The Contact Energy Limited (ASX: CEN) share price has burst from the blocks in early trade after its latest monthly operating report. Today’s early gains follow a 7.3% share price gain yesterday as investors pile into the Kiwi energy share.
Why is the Contact Energy share price up 10% today?
Shares in the New Zealand electricity generator and retailer jumped 9.7% higher at market open following the update. Contact released its December 2020 monthly report with key updates from across the business.
In the Customer business, Contact recorded mass market electricity and gas sales of 286 gigawatt hours (GWh), down from 303 GWh in December 2019. The Customer average electricity sales price climbed 2.8% to $256.13/MWh.
Mass market electricity and gas netback totalled $98.67 per megawatt hour (MWh), up from $89.89/MWh in December 2019. Netback is an approximate measure of gross profit per unit, incorporating sales price less cost of delivery.
Contact’s Wholesale business recorded contracted electricity sales of 582GWh, down from 639GWh last year. Electricity and steam net revenue climbed to $70.29/GWh, up from $69.64 in December 2019, with electricity generated (or acquired) of 617GWh, up from 691GWh last year.
The Contact Energy share price is rocketing higher following the update which showed higher than expected wholesale electricity pricing in December. New Zealand national electricity demand was down 0.9% on December 2019 numbers with lower nationwide temperatures a contributing factor.
Geothermal generation climbed from 276GWh in December 2019 to 285GWh, while hydro and thermal output both fell lower. Hydro generation fell 22.9% to 266GWh with thermal generation falling 38.6% to 27GWh.
The Contact Energy share price has rocketed higher this morning despite the broader market starting slowly. The benchmark S&P/ASX 200 Index (ASX: XJO) has edged 0.1% lower in early trade but energy stocks continue to climb.
Today’s gains follow a good day of trade for the Kiwi energy share in yesterday’s trade. The Contact Energy share price surged 7.3% higher with strong inflows from offshore exchange traded funds (ETFs) into New Zealand clean energy shares driving high demand.
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Returns as of 6th October 2020
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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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