The Tauranga-based electricity producer announced production would be 9.4 per cent less than previously estimated, cutting operating earnings by around $8.5 million a year “in a year of average wind”.
It cut its valuation by as much as $70m.
The company, controlled by Infratil, said the revision was due to a number of factors associated with energy yield prediction which included limitations with modelling tools when applied to a site of such complexity and scale.
Trustpower’s shares fell 1.9 per cent to a four-week low of $7.60. Infratil stock declined 0.6 per cent to $3.15.
Snowtown is the second-largest wind generation facility in Australia with total installed capacity of 370 Megawatts, according to the Trustpower website.
It was built in two phases, 2008 and 2013, at a total cost of around $660m.
The output reassessment relates to the stage two development, which had been revalued upwards by $315m in the latest company accounts. The reassessment reduces expected annual generation from 985GWh per year from the stage two development to 892GWh.
“Trustpower expects that lower wind production at Snowtown Stage 2 would reduce 2017 financial year earnings before interest, tax, depreciation, amortisation and movements in the value of financial instruments by approximately $8.5 million in a year of average wind,” chief executive Vince Hawksworth said.
“Trustpower also expects a reduction in the valuation of the Snowtown Stage 2 generation assets of between $60 million to $70 million.”
The company noted in its 2015 annual report earlier this year that poor wind generation in the second half of the last financial year at its Snowtown and Tararua wind farms had affected financial performance.
AAP
