Contact Energy (CEN) H1 2025 earnings summary

Executive summary

• Commissioned Tauhara (174 MW) and Te Huka 3 geothermal plants, advancing major renewables and battery projects, and progressing the Manawa Energy acquisition.

• EBITDAF rose 12% year-over-year to NZD 404m, driven by new geothermal generation and improved pricing, while net profit declined 7% to NZD 142m due to higher costs and Manawa transaction expenses.

• Retail and telco arms grew, with new products and increased connections, but retail margins were pressured by rising costs.

• Strategic focus on decarbonization, security of supply, and a robust renewable pipeline including solar, wind, and battery storage.

• Interim dividend increased 14% to 16cps, reflecting strong cash returns and confidence in outlook.

Financial highlights

• Underlying EBITDAF for H1 2025 was NZD 404m, up 12% year-over-year; underlying net profit after tax was NZD 142m, down 7%.

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

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

• Dividend for FY25 targeted at 39cps, with interim dividend of 16cps declared.

• Growth CapEx at NZD 179m, focused on renewables and battery storage.

Outlook and guidance

• FY25 normalized EBITDAF guidance raised to $790m, excluding Manawa costs; ordinary dividend target of 39cps.

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

• Net debt/EBITDAF expected to remain below 3.0x, supporting BBB credit rating.

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

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