Transfield Worley Power Services won a $20 million annual maintenance contract with Genesis Energy [NZX: GNE], New Zealand's largest power retailer, which is trying to cut costs by 10 percent.
The contract bundles together 80 separate outsource maintance services for its Huntly, Waikaremoana, Tongariro and Tekapo energy generation sites, the government-controlled Genesis said in a statement. The contract will deliver an immediate saving of 10 percent in Genesis's operating costs, which were $1.7 billion in the year ended June 30, it said.
At its annual results announcement in August, Genesis said electricity and gas retail markets were a "challenging environment". It has 26.1 percent of the retail electricity market and 43.7 percent of the gas market. Total electricity customers fell 4 percent to 523,278 in 2014, which the company attributed to increased competition from smaller retailers taking advantage of lower wholesale electricity prices and "bundled offerings from established competitors."
Transfield Worley, the local unit of the Australian utility services group, will manage general and specialist maintenance and outage work across the company's hydro and thermal power stations as well as security, waste disposal and grounds maintenance, Genesis said.
Shares of Genesis fell 0.3 percent to $1.905 and have gained some 23 percent since listing on the NZX in April. The stock is rated a 'buy' based on the consensus of six analysts surveyed by Reuters, with a median price target of $2.10.
(BusinessDesk)
Suze Metherell
Wed, 15 Oct 2014
Wed, 15 Oct 2014
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Transfield Worley wins $20m annual contract with Genesis Energy
42279