Revenue from Kupe declined 14%, from $50million to $43million, while energy revenue was down 7%, from $991million to $922million, for Genesis' half year to December.
Overall revenue declined 7% from $1.04billion to $965million, earnings before interest, tax, depreciation, amortisation and financial instruments (ebitdaf) was down 11% to $156million while reported after-tax profit rose by $1million, or 4%, to $37million.
Genesis also reset its full-year guidance of ebitdaf, downgrading by $10million from an expected range of $320million to $340million, to between $320million and $330million.
Genesis shares dipped to $2.10 following the announcement.
Genesis chief executive Marc England said higher margins in both mass market and time-of-use markets offset a decline in electricity sales due to warmer weather.
He said the wholesale market result included significant cost savings across generation, which partially offset adverse market conditions from suppressed spot electricity prices, combined with lower oil and methanol prices.
The Kupe field increased production by 11% on same period last year, but was undermined by ongoing oil price impacts.
Genesis bought the 15% Kupe field off New Zealand Oil & Gas for $168 million, increasing its stake to 46% in the joint venture.
Forsyth Barr broker Damian Foster said the $156million ebitdaf was ''disappointingly low''.
''There is no single reason why the result is worse than expected, although wholesale revenue is around $6million lower than expected and operating costs are also higher, particularly in the wholesale space.''
While the half-year result appeared to have positive and negative one-offs which need clarification, a ''significant positive'' to assist future profitability would be a reduction in operating costs, expected to be down around $6 million.
Craigs Investment Partners broker Peter McIntyre said the $156million ebitdaf was $14million below Craigs' forecast, noting that only $6million of this was explained by non-forecast impacts, being restructuring costs and deferred acquisition costs.
''The miss came on many fronts, with the energy [division] margin down 4% at $258million, while ebitdaf without Kupe was down 8% at $124million,'' Mr McIntyre said.
Mr Foster said normalised after-tax profit was only about $4million lower than forecast at $38million, lower depreciation, interest and tax expense ''all helping to reduce the size of the miss''.
One of the largest surprises in the result was Genesis leaving its interim dividend unchanged at 8.2c, given it had a progressive dividend policy
''So deciding not to increase the dividend at this point in time is, in our view, significant. That said, we don't believe the dividend is at risk,'' Mr Foster said.
Mr England said progress had been made on all three strategic themes: to improve short term returns, medium term growth and long term value creation.
Greater efficiency in the generation business had already led to lower operating costs, while new innovations, such as bulk lpg delivery systems, were being rolled out to customers.
He also noted Genesis was considering investing further into Kupe to enable longer term value creation.
Genesis bought New Zealand Oil & Gas's stake in the Kupe gas and oil field as part of a broader strategy to generate short-term revenue gains and ultimately lead to a more efficient business, BusinessDesk reported.
That acquisition is seen helping the company generate ebitdaf of between $320million and $330million in the year ending June 30, compared to a previous forecast of $305million to $325million.
At the time of the purchase, Genesis said it would add $15million to earnings.
''The company's transformation continues to accelerate and the business performed well against a backdrop of unfavourable market conditions, which have been well-signalled to the market,'' chairwoman Dame Jenny Shipley said.
