Infigen swings back to profit

Wind and solar power company Infigen Energy has swung to a full-year profit on the back of higher electricity prices and the sale of its US business.

The company reported net profit of $4.5 million for the year to June 30, 2016, after a $303.6 million loss the previous year.

Profit from continuing operators was $7 million, up from a loss of $18.4 million in 2014-15, which managing director Miles George said was mostly due to higher prices for electricity and for large-scale renewable energy certificates (LGCs).

Mr George pointed to much higher forward wholesale prices in South Australia and New South Wales for 2016-17, which would benefit Infigen’s plants that operate on the merchant market rather than being tied into a power sales contract.

Futures prices in South Australia, where the market is more reliant on renewables and gas power since the closure of the last coal-fired station, stand at $110/MW/h for 2016-17, up 78 per cent from last year.

Infigen also sold its US wind power and solar development divisions last year for more than $US300 million, and has used the proceeds to pay down debt and invest in its Australian business.

A refinancing could cut Infigen’s interest rate on debt from about 7 per cent at present down to about 5 per cent and allow it to start paying dividends.

Infigen operates an installed capacity of about 557MW of renewable energy and holds a pipeline of more than 1000MW of projects with development approval.

The company revealed in May it was considering options including a full sale of the company after receiving approaches from companies in China and Europe.