Contact Energy (CEN) H2 2024 earnings summary

Executive summary

• FY24 net profit rose 85% year-over-year to $235m, with underlying profit up 9% to $230m, driven by improved channel pricing, thermal efficiency, and new geothermal capacity, despite lower hydro generation and one-off asset write-offs.

• EBITDAF increased 16% to $675m (reported) or $663m (underlying), outperforming guidance, with operating free cash flow up 67% to $470m.

• Major capital investment of $470m, focused on renewables, matched operating free cash flow and doubled net profit.

• Tauhara geothermal plant came online in May 2024; Te Huka 3 on track for commissioning before year-end, adding over 200MW of new renewable capacity.

• Final dividend of 23cps declared, total FY24 dividend 37cps (up 6%), with a 2% DRP discount.

Financial highlights

• Revenue from continuing operations grew 35% to $2.86bn compared to FY23.

• Net profit of $235m (reported), up from $127m in FY23; underlying profit $230m, up 9%.

• EBITDAF (underlying) $663m, up 16% from $573m; reported EBITDAF $675m.

• Operating free cash flow $470m, up 67% from $282m; ROIC averaged 3.7%.

• Dividend payout $292m, 92% of four-year average operating free cash flow.

Outlook and guidance

• FY25 normalised and expected EBITDAF guided at $770m, a 28% increase year-over-year, driven by Tauhara and Te Huka 3 generation.

• Over 200MW of new geothermal capacity to be operational in the next 12 months.

• FY25 dividend expected to rise to 39cps; interim dividend to increase by 2cps.

• CapEx guidance for FY25: stay-in-business $115m–$125m; growth $450m–$550m.

• TCC gas plant closure expected December 2024; further renewable and storage projects to progress.