Aug 3 (Reuters) - 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
"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 Infigens 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,"
In the statement ahead of detailed 2020 fiscal year earnings
due on Aug. 20, Infigen said it expected to book non-cash losses
of A$15 million to A$20 million on its contracted assets as well
as non-cash losses of A$17 million to A$19 million resulting
from interest rate swaps on loans.
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 ($637.94 million). Fellow
suitor has held its offer at A$0.86 per share.
($1 = 1.4002 Australian dollars)
(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Jacqueline Wong and Jane Wardell)