Analysis report of the Genesis Company

The company is involved in range of businesses in the energy sector like they are a generation business, retail business as well as have their interests in Kupe gas field and oil. It shows that company has a diversified profile in the energy business. They sell range of products such as LPG, natural gas as well as electricity with the help of their retail business. They are not only involved in generation of electricity, but they also trade natural gas and electricity with the support of their generation business. In Kupe Joint Venture, the owner of Kupe oil & gas field, their interest ratio is 46 percent. The company is from New Zealand, and they are one of the largest gas and electricity retailers in the country. For this purpose, they use their retail brands such as Genesis as well as Energy Online. They handle around 650,000 connections of customers all over the New Zealand. The range of customers include industrial, commercial as well as residential. The company is involved in renewable generation and thermal generation across different plants in New Zealand. The company has one big thermal generation power station, whereas the number of renewable generation power stations is eight. In the wholesale market, they are generating electricity at the best lowest costs, so they have interest in Kupe oil & gas field (Genesis, 2019a)

The range of products for the company is vast as they provide electricity, natural gas as well as bottled gas for residential and business customers, whereas solar product is only provided to residential customers. The company also provides energy solutions not only for small and medium businesses, but also for large businesses, trade connection etc. They also provide services in rural areas for farmhouses, farmlands, and Ruralco. It shows the variety and range of their business in the energy sector, where they are one of the largest companies in New Zealand (Genesis, 2019b). So, these are some important facts related to company for its business in the sector of energy.

The Competition and Challenges in the Industry of new Zealand

In energy sector of New Zealand, the business has got more competitive than ever before. The more interesting part is that competition is not staying at any particular point; rather it is getting stiff and intense with the passage of time. It has been observed that there are more than forty retailers in this energy retail industry, and they are all competing to gain customer’s attention, attraction and loyalty. They are trying to find new ways to increase their customer base. The value for customers is the most important element of competition in this industry, that’s why Genesis is trying it’s hard to keep customers value on top priority. They are coming up with new solutions for customers so that things can move in right direction. To stay ahead in the competition, the company is introducing more services for their customers such as electricity insights for the monitoring of bottled gas and business, power shouts as well as Energy IQ app. The executive general manager for technology and digital, Ms Jennifer (Jen) Cherrington-Mowat has said that “Our insights and data have been designed to be both accessible and actionable for our customers – they shouldn’t need a PhD in mathematics to work out their energy bill. With Energy IQ, we wanted to deliver a product that truly adds value to our customers' lives and makes others say, “I want that”. That’s why Energy IQ is leaps and bounds ahead of the standard ‘one size fits all’ digital approach our competitors take.” It means that Energy IQ app is really helping Genesis to deal with intense competition, which is throwing various challenges in the industry (Genesis, 2018c). This is how Genesis can also deal with all future possible threats from its competitors.

The Analytical Thinking Tools of of the Genesis Company

It is important to look at some graphs and charts to show the results of the company in different aspects like how they are doing in terms of their market shares, what is their annual performance in terms of revenues and profits. The analysis will be based on analytical aspect so that a proper review of the company can be done.

Fig. 1: The Current Share Performance

Source: https://www.genesisenergy.co.nz/investors/share-performance

Fig. 2: Share Performance (Monthly Basis Graph)

Source: https://www.genesisenergy.co.nz/investors/share-performance

Fig. 3: The Income Statement

Source:https://gesakentico.blob.core.windows.net/sitecontent/genesis/media/new-library-(dec-2017)/about_us/investor/pdfs/2018/full%20year/ge-annual-report-29aug-2018.pdf

 Fig. 3: The Balance Sheet of of the Genesis Company

Source:https://gesakentico.blob.core.windows.net/sitecontent/genesis/media/new-library-(dec-2017)/about_us/investor/pdfs/2018/full%20year/ge-annual-report-29aug-2018.pdf

 Fig. 3: The Cash Flow Statement of of the Genesis Company

Source:https://gesakentico.blob.core.windows.net/sitecontent/genesis/media/new-library-(dec-2017)/about_us/investor/pdfs/2018/full%20year/ge-annual-report-29aug-2018.pdf

The Brief Summary of the Situational Analysis of the Genesis Company

Overview of of the Genesis Company

It is important to mention here that Genesis is owned by the New Zealand state for portfolio of electricity generation. The company started its operations in 1999. The company generates power from its renewable and thermal power stations, and it fulfills the needs of 19 percent out of 100 percent electricity supply across New Zealand. The company has stated its vision as “Our aim is to operate as a commercially-focused sustainable company providing responsible energy solutions to our customers”. It means they are striving to become best in the business. It is important to know with facts & figures that how company is performing, so their overall financial performance is reviewed in this section. It is important to mention that company got its first listing on New Zealand Stock Exchange in 2014 for its ordinary shares (NZX Limited, 2019a)

To understand the overall financial performance in different aspects, it is important analyze above mentioned statistics and figures one by one. First of all, the share performance will be analyzed. The data showed that current price for its share is $3.000 NZD, and it has been observed that it is the highest share price in last 52 weeks. However, it is considerable to know that last closed price of their share was $2.960 NZD, and the lowest share price in last 52 weeks was $2.137 NZD. These statistics are clearly showing that share price for the company is increasing with the passage of time. It is depicting good performance on New Zealand’s Exchange. The graph for share price performance also shows that share price is rising with each month. In months of Oct and Nov, the price went down a bit, but it started rising again from December and in last two months, the progress looks to be significant (Genesis, 2019d).

The next important stat to be analyzed is income statement closed for the year 2018. It shows that operating revenue for the company was $1,951.1m in year 2017, whereas it reached to $2,304.5m in year 2018; a clear rise in the revenue. The operating expenses also increased in 2018 as compared to 2017, but it was obvious as operating revenues are increasing at a good pace. It means that company is certainly good attention from customers as their operating revenue is increasing with the passage of time. The other most important figure to explain is the balance sheet, because it provides a comprehensive overview of a company’s financial performance. According to company’s balance sheet, the current assets of the company were $ 393.1m in 2018, whereas in 2017, the number was at $ 372.3 showing a considerable increase in its assets. The total assets for the company in 2018 were $ 4,235.0m in 2018, which is again bit higher as compared to year 2017. The total current liabilities in 2017 were $ 228.2m, whereas it extensively reached to $462.6m in 2018, and company must analyze that why current liabilities are going that high (Genesis, 2018c)

The total equity for the company in 2017 was $ 1,981.9 in 2017, which was recorded as $1,961.5m in 2018, which means that there was a bit decrease in total equity for the company. The other important financial document to review is cash flow statement. The operating cash flow in 2017 was $ 248.5m, which reached up to $ 330.6m 2018, and financing cash flow for year 2018 was $ 226.9m in 2018, and both of these cash flows were higher than year 2017. The net profit for the company in 2018 was $ 19.8m. The working capital movements observed at $5.1m in 2017, but there was significant increase in this in 2018 as it went up to $17.9m, way higher than the previous years. It is also important to mention here that net profit for the company was $20m in 2018 after tax. The total generation experienced 11% increase and Kupe gas production also observed an increase of 5%. These financial numbers are quite evident to show that company is going well in the energy sector and staying ahead in the competition, regardless of lots of challenges (Genesis, 2018c)

SWOT Analysis of the Genesis Company

It is always viable to do SWOT analysis to know more about some important relevant factors for the company.

Strengths of the Genesis Company:

The company has great range of products like covering different aspects of energy sector with products such as electricity, bottled gas, natural gas and solar energy.

·         It serves clients from all important segments of the industry such as commercial, residential corporate and business.

·         The company also reached rural area to serve customers of farmhouses, farmlands etc

·         The company is listed at New Zealand Stock Exchange with good share price

·         The company is owned as an important state enterprise

·         The company’s’ sustainability efforts are of high standards to protect environment and society

Weaknesses of the Genesis Company:

·         The company has to deal with range of businesses, which makes life difficult for the company to handle relevant processes

·         They need to expand their range and supply to meet demands on constant basis

Opportunities of the Genesis Company:

·         The company look for more innovations in its energy management and customer services

·         Genesis can reach every part of the country by expanding its number of power stations and plants across New Zealand

·         The company can look for more strategic options to expand their business even outside New Zealand

Threats of the Genesis Company:

·         The company is facing intense competition from other competitors as competition is intense than ever before

·         The environmental challenges are biggest threats like changing climate is a treat for thermal energy production

PEST Analysis of the Genesis Company

Political of the Genesis Company

The company have impacted by the risk of military invasion and the Bureaucracy involvement in the industry of Materials sector. The anti-trust law related with the material also likely to have an influence on the business of Genesis.

Economical of the Genesis Company

Stability & Exchange rates of the currency in the host country have an impact on the Genesis.  In order to effectively run the business the company also needed to work in the efficient financial markets and they may have the limited growth of the capital in the local markets.

Social of the Genesis Company

The culture of the country and the education level of the population also have an impact on the Genesis. It is also important for the company to understand that not all society encourage the entrepreneurship.

Technological of the Genesis Company

The technology have a lot of impact in the products that Genesis is offering. The genesis is also moving towards the technological development.

Porters Five Forces Analysis of the Genesis Company

Two major competitors of the company are Heilind, BJG Electronics, Rutronik, Electro Enterprises etc.

Conclusion on the Genesis Company

The overall business and situational analysis along with SWOT very much depicts that Genesis is doing well in so many ways. They have diversified their energy business portfolio by serving range of products to variety of customers. The company has been on the move in terms of its financial performance, and its share price on NZX is getting increased with the passage of time. The company is also focusing to stay ahead in the competition by serving its customers with variety of services such as Energy IQ app. It can be said that future for the company is bright if they look to continue this way.

 References of the Genesis Company

Genesis. (2019a). About Genesis. Retrieved March 24, 2019, from https://www.genesisenergy.co.nz/about-genesis

Genesis. (2018c). Annual Report 2018. Retrieved March 24, 2019, from https://gesakentico.blob.core.windows.net/sitecontent/genesis/media/new-library-(dec-2017)/about_us/investor/pdfs/2018/full%20year/ge-annual-report-29aug-2018.pdf

Genesis. (2019b). Genesis Homepage. Retrieved March 24, 2019, from https://www.genesisenergy.co.nz/

Genesis. (2019d). Share Performance. Retrieved March 24, 2019, from https://www.genesisenergy.co.nz/investors/share-performance

NZX Limited. (2019a). GNE Analysis. Retrieved March 24, 2019, from https://www.nzx.com/companies/GNE/analysis

Appendix

In the modern time human have made great development and in this development the energy and its related sources have played vital role. The Wheel is the invention that moves the human on the track of success whereas the engine that used the energy has sped up the humans progress. Subsequently, the energy sources producing countries and the companies that are dealing with the energy sources have played vital role in the development of human and have become an essential part. If a look is given on the following graph, it can be seen that the energy has been an ultimate part to support the economic development of a country because it helps to run the operations of the organizations such as mention in the following graph;

The graph shows that the energy sector still has great potential even in the time when companies are moving to find the other sources of energy. The Genesis Company of NewZealand also still have a great potential within the country as the energy demand has been increasing.

However, there are new trends in the business because it is exposed that in the last 25 years in NewZealand the gas emission has increased up to 25% that has drawn the attention of the legal bodies and other concerned authorities towards the disturbing situation of environment in the result of the destruction of natural environment. Following this, it is found that the government has been working on to reduce the carbon emission from all the industries by the way it is encouraging them to use the alternate sources of energy.

Policy related to Climate-Smart Education and Policy

The Genesis company provide its services for the benefits and demands of customers but also protect the environment by providing different policies and procedures. The Climate-smart policy is the project which prevailed for 18 months and the financial support for these initiatives provided by United Kingdom and then implemented through genesis company. The main focus of this project is based on two approaches that enhance the performance of Climate-Smart Agriculture and the focused approaches are education about the climate and policies regarding to climate which is important aspect of this project. Different trainings, manuals of agriculture that enhanced the education and performance of this project which then lead towards the excellent performance of project. In climate policy role of different government sectors and private during the implementation of these policies that protect the climate and also develop sustainable activities that maintain the climate which not crossing the limit as policies develop boundary according to activities of industrial sector.

The climate education is provided to aware about the role of climate which is affected by the anthropogenic activities which increase the temperature of climate and then different issues also faced. The education provided on the usage and activities of human beings as well as their role to protect the environment.

This education provides different frameworks that are implemented according to the activities of project which the company Genesis is involved. The manuals of Climate-Smart Agriculture education support this project not only in country but also across the country. It is supported by different aspects such as financial aspect, development and distribution respectively. This education provided policy regarding to competitive agriculture that are efficient enough to incorporate with the climate and in case of climate change. Moreover, the agriculture absorbs the effect of climate change.