Australia's Infigen forecasts 'materially lower' earnings

[BENGALURU] Australian takeover target Infigen Energy on Monday warned revenue and earnings would be "materially lower" in the current financial year as it grapples with a substantial drop in wholesale electricity prices due to the coronavirus crisis.

Infigen, which is the focus of a bidding war between Spanish utility firm Iberdrola and Philippine conglomerate Ayala Corp, also suspended the payment of dividends indefinitely.

"The effect of the economic crisis created by Covid-19 is expected to result in continuing low electricity prices resulting from lower overall demand and oversupply," Infigen said in a statement.

The wind and solar firm said that oversupply was being exacerbated by delays to generator maintenance because of coronavirus-spurred movement restrictions.

"The short-term effect ... is an expected reduction in the net revenue and net income of Infigen's renewable energy assets and fast-start, firming assets," the company said.

"Infigen believes that there will be a return to normal operating conditions once the Covid-19 pandemic is contained and that the inexorable exit of thermal generation will continue," it added.

Infigen said it continued to support Iberdrola's bid. The Spanish company last month raised its offer price to A$0.92 per share, or around A$893.1 million (S$880.80 million). Fellow suitor has held its offer at A$0.86 per share.

REUTERS