Contact Energy (CEN) H2 2025 earnings summary

Executive summary

• Underlying EBITDAF rose 17% to NZD 774 million, surpassing guidance, driven by geothermal expansion, robust risk management, and the Manawa acquisition, which enhanced portfolio diversity and flexibility.

• Underlying NPAT increased 13% to NZD 261 million, with reported net profit at NZD 331 million, reflecting a 44% increase due to a non-cash AGS provision release.

• Completed Manawa acquisition in July 2025, adding 25 hydro schemes and 500MW capacity, accelerating progress toward a 98% renewable generation mix.

• Major renewable projects under construction or commissioned, including Tauhara, Te Huka 3, Glenbrook Battery, Kōwhai Park Solar, and Te Mihi Stage 2.

• Added to MSCI Global Standard Index and maintained Dow Jones Sustainability Index representation.

Financial highlights

• Underlying EBITDAF increased by NZD 111 million year-over-year to NZD 774 million; reported EBITDAF was NZD 872 million, including a NZD 98 million AGS contract provision release.

• Underlying net profit rose by NZD 31 million (13%) to NZD 261 million; reported net profit was NZD 331 million, including a NZD 71 million non-cash gain.

• Operating free cash flow reached NZD 434 million, up 2%, with 94% reinvested in renewable growth projects and joint ventures.

• Dividend per share declared at NZD 0.39, with a target of NZD 0.40 for FY 2026 and a 2% DRP discount.

• Stay-in-business capex down 29% to NZD 110 million; growth capex at NZD 363 million.

Outlook and guidance

• FY 2026 normalized EBITDAF targeted at NZD 980 million, including NZD 810 million standalone, NZD 150 million from Manawa, and NZD 20 million in in-year benefits.

• Dividend expected to rise to 40cps in FY26 and 41–42cps in FY27, with payout ratio temporarily above 100% post-Manawa acquisition.

• Growth capex guidance for FY26 set at NZD 390–400 million, with SIB capex at NZD 175–190 million.

• Focus on integrating Manawa, delivering major projects (Glenbrook Battery, Kōwhai Park, Te Mihi 2A), and achieving cost and portfolio synergies.

• Targeting 98% renewable output in a mean year post-TCC closure and continued investment in new renewable projects.