Genesis Energy sees growth in electricity retailing as customer numbers stabilise

See also: Genesis' departing CEO says he's leaving his successor maximum flexibility

Genesis Energy [NZX: GNE] says it has seen growth in electricity sales in the first three months of the new financial year after New Zealand's biggest electricity and gas retailer halted a slide in customers in the face of "aggressive" competition.

The company's total customers rose 0.1 percent to 652,523 in the three months ended Sept. 30, from a year earlier. Electricity customers rose 0.3 percent to 521,035 and gas customers fell 2.3 percent to 107,034. Compared with the June 30 year-end, Genesis added 4,000 electricity customers and 770 gas accounts. In the 2015 financial year, electricity customers fell 1 percent, an improvement  on 2014's 4 percent decline.

Chief executive Albert Brantley, who is to leave the company in the current year, told shareholders at their annual meeting in Wellington today that competition in electricity and gas retailing is expected to continue in the face of smaller niche retailers and rivals "aggressively acquiring customers" with bundled offerings of services. Genesis managed to stabilise customer numbers in the fourth quarter via service improvements rather than discounting that would have eroded margins, he said.

"The first three months of the current financial year have seen a continuance of the turnaround, with growth in both our electricity brands," Mr Brantley said.

Genesis has 26% of New Zealand's electricity retailing market and has also maintained its leading market share of 40% of the gas market, even in the face of a decline in customers.

"As with electricity, the gas market continues to be competitive with new market entrants, and bundling of products driving increased rates of switching," he said. The company had responded with an offer for customers to pay under a selection of capped usage amounts, smoothing their monthly payments.

The company affirmed its guidance for earnings growth to stall in 2016. Earnings before interest, tax, depreciation, amortisation and changes to financial instruments would be in line with last year's $345 million, although the company expects to lift its total dividends for the year. Genesis expects to publish its report for the first quarter later this week.

Directors up for re-election at today's meeting included chairwoman Jenny Shipley.

Genesis shares rose 0.5% to $1.85 and have fallen about 6% in the past 12 months while the NZX 50 Index rose 13%.

(BusinessDesk)