Manawa Energy (MNW) H1 2025 earnings summary

Executive summary

• H1 FY25 results were significantly impacted by unprecedented market conditions, including record-high wholesale prices, low hydro inflows, calm wind, fuel scarcity, and a major customer default, resulting in a 44% drop in reported EBITDAF and a net loss after tax of $3.3M.

• Major drivers of underperformance included volatile wholesale prices, low hydro inflows, calm wind conditions, and a significant bad debt provision due to a retailer default.

• Asset refurbishment and development programs progressed well, with key projects enhancing reliability, restoring capacity, and improving operational performance across several schemes.

• Manawa entered into a Scheme Implementation Agreement for acquisition by Contact Energy, valuing the company at NZD 5.95 per share, with a 47.4% premium to the 30-day VWAP, subject to regulatory and shareholder approvals.

• Zero reportable health and safety incidents and historic lows in lost energy from unplanned outages were achieved.

Financial highlights

• Normalized EBITDAF for H1 FY25 was $45.7M, down 41% year-over-year; reported EBITDAF was $43.6M, down 44%.

• Net loss after tax was $3.3M, compared to a $55.9M profit in H1 FY24, impacted by a $23M non-cash fair value loss on financial instruments.

• Underlying earnings after tax fell 60% to $15.5M; underlying EPS dropped to 4.4 cps.

• Generation volume was 922 GWh, down 17% year-over-year and below long-run averages due to low inflows and calm wind.

• Interim dividend declared at 4.0 cps, halved from the prior period; capital expenditure was $25.9M, 18% lower year-over-year.

Outlook and guidance

• FY25 normalized EBITDAF guidance reaffirmed at $95M–$115M, based on 1,750 GWh hydro generation, current ASX forward pricing, and no material adverse events.

• Capital expenditure guidance for FY25 remains at $40M–$50M, excluding capitalized interest.

• Development OPEX expected to be $6.5M for the year; $4.0M capital expenditure planned for new development pipeline.

• Full-year result will depend on Q4 trading, storage levels, and market prices, with some ability to influence outcomes due to replenished storages.

• Additional hedging at elevated prices will impact H2 FY25 results.