Western Australian energy and gas supplier, Synergy, has released its 2019 Annual Report, citing a challenging energy landscape for a decline in revenue.
Synergy reported a net loss after tax of $656.9 million for the 2018-19 financial year, which includes a $428.9 million impairment on assets and a $152.4 million onerous contract provision.
The underlying operational loss of the business was $5.4 million.
The $428.9 million impairment is a result of the business facing increased fixed costs – predominantly due to generation operations, some long-term power purchase agreements and increased regulated network charges.
A decline in revenue of $139.6 million to $2.84 billion was reported for the year, a 4.7 per cent decrease on the 2017-18 financial year.
Synergy Chief Executive Officer, Jason Waters, said year-on-year the business continued to perform well, but the overall net loss after tax reflected the ongoing challenges of an increasingly complex electricity supply environment.
“A number of factors have negatively impacted Synergy’s financial performance, including increasing fixed costs, the rapid uptake of intermittent renewable energy, in particular rooftop solar PV, and milder than expected weather conditions affecting our baseload generation,” Mr Waters said.
“We have continued to deliver critical services in a stable manner while continuing our focus on the future.
“In accordance with Australian Accounting Standards, Synergy also took the necessary action of reporting an impairment loss which has been appropriately disclosed in the financial statements.
“The impairment can be attributed to changes in our generation operations, long-term power purchase agreements and regulated network charges that are no longer being offset by adequate levels of revenue available through the franchise, contestable and wholesale markets.”
However, Mr Waters said he was pleased with Synergy’s continued improvement in customer service, and its development of innovative new trials and products to help customers better manage their energy consumption.
He also highlighted a milestone in Synergy’s commitment to a renewable energy future, through the go-ahead for the Warradarge Wind Farm and the expansion of the Greenough River Solar Farm through the Bright Energy Investment vehicle.
“Both of these projects will help us in achieving our large-scale renewable energy target obligations, maintain control of system security and reliability, and create employment opportunities for the mid-west region of the state during the construction phases,” Mr Waters said.
Construction has already begun on both projects, with Warradarge Wind Farm expected to generate first power next year and provide the annual electricity needs of 135,000 homes.