EBITDAF Guidance

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Based on our forecasts for FY24, we estimate our EBITDAF to be in the range of $3.0m - $4.5m. Link to NZX announcement - 29 August 2023.

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The Board reaffirmed FY24 EBITDAF guidance at the 2023 AGM.

The FY24 EBITDAF guidance range is based on an annual production level of 106 GWh, which is a higher confidence estimate based on a blend of annual averages and an independent determination of P75 Annual Energy Production (AEP). This is more conservative than the P50 AEP of 116.2GWh (91 x WF500 turbines) adopted for impairment testing purposes (refer to note 15 of the audited financial statements for the basis of this input). Shareholders can monitor actual unaudited financial year to date production data on the company’s website www.nzwindfarms.co.nz

The Company’s Electricity Price Hedging Policy provides the flexibility to hedge between a minimum hedge level and 100%, for the next 24 months, enabling a more proactive approach to managing electricity price risk. The Company’s estimated operating expenditure and principal and interest payments will determine the minimum hedge ratio to apply.

The Company is 67% hedged for FY2024 and 41% hedged for FY2025. We will progressively move to fill out the balance of the 24-month ahead period as market conditions allow.

The net electricity price for FY2024 is estimated at $92.50 per MWh. This is a blended price of VVFPA prices and estimated electricity spot prices based on ASX futures prices and adjusted for location and intermittency factors and weighted by monthly production estimates and hedge ratios.

Short term forward electricity prices reflect the relatively full hydro lake levels at present. Medium to long term forward electricity prices have remained elevated likely as a result of higher inputs into thermal generation and market pricing indicating the likelihood of Tiwai point aluminium smelter operations continuing beyond the current electricity contract end date.

EBITDAF guidance is provided on the basis of information available at this time, and may be subject to variations, including climatic and other conditions outside the Company’s control. Forward electricity generation is based on a mix of recent annual averages and an independent expert’s determination of P75 generation adjusted for relevant factors. However, wind generation is inherently variable from one year to the next.