Contact Energy (CEN) H2 2025 earnings summary

Executive summary

• Underlying EBITDAF rose to NZD 774 million, up 17%, surpassing guidance and driven by geothermal expansion, risk management, and robust operational execution.

• Completed Manawa acquisition in July 2025, enhancing portfolio diversification, flexibility, and accelerating progress toward a 98% renewable generation mix.

• Commissioned Tauhara and Te Huka 3 geothermal plants, with major renewable projects under construction totaling $1.1b.

• Secured major long-term contracts, including with New Zealand Steel and Fonterra, and expanded mass market offerings to over 140,000 households.

• 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 $872m, including a $98m AGS contract provision release.

• Underlying net profit rose by NZD 31 million (13%) to $261m, with underlying profit per share up 12% to 32.7c.

• 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 41–42cps for FY27, reflecting a 3–5% increase.

• Net debt to EBITDAF at 2.3x, supported by new green capital bond and AMTN note issuances.

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.

• Operating costs expected at NZD 400–410 million, with SIB CapEx guided at NZD 175–190 million and growth capex at $390–400m.

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

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

• Anticipated continued growth in demand, especially from industrial conversions and data centers.