Mercury NZ Doubles Profit, Powers Ahead with $1 Billion Renewables Push
Mercury NZ Limited reported a 130% surge in net profit for HY2026, driven by strong renewable generation and disciplined cost management, while advancing major geothermal and wind projects on schedule.
- 130% increase in net profit to NZD 20 million
- 28% rise in EBITDAF to NZD 537 million
- Half of $540 million investment allocated to renewables development
- Interim dividend up 4% to 10 cents per share
- On track to add 3.5TWh of renewable generation by 2030
Robust Financial Performance Amid Renewable Expansion
Mercury NZ Limited has delivered a standout half-year performance for the six months ending December 2025, with net profit after tax soaring 130% to NZD 20 million despite a 5% dip in revenue to NZD 1.664 billion. This robust result was underpinned by a 28% increase in EBITDAF, reaching NZD 537 million, supported by above-average hydroelectric generation and ongoing productivity improvements.
The company’s disciplined approach to cost management and portfolio strength has clearly paid off, enabling it to maintain a strong balance sheet and prudent risk settings. This financial resilience provides Mercury with the flexibility to continue investing heavily in renewable energy assets while delivering sustainable returns to shareholders.
Major Renewable Projects Progressing on Time and Budget
Mercury is advancing a significant pipeline of renewable energy projects, with approximately half of its NZD 540 million investment in the half-year dedicated to new and existing generation assets. The newly commissioned fifth unit at the Ngā Tamariki Geothermal Station, a NZD 220 million expansion, began operations in January 2026 and is expected to add 390GWh annually; enough to power around 55,000 homes.
Meanwhile, construction continues on the Kaiwera Downs Stage 2 Wind Farm (NZD 486 million) and the Kaiwaikawe Wind Farm (NZD 287 million), both slated to start generating electricity in 2026 and 2027 respectively. Mercury has also lodged a substantive application for the Puke Kapo Hau Wind Farm, part of the Mahinerangi Wind Farm expansion, signaling its commitment to scaling up wind capacity.
Strategic Focus on Customer Support and Sector Confidence
Beyond generation, Mercury is actively supporting New Zealand’s energy transition through long-term contracts with major industrial customers such as Fonterra, Visy, and Whakatāne Mill, facilitating electrification and energy efficiency. The company’s smart hot water control programme is on track to manage 50,000 cylinders this winter, helping customers shift consumption and reduce costs.
Mercury is also engaging with industry stakeholders to address gas and firming challenges, improve market transparency, and support regulatory reforms aimed at accelerating renewable energy development. Internally, the company has strengthened its culture and executive incentives to align with its strategic ambitions.
Dividend and Outlook
The interim dividend was declared at 10 cents per share, a 4% increase on the prior period, with full-year guidance maintained at 25 cents per share. The Dividend Reinvestment Plan remains available, offering shareholders an opportunity to increase their holdings. Looking ahead, Mercury’s full-year EBITDAF guidance of NZD 1 billion remains on track, contingent on hydrological conditions and market factors.
Overall, Mercury NZ’s HY2026 results reflect a company confidently navigating the energy transition, balancing strong financial discipline with ambitious renewable growth plans that position it well for the decade ahead.
Bottom Line?
Mercury’s strong interim results and renewable investments set the stage for a transformative decade in New Zealand’s energy landscape.
Questions in the middle?
- How will Mercury manage hydrological variability risks impacting future earnings?
- What are the timelines and potential hurdles for the Puke Kapo Hau Wind Farm approval?
- How might evolving gas market dynamics affect Mercury’s firming and hedging strategies?
