Contact Energy (CEN) H2 2024 earnings summary

Executive summary

• Net profit rose 85% year-over-year to NZD 235 million, with underlying profit at NZD 230–235 million and EBITDAF at NZD 663 million, up NZD 90 million year-over-year, driven by improved channel pricing and thermal efficiency despite lower hydro generation and one-off asset write-offs.

• EBITDAF increased 16% to NZD 675 million (underlying NZD 663 million), outperforming guidance, with operating free cash flow up 67% to NZD 470 million.

• Major capital investment of NZD 470 million, double net profit, reflecting deep execution of growth strategy and renewables build-out.

• Tauhara geothermal plant came online; Te Huka 3 on track for commissioning before year-end, with Glenbrook Battery and Kowhai Park solar projects under construction.

• Announced increased dividend to NZD 0.37 per share, up 6% year-over-year, with a 2% DRP discount.

Financial highlights

• Revenue from continuing operations grew 35% to NZD 2.86 billion compared to FY23.

• Underlying profit after tax up NZD 19 million year-over-year, adjusted for contract provisions; net profit of NZD 235 million, up from NZD 127 million in FY23.

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

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

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

Outlook and guidance

• FY 2025 mean hydro EBITDAF guidance at NZD 770 million, up NZD 170 million from normalized FY 2024, driven by Tauhara and Te Huka 3.

• FY 2025 dividend expected to rise to NZD 0.39 per share; interim dividend to increase by 2cps.

• CapEx guidance for FY 2025 at NZD 340 million, with growth CapEx of NZD 450–550 million.

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

• Electricity prices expected to rise 2–3%, excluding network/transmission increases.