Contact Energy’s 2025 Integrated Report reveals robust financial results driven by major renewable investments and the strategic acquisition of Manawa Energy, reinforcing its commitment to a net zero future by 2035.
- Completion of $2.5 billion Manawa Energy acquisition
- Record renewable generation with new geothermal and solar projects
- Net profit rises to $331 million; EBITDAF up 29% to $872 million
- Dividend increased 5% to 39 cents per share
- Commitment to net zero emissions by 2035 amid energy security challenges
Strong Financial Performance Amid Energy Transition
Contact Energy Limited has reported a strong financial year for 2025, underpinned by significant investments in renewable energy infrastructure and strategic growth initiatives. The company posted a net profit of $331 million, a substantial increase from the previous year, alongside an EBITDAF of $872 million, reflecting a 29% uplift. This financial strength supports Contact’s ongoing commitment to its Contact26 strategy, which focuses on growing demand, expanding renewable development, decarbonising its generation portfolio, and enhancing customer experiences.
Manawa Energy Acquisition Bolsters Hydro Portfolio
A highlight of the year was the completion of Contact’s $2.5 billion acquisition of Manawa Energy, a move that significantly expands Contact’s hydroelectric generation capacity and diversifies its renewable asset base. Manawa’s geographically complementary hydro assets in the North Island balance Contact’s South Island portfolio, enabling a more resilient and efficient energy supply. The acquisition also enhances Contact’s development pipeline to approximately 12 terawatt-hours, positioning the combined entity to better meet New Zealand’s growing electricity demand and contribute to lowering wholesale prices over the long term.
Renewable Projects Drive Growth and Decarbonisation
Contact’s renewable development pipeline remains robust, with key projects such as the Tauhara geothermal power station and Te Huka 3 geothermal plant fully operational, delivering a 34% increase in geothermal generation year-on-year. Construction is progressing on the Glenbrook-Ohurua 100MW grid-scale battery and the 168MWp Kōwhai Park solar farm, both expected to come online in 2026. Additionally, the Te Mihi Stage 2 geothermal plant is underway, slated for commissioning in 2027. These investments underscore Contact’s leadership in New Zealand’s energy transition and its ambition to achieve net zero emissions from generation by 2035.
Navigating Energy Security and Market Volatility
The year was marked by challenges including a 20% decline in domestic gas production and historically low hydro inflows, which led to volatility in wholesale electricity prices. In response, Contact extended the operational life of its Taranaki Combined Cycle (TCC) gas-fired plant through winter 2025 and secured additional gas supply contracts, including with Methanex, to support energy security. The company also joined other major generators in establishing a strategic energy reserve at Huntly Power Station to manage dry-year risks. These measures balance Contact’s decarbonisation goals with the imperative to maintain a reliable and affordable electricity supply.
Customer-Centric Innovation and Community Engagement
Contact continues to enhance customer experiences through innovative programmes such as Good Plans, which offer flexible pricing and free off-peak power to over 140,000 customers, and the EV Demand Flex pilot that optimises electric vehicle charging to reduce costs and grid pressure. The company’s commitment to energy wellbeing is further demonstrated by removing disconnection fees and increasing community presence to support vulnerable customers. Contact also maintains strong partnerships with key industrial customers like Fonterra, NZ Steel, and NZ Aluminium Smelter, facilitating their decarbonisation through long-term renewable energy agreements.
Governance, ESG Leadership, and Workforce Development
Contact’s governance framework remains robust, with a diverse and experienced Board overseeing strategic direction and risk management. The company’s ESG commitments are reflected in its sustained inclusion in the Dow Jones Sustainability Index Asia Pacific and ongoing efforts to strengthen procurement practices, promote pay equity, and foster a diverse and thriving workforce. Contact’s integrated reporting aligns with global standards, providing transparency on environmental, social, and governance performance.
Bottom Line?
As Contact integrates Manawa Energy and advances its renewable projects, investors will watch closely how the company balances decarbonisation with energy security in a volatile market.
Questions in the middle?
- How will the integration of Manawa Energy impact Contact’s operational efficiency and cost synergies?
- What are the potential regulatory hurdles that could affect the commissioning timelines of Contact’s renewable projects?
- How will Contact manage the transition away from thermal generation while ensuring energy affordability and reliability?