Reporting Season: Zenith reports 'outstanding' annual results

By Trevor Hoey. Published at Aug 6, 2018, in Features

Name: Zenith Energy Ltd (ASX:ZEN)

Market Cap: $94 million

Last Closing Share Price: $1.19

Leading independent power producer, Zenith Energy Ltd (ASX:ZEN) has generated a Net Profit After Tax (NPAT) of $8.47 million for fiscal 2018 from revenues of $51.4 million, up 64 percent on fiscal 2017.

The result could be well received as it significantly outperformed the FY18 earnings forecast of $3.52 million contained in the prospectus, and it also represented year-on-year growth of 171 percent.

The net profit represents earnings per share of 8.65 cents placing the company on a PE multiple of 13.7 compared with the sector average of 21.8.

Zen's overall performance has been impressive

The outperformance has been driven by continued contract wins and an expansion of its power generation capacity.

Managing Director, Hamish Moffat, said “The outstanding results are testament to the company’s successful delivery of innovative, reliable and cost-effective power generation solutions for its clients.”

However it is an early stage of this company’s development and if considering this stock for your portfolio you should take all public information into account and seek professional financial advice.

More than doubles contracted capacity

Zenith’s growing number of contracts has led to it more than doubling its build, own, operate contracted capacity from 88 megawatts when it listed on the ASX to 189 megawatts in August 2018.

Zenith currently has 12 contracts in place representing 420MW of generation capacity under control and a robust pipeline of remote power generation opportunities.

Significant new contracts secured over the last 12 months include the Tanami Gold Mine for Newmont Mining Corporation, the Dalgaranga project is one for Gascoyne Resources, and the Mt Morgans Gold Project for Dacian Gold.

Balance sheet and outlook strong

Zenith enters 2019 with a strong balance sheet, as well as the prospect of new contracts and extensions from existing clients.

The company announced last week that its wholly-owned subsidiary, Zenith Pacific (BWI) Pty Ltd, had executed a PPA to supply electricity and build, own, operate, maintain and upgrade equipment for a power station at the WA Oil Operations on Barrow Island.

While the company didn’t provide earnings guidance for 2019, management said that it was aiming to convert a significant proportion of its current 380 megawatt pipeline to contracted capacity, as well as exploring early opportunities in renewable power, smart grid and storage.


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S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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