20/02/2015 - 15:53

Pacific Energy downgrades outlook

20/02/2015 - 15:53

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Power generation company Pacific Energy has trimmed its full-year earnings guidance after reporting a lower than expected interim profit, but says a contract at the Tropicana gold mine will help it return to growth in 2016.

Pacific Energy downgrades outlook

Power generation company Pacific Energy has trimmed its full-year earnings guidance after reporting a lower than expected interim profit, but says a contract at the Tropicana gold mine will help it return to growth in 2016.

Pacific Energy’s underlying earnings (adjusted EBITDA) were down 11 per cent to $15.4 million for the six months to December, which the company said was 10 per cent lower than expected.

Contributors to the weaker performance included rectification works on heat recovery equipment, reduced construction activity, and payment of contractual resignation costs to chief executive Adam Boyd.

On the back of this result, the company has cut its full-year EBITDA guidance by $1 million to a range of $32 million to $34 million.

The company’s net profit after tax was $5.3 million, down 23 per cent, while its revenue for the period was down 8 per cent to $23 million.

The company also announced today its subsidiary Kalgoorlie Power Systems had signed a contract with AngloGold Ashanti to replace the diesel-fuelled power station at the Tropicana gold mine with gas-fuelled equipment.

The two companies have been in discussions on the changeover since July last year.

KPS has been running the 44-megawatt power station since June 2013, when the mine was opened.

The gas conversion is due to be completed by July 2016.

The conversion of AngloGold’s Tropicana and nearby Sunrise Dam gold mine to gas has underpinned APA Group’s $140 million extension of the Eastern Goldfields gas pipeline.

A joint venture between Sydney-based AJ Lucas and French company Spiecapag won the major construction contract for the 292-kilometre extension.

Brisbane company Energy Developments, which operates a 21MW power station at Sunrise Dam, has been contracted to replace 2MW of diesel capacity and install 8MW of gas generation.

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