Genesis Energy Ltd.

The stable outlook on Genesis Energy reflects our expectations that the company will continue to generate sizable positive free cash flow and maintain a ratio of debt to EBITDA of less than 3.0x on a normalized basis over the next few years. We have not factored in the potential impact of the strategic review's outcome regarding the smelter operations. Any full-year impact is likely to occur in the year ending June 30, 2022. Genesis could be somewhat exposed if wholesale prices are depressed--a scenario that could be one of the factors that influence the company's dividend reinvestment plan (DRP) in the outer years. We could consider lowering the rating if debt to EBITDA were to remain more than 3.0x. This

...We expect Genesis Energy Ltd. to maintain its strong position as New Zealand's largest electricity and gas retailer. Genesis Energy benefits from its position as one of the four large vertically integrated players in New Zealand. The company has a generation share of about 16% and retail share of about 25% in the country. That said, retail competition continues to remain high, limiting prospects for increases in retail tariffs. Volatility in hydrology conditions and global commodity prices will continue to affect Genesis Energy's earnings. Genesis Energy is somewhat different from its local peers given its skew toward flexible thermal generation. Given that the country's generation capacity is more than 60% hydro based, Genesis Energy's profitability would improve under dry hydrology conditions, and remain depressed under wet conditions. Also, through its interest in the Kupe oilfield joint venture, Genesis Energy remains exposed to global oil prices, although it generally enters into rolling...

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