Infigen Energy Ltd (ASX: IFN)

Trading on volatility: After rising quite a bit (over 4%) on January 19, 2018, Infigen Energy’s (ASX: IFN) stock edged down on January 22, 2018. The group is an independent power and renewable electricity producing company based in Australia. It is expected that IFN’s earnings might be in teens in the upcoming years which indicates a good growth path. It is a developer, owner and an operator of generation assets which will deliver energy solutions to the Australian businesses and to large retailers. It sells the electricity and Large-scale Generation Certificates through a combination of medium and long-term contracts and through the spot market. IFN is planning to diversify and expand its customer base and, so it will grow its generation portfolio in response to strong price and by some positive investment signals. It is planning to expand in New South Wales and also planning to enter into the Victoria and Queensland regions of the National Electricity Market. It will do this by selling electricity, LGCs and by constructing assets in the regions which are in the pipeline for development.
 

December 2017 Production Summary (Source: Company Reports)
 
As far as its financial performance is concerned, FY17 underlying EBIDTA was $139.3 million which was up by 16% as compared to prior year. Its Net Debt had substantially reduced and not only due to strong cash flows but also due to equity raising. It also commenced construction of Bodangora wind farm in New South Sales. As it accelerated the development of 113 MW of its wind farm at Bodangora, the group managed the project to progress in accordance with the construction Program. This strengthened its Revised Business Strategy and delivered a good value to its security holder through its production and sale of energy over the long term. So far as FY18 is concerned, the performance is tracking well, and it expects that its portfolio-wide bundled price for FY18 after factoring the net hedge cost will be in the range of $133-139/MWh. The half year results are expected in February 2018. Meanwhile, it is important to note that the group has now reduced its corporate costs by $1.5 million from the FY17 level. IFN is also broadening its internal capacity while the performance of its assets is dependent on the plant to generate during periods of at higher prices. To manage the scenario, the group has re-contracted its portfolio of 6 operating assets to Vestas to the 20-year point in the service life. While the stock trades on some bit of volatility, we maintain a “Buy” at the current market price of $0.675, given the potential indicated for near and medium term.
 

Sales and Production (Source: Company Reports)

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