Contact Energy (CEN) H1 2025 earnings summary

Executive summary

• EBITDAF rose 12% year-over-year to $404m, driven by new geothermal generation, improved contract pricing, and commissioning of Tauhara (174MW) and Te Huka 3 (51MW) geothermal stations.

• Net profit declined 7% to $142m, impacted by higher costs, market making, and fair value movements in unhedged electricity contracts.

• Major renewable projects advanced, including Glenbrook Battery, Kōwhai Park Solar, and Te Mihi Stage 2, with new long-term supply agreements signed.

• Retail and telco arms grew, with new products, increased connections, and expanded customer support initiatives.

• Preparing for Manawa Energy acquisition, with regulatory review ongoing and executive team changes underway.

Financial highlights

• Revenue for the six months ended 31 Dec 2024 was NZD 1,707m, up from NZD 1,306m year-over-year.

• EBITDAF increased to $404m, up 12% from $362m in 1H24; underlying EBITDAF up 21% year-over-year.

• Net profit fell to $142m, down 7% from $153m year-over-year; profit per share decreased 8% to 17.9c.

• Operating free cash flow was NZD 138m, down from NZD 174m year-over-year, with a cash conversion rate of 34%.

• Interim dividend of 16c per share declared, up 14% from 1H24.

Outlook and guidance

• FY25 normalized EBITDAF guidance raised to $790m, excluding Manawa costs.

• Ordinary dividend target for FY25 is 39cps, with interim payout at 41% of total.

• Growth capex for FY25 guided at $450m–$550m; SIB capex $120m–$130m.

• Focus on renewable build-out, regulatory engagement, and integration of Manawa.

• Retail tariffs to be reset in 2025 to reflect increased network costs.