Quarterly Operational Update

QUARTERLY OPERATIONAL UPDATE
Three months ended 31 March 2020
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE01
SALES PORTFOLIO REFLECTS
CONTINUED FOCUS ON
CUSTOMER VALUE
LWAP/GWAP DECREASES AS
ISLAND PRICE SEPARATION
REDUCES PURCHASE COSTS
HYDRO GENERATION FORECAST
DOWN 100GWh DUE TO
LOW INFLOWS
>> QUARTERLY HIGHLIGHTS
SALES FOCUS
MAINTAINED
PORTFOLIO
POSITIONING
3,800 GWh
>> COMMENTARY
MERCURY TRANSITIONS TO OPERATING UNDER LOCKDOWN; COVID-19 IMPACTS PROJECTWORKS, DEMAND
Mercury's robust business continuity planningenabled a smooth transition to operating under the COVID-19 lockdown. The safety
and wellbeing of our people continues to be a priority with almost all office-based staff now working from home. Work at the Turitea
Wind Farm and geothermal drilling is on hold pending the easing of restrictions. The lockdown is impacting electricity demand which
decreased by 15% in the two weeks from 26 March 2020 versus the same period last year.
HIGHSTORAGE POSITION ENABLES INCREASED HYDRO GENERATION DESPITE LOW INFLOWS
Mercury's highTaupo storage position at the start of the period enabled increased hydro generation despite significantly below-
average inflows. Hydro generation of 839GWh was 77GWh higher than the prior comparable period, despite Waikato catchment
inflows at the 2
nd
percentile
1
, with geothermal generation slightly lower at 658GWh in the quarter versus 660GWh in FY2019-Q3. Due
to low inflows over the quarter, Mercury's mid-point FY2020 hydro forecast has been reduced by 100GWh to 3,800GWh.
HIGH SOUTH ISLAND STORAGE MODERATES SPOT PRICES DESPITE HVDC OUTAGE; ISLAND PRICE SEPARATION WIDENS
Spot prices decreased compared to FY2019-Q3 as high national storage at the start of the quarter was supplemented by 93
rd
percentile
1
South Island inflows in February, maintaining national hydro storage well above average across the quarter and mitigating
the effect of HVDC and thermal fuel supply outages. Prices decreased from record highs in FY2019-Q3, going from $162/MWh at
Otahuhu and $145/MWh at Benmore to $82/MWh and $52/MWh respectively. Mercury's portfolio of North Island generation was
able to benefit from price separation between the North and South Islands (basis) resulting in the LWAP/GWAP ratio decreasing
favourably to 1.00 from 1.04 in the prior comparable period.
Futures prices decreased significantly in the quarter reflecting the impact of the COVID-19 lockdown with prices for FY2021
decreasing from $123/MWh to $96/MWh at Otahuhu and from $96/MWh to $79/MWh at Benmore. FY2022 futures also decreased
in the quarter by $2/MWh at Otahuhu (from $96/MWh to $94/MWh) and by $15/MWh (from $85/MWh to $70/MWh) at Benmore
with a significant increase in basis spread likely driven by the pending Rio Tinto review of continued operations at the Tiwai aluminium
smelter.
SALES PORTFOLIO PERFORMANCE REFLECTS CONTINUED FOCUS ON CUSTOMER VALUE
Mercury's continued focus on customer value resulted in the Commercial & Industrial average sales yield (including both physical and
financial sales) increasing by 12.7%, from $82/MWh in the same quarter in FY2019 to $92/MWh in the current quarter. Sales
volumes in the channel also increased by 82GWh from 657GWh in FY2019-Q3 to 739GWh in FY2020-Q3. Other CFD volumes and
yields were up reflecting increased trading activity.
The yield on Mass Market sales also increased by 2.8% from $125/MWh in FY2019-Q3 to $129/MWh in the most recent quarter.
Mercury's portfolio management strategy, which included the exit of Farm Source contracts, resulted in sales volumes in the Mass
Market channel decreasing by 77GWh from 679GWh in FY2019-Q3 to 602GWh in FY2020-Q3.
1
For quarters ended 31 March since 1927

353379
311335
4244
4748
VWAP
1
VolumeVWAP
1
VolumeVWAP
1
VolumeVWAP
1
Volume
(GWh)(GWh)(GWh)(GWh)
1,0111,0293,2523,348
2
6026792,1572,382
3
4093501,095966
4952158171
4
1,0591,0813,4113,519
5
8686512,5702,368
330307965894
6
5383441,6051,474
184188563600
1,4971,4224,9265,227
8397622,9823,210
7
6586601,9442,017
5
32446010141,125
6
32446010141,125
8
1.001.041.021.03
1
VWAP is volume weighted average energy-only price sold to customers after lines, metering and fees
2
Mass market includes residential segments and non time-of-use commercial customers
3
Fixed-price, variable-volume (FPVV) sales to time-of-use commercial customers
4
Excludes spot customer purchases
5
Excludes FTR and trading ASX positions (including positions held to maturity which were previously disclosed in CfD volumes)
6
7
8
Includes all physical and financial buys and sells except spot customer purchases
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE02
91.87146.92
95.95140.59
83.4294.13
83.4294.13
106.08144.76
112.68147.40
86.3681.70
98.61141.74
99.88144.55
110.42155.07
84.2779.13
80.8074.88
128.93126.31
92.0083.90
($/MWh)($/MWh)
116.49114.08
Nine months ended
31 March 2020
Nine months ended
31 March 2019
Includes Virtual Asset Swap volumes of 149 GWh for the 3 months ended 31 March 2020 and 148 GWh for the 3 months ended 31 March 2019 and of 451
GWh for the 9 months ended 31 March 2020 and 450 GWh for the 9 months ended 31 March 2019
ELECTRICITY CUSTOMERS
('000s ICPs)
ELECTRICITY SALES
North Island Customers
Commercial & Industrial
Network Losses
85.94
125.02
97.92
Physical116.15111.73
Mass Market128.54
76.84
95.18
Spot Customer Purchases
77.65
OPERATING INFORMATION
Three months ended
31 March 2020
Three months ended
31 March 2019
($/MWh)
Dual Fuel Customers
($/MWh)
South Island Customers
88.28170.71
91.2577.27
154.8378.10
84.83
Other Sell CfDs
77.94159.19
Physical Purchases
Financial
Spot Settlement of CfDs
End User CfDs
Spot Settlement of CfDs
PORTFOLIO LWAP/GWAP
153.3066.76
Geothermal (consolidated)
ELECTRICITY GENERATION
Physical
99.3184.18 Buy CfDs
76.80151.69
84.1899.31Financial
94.98168.82
160.8386.99
Hydro
>> OPERATING STATISTICS

> ELECTRICITY GENERATION BY COMPANY FOR THE THREE MONTHS ENDED 31 MARCH
Source: Electricity Authority
> SHARE OF ELECTRICITY SALES (GWh) FOR THE THREE MONTHS ENDED 31 MARCH (EXCLUDING CFDs)
Source: Mercury Purchases and Transpower SCADA
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE03
16%
36%
21%
17%
3%
7%
Financial Year Q3 2020
MERCURY
MERIDIAN ENERGY
CONTACT ENERGY
GENESIS ENERGY
TRUSTPOWER / TILT
OTHER
>> MARKET DATA
15%
34%
20%
18%
4%
9%
Financial Year Q3 2019
13%
87%
Financial Year Q3 2020
MERCURY
OTHER
13%
87%
Financial Year Q3 2019

> OTAHUHU WHOLESALE PRICE AND NATIONAL HYDRO STORAGE LEVELS
Source: NZX Hydro and NZEM Pricing Manager (NZX)
> TAUPO STORAGE
Source: NZX Hydro
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE04
$40
$60
$80
$100
$120
$140
$160
0
1,000
2,000
3,000
4,000
5,000
6,000
JulAugSepOctNovDecJanFebMarAprMayJun
$/MWh
GWh
AVERAGE NATIONAL STORAGEFY2019 NATIONAL STORAGE
FY2020 NATIONAL STORAGEROLLING 12 MONTH AVERAGE OTA PRICE
ROLLING 12 MONTH AVERAGE BEN PRICE
0
100
200
300
400
500
600
JulAugSepOctNovDecJanFebMarAprMayJun
GWh
AVERAGE SINCE 1999FY2019FY2020

> OTAHUHU ASX FUTURES SETTLEMENT PRICE
Source: ASX
> BENMORE ASX FUTURES SETTLEMENT PRICE
Source: ASX
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE05
$111.81
$92.54
$89.54
$139.10
$111.93
$102.79
$122.57
$110.25
$95.68
$96.08
$94.10
$93.85
$0
$20
$40
$60
$80
$100
$120
$140
$160
FY20FY21FY22
$/MWh
Financial Year
AS AT 31 MARCH 2019AS AT 30 SEPTEMBER 2019AS AT 31 DECEMBER 2019AS AT 31 MARCH 2020
$98.30
$83.13
$80.86
$121.22
$98.96
$91.80
$95.96
$97.29
$85.11
$79.06
$78.63
$70.05
$0
$20
$40
$60
$80
$100
$120
$140
FY20FY21FY22
$/MWh
Financial Year
AS AT 31 MARCH 2019AS AT 30 SEPTEMBER 2019AS AT 31 DECEMBER 2019AS AT 31 MARCH 2020

> NATIONAL CONSUMPTION (NON-TEMPERATURE ADJUSTED)
Source: Transpower Information Exchange
> AUCKLAND CLIMATE SUMMARY ( ⁰C)
FINANCIAL YEAR
Q1Q2Q3Q4
202012.316.719.5-
201912.116.320.214.1
201812.317.220.714.3
201712.116.119.314.3
201611.416.020.615.3
Historical Average (since 1999)11.916.119.414.2
Source: Met Service
> MONTHLY TOTAL CONSUMER RETAIL SWITCHING (ICPs)
Source: Electricity Authority
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE06
8,233
8,240
8,185
8,045
8,244
8,329
1,240
1,256
1,237
1,235
1,320
1,291
0
2,000
4,000
6,000
8,000
10,000
12,000
Q3 2015Q3 2016Q3 2017Q3 2018Q3 2019Q3 2020
GWh
NATIONAL CONSUMPTIONTIWAI POINT ALUMINIUM SMELTER CONSUMPTION
0%
5%
10%
15%
20%
25%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
% Churn
Monthly ICPs
NZ MARKET CHURN (LHS)ANNUAL NZ MARKET CHURN % (RHS)