Production (Source: Company Reports)

The underlying EBITDA increased $0.2 million YoY to $88.2 million in H1 FY19 primarily on higher revenue as well as lower operating costs. The net revenue increased to $119.2 million in the reported period as compared to $118.2 million in the prior corresponding period. The SA Battery and any other potential investments in firming solutions will strengthen Infigen’s ability to manage the costs of delivering firm supply to customers.Firming solutions allow Infigen to increase its contracted sales in a risk managed manner.

What to expect going forward: Infigen is positive about both FY19 and the future. The energy market is dynamic, and Infigen is responding to it with a strategy for the future that is capable of adapting to emerging market dynamics and conditions. In the short – medium term, Infigen’s contracted position will deliver reliable revenue outcomes.

With FY19 strong contracted positions for electricity and LGCs delivering increased revenue stability, Infigen’s business fundamentals looks decent.

Considering the above factors along with decent outlook and current trading level, we maintain our “Hold” recommendation on the stock at current market price of $0.435 per share (down 2.247% on 10 April 2019).
 

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