Windflow chief executive Geoff Henderson says his company should be in the black by June next year. Photo / Brett Phibbs
Windflow, New Zealand's only windfarm-turbine manufacturer, yesterday reported a $906,000 half-year loss - but expects to break into the black next year.
Founder and chief executive Geoff Henderson said the company's revenue, up almost 300 per cent to $2.25 million, was dominated by payments for the five turbines
it had supplied to New Zealand Windfarms' Te Rere Hau windfarm in Manawatu.
"That there's a net loss reflects the fact that being a small batch it was always going to be a loss leader."
In addition to production costs, he said, the company was still incurring significant research and development and engineering costs as it sought international certification for its innovative two-bladed turbines.
But NZ Windfarms' order for a further 14 turbines, placed early this year after the successful completion of a 45-day reliability run, was "an important stepping stone" for the company, Henderson said.
Under the agreement Windflow has with NZ Windfarms, in which it has a 28 per cent stake, the company will build a further 78 turbines for the windfarm by the end of 2008.
While the half-year net loss would make it difficult for the company to break even in the June 2007 year, it should be in the black by June 2008.
Henderson, who attended the New Zealand Wind Energy Association's conference in Wellington this week, said there was increasing excitement about the wind industry globally and in New Zealand.
"In general people are feeling very positive, as we are, but it would be nice to get clearer signals from the Government about the shape of the wholesale market and the cost of carbon so that we've all got certainty."
Windflow had built its business on the premise that a carbon charge in New Zealand might not happen.
The country is one of the few places where there is no value on greenhouse gases or renewable energy.
"We think we can make it but the business will go faster and we'll have more certainty and it will be easier to raise finance because investors will perceive less risk if there is a clear and consistent policy on greenhouse gas emissions that puts a price on them."
Windflow's NZAX listed shares closed steady at $3.12 yesterday.
