Infigen Energy (ASX: IFN)

Infigen Energy (ASX: IFN) has lately published its September 2018 production report which is still unaudited. The company has 7 wind farms one in WA named Alinta. In terms of monthly numbers, Alinta shows variance in the production of 12% as compared to its last financial year, i.e., FY18. This year (FY19), Alinta’s production was 24 GWh which was only 22GWh last year for the month of September. The Bodangora unit, Capital farm, and Woodlawn farm in NSW produced 6 GWh , 30 GWh and 12 GWh, respectively. Apart from Bodangora farm, the other farms in NSW i.e. Capital and Woodlawn produced only 30 GWh and 12 GWh this year which was much below the previous year’s figures of 54 GWh and 22G GWh production of electricity respectively. As a result there was a negative variance of the two units Capital and Woodlawn of -45% and -43% respectively. The units Lake Bonney 1, 2 and 3 located in SA also showed negative variance in the production of electricity. For the three units Bonney 1, 2 and 3 this year, the production was 17GWh , 36GWh and 10GWh respectively compared to 28 GWh, 52 GWh and 13GWh last year. The total production through all units of IFN was 135 GWh this year which was 190 GWh last year.

The total YTD production report for all the 7 units was 487 GWh this year for September month, which was near the previous FY production of 500 GWh with a variance of -3%.

Losses in the revenue is subjected to marginal loss and is annually fixed by Energy market operators in Australia who fixes these losses on account for losses in network.

Performance return shows that in one year the stock dipped down by 23.33% while it was up 124 % in 5 years. Since its inception, the company has shown negative performance. As per the financial results for year ended 30 June 2018 summary of performances is as follows. The net profit after tax increased to $45.7 million which was up $ 13.4 million from the previous year. Production also increased by 4% (1,549 GWh) due to availability of higher wind resources at Woodlawn wind farm (WF), Capital WF and Lake Bonney WF.

Production increased as a result of high production sold and maintenance of electricity price in SA and NSW with slightly high price. Underlying EBITDA also increased as a result of higher production level, increased electricity prices in NSW and Infigen maintained its price although there was a decline in wholesale pricing. Net profit after tax was $45.7 million (increased by 41% compared to previous corresponding period). Net operating cash flow also increased by 2% as per previous corresponding period. Corporate debt got  decreased by $138 million while corporate cost got decreased due to business structure and corporate stability.

We have a “Hold” on the stock at the current price of A$ 0.555 (with market cap of A$ 545.24 million and PE ratio of 11.88x). The Bollinger band is getting narrowed showing a decent momentum. The moving average convergence divergence line is above the signal line indicating prices to gain momentum with better macro environment taking shape.
 

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