Contact Energy’s FY25 Underlying EBITDAF Jumps 17% to NZD 774 Million

Strong Financial Performance Amid Market Challenges

Contact Energy Limited has delivered a solid financial performance for the year ended 30 June 2025, reporting an underlying net profit of NZD 261 million, a 13% increase from the previous year. Underlying EBITDAF rose 17% to NZD 774 million, reflecting the company’s successful geothermal expansion and effective risk management strategies in a market marked by historically low hydro inflows and tightening gas supplies.

The reported net profit of NZD 331 million includes a non-cash release of a NZD 98 million onerous contract provision related to the Ahuroa Gas Storage facility, which improved confidence in gas storage access and thermal flexibility value. Operating free cash flow increased slightly to NZD 434 million despite a reduction in stay-in-business and growth capital expenditure.

Strategic Acquisition and Renewable Growth

A key highlight of FY25 was the completion of Contact’s acquisition of Manawa Energy Limited on 11 July 2025. This acquisition brings 25 hydro schemes with approximately 500MW of capacity, enhancing Contact’s geographically diversified and resilient generation portfolio. The integration is underway, with expected cost synergies and portfolio benefits to be realized over the next 12 to 24 months.

Contact’s renewable generation capacity expanded with the commissioning of the Tauhara (174MW) and Te Huka 3 (51MW) geothermal plants, contributing 1.5TWh of baseload renewable energy. Construction is progressing on the Glenbrook-Ohurua 100MW battery energy storage system, the 168MWp Kōwhai Park solar farm, and the 101MW Te Mihi Stage 2 geothermal plant, further strengthening the company’s renewable pipeline.

Navigating Market Volatility and Fuel Constraints

The year was characterised by two significant dry periods that reduced hydro generation by 9% compared to FY24, the lowest since 2008. Gas production declined by over 20%, intensifying fuel scarcity. Contact secured additional short-term gas from Methanex and leveraged its flexible gas storage to support thermal generation during these dry spells, helping stabilise the market and support other participants through increased sales of Contracts for Difference.

Despite rising generation costs, particularly for gas and demand response, Contact’s diversified portfolio and strategic contracts enabled it to maintain strong earnings growth. The company also secured a new long-term electricity supply agreement with Fonterra, supporting industrial electrification efforts.

Customer Growth and Commitment to Decarbonisation

Contact’s retail connections grew to 646,000, with a focus on multi-product customers and flexible demand solutions. The company expanded its Time of Use ‘Good’ plans, benefiting 140,000 households with discounted off-peak energy, and enhanced its Energy Wellbeing programme to reduce disconnections.

Aligned with its commitment to net zero emissions by 2035, Contact plans to close its Taranaki Combined Cycle gas plant by the end of 2025, further decarbonising its generation portfolio. The company anticipates 98% renewable output from its combined portfolio in a mean year going forward.

Outlook and Future Priorities

Looking ahead, Contact will focus on integrating the Manawa business and commissioning new renewable assets, including the Glenbrook battery and Kōwhai Park solar farm, expected online in the second half of FY26. The company aims to continue delivering renewable projects and innovative supply arrangements to support New Zealand’s energy transition, while managing market volatility and fuel supply risks.