Quarterly Operational Update

QUARTERLY OPERATIONAL UPDATE
Three months ended 30 September 2020
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE01
FY2021 HYDRO GENERATION FORECAST
REDUCED DURING THE QUARTER DUE TO
CONTINUED LOW INFLOWS
RECORD Q1 OTAHUHU SPOT PRICES
AS NATIONAL HYDRO STORAGE
BELOW AVERAGE
FY2022 FUTURES PRICES LIFT
ON MARKET SPECULATION REGARDING
TIWAI CONTINUING OPERATIONS
>> QUARTERLY HIGHLIGHTS
3,700GWh
RECORD
SPOT
PRICES
FUTURES
PRICES
RECOVER
>> COMMENTARY
HYDRO GENERATION DOWN ON RECORD LOW 12-MONTH INFLOWS; GEOTHERMAL GENERATION STABLE
Mercury's hydro generation in the first quarter of FY2021 was 142GWh below average
1
, decreasing by 170GWh to 1,044GWh. This
reflected continued drought conditions with the Lake Taupo catchment experiencing the lowest 12-month inflow sequence to 30
September
2
on record. Mercury announced during the quarter that its FY2021 hydro generation forecast reduced by 200GWh to
3,700GWh, more than 300GWh below average. Geothermal generation was stable versus the prior comparable period.
LOW INFLOWS LIFT SPOT PRICES; FY2022 FUTURES INCREASE ON SPECULATION AROUND TIWAI SMELTER EXIT TIMING
Dry hydrological conditions affected both North and South Islands resulting in national hydro storage tracking more than 500GWh
below average until late September before lifting due to South Island rainfall, ending the quarter at 172GWh below average. This was
reflected in the average spot price for the quarter reaching a record of $136/MWh at Otahuhu
3
, increasing from $125/MWh in the
prior comparable period. The FY2021 futures price also reflected current dry hydrological conditions, increasing from $114/MWh at
Otahuhu and $104/MWh at Benmore at the start of the quarter to $122/MWh and $111/MWh respectively.
Longer-term futures prices increased during the quarter as the market appeared to speculate on the likelihood of the Tiwai smelter
operation being extended beyond August 2021. FY2022 futures prices ended the quarter at $100/MWh at Otahuhu and $85/MWh
at Benmore after falling as low as $69/MWh and $51/MWh respectively during the quarter.
FOCUS ON CUSTOMER VALUE SEES INCREASED SALES YIELDS
Mercury's continued focus on customer value saw the average Commercial & Industrial sales yield (including both physical and
financial sales) increase by 8.6%, from $88/MWh in the prior comparable period to $96/MWh, with sales volumes increasing by
130GWh.
The sales yield in the Mass Market segment increased by 6.6% to $137/MWh with volumes decreasing by 60GWh to 832GWh.
Customer connections decreased by 6,000 across the quarter to 342,000, 19,000 lower compared to the end of FY2020-Q1.
DEMAND LOWER DUE TO REDUCED INDUSTRIAL ACTIVITY
Demand decreased by 0.6% on a temperature-adjusted basis as industrial sector load (-1.2%) was affected by the shutdown of the
4
th
potline at the Tiwai Point aluminium smelter and reduced activity at the Marsden Point refinery. This was partially offset by
increased demand from the dairy sector (+0.4%) and irrigation (+0.1%) sectors. Demand from the urban (-0.1%), rural (+0.1%) and
other (+0.1%) sectors was flat.
1
For quarters ended 30 September since 1999
2
For 12-month periods ended 30 September since 1928
3
For quarters ended 30 September since 1991

342361
302319
4042
4647
VWAP
1
VolumeVWAP
1
Volume
(GWh)(GWh)
1,2571,240
2
832892
3
425348
6161
4
1,3181,301
5
843870
376323
6
467547
73198
1,7311,904
1,0441,214
7
687690
433299
6
433299
8
1.011.03
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
6
7
8
Includes all physical and financial buys and sells except spot customer purchases
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE02
96.88
128.80
103.19
Physical125.76119.87
Mass Market137.30
ELECTRICITY SALES
Commercial & Industrial
Network Losses
OPERATING INFORMATION
Three months ended
30 September 2020
Three months ended
30 September 2019
($/MWh)
Dual Fuel Customers
($/MWh)
South Island Customers
ELECTRICITY CUSTOMERS
('000s ICPs)
North Island Customers
78.87
87.57
Spot Customer Purchases
84.07
141.79129.20
87.5282.14
119.70130.63
87.45
Other Sell CfDs
146.06120.77
Physical Purchases
Financial
Spot Settlement of CfDs
End User CfDs
Geothermal (consolidated)
ELECTRICITY GENERATION
Physical
81.4397.48 Buy CfDs
126.95116.35
97.4881.43Financial
144.14127.00
123.15137.31
Hydro
Includes Mercury's 65% share of Nga Awa Purua generation
Includes Virtual Asset Swap volumes of 151 GWh for the 3 months ended 30 September 2020 and 151 GWh for the 3 months ended 30 September 2019
Spot Settlement of CfDs
PORTFOLIO LWAP/GWAP
116.36127.85
Excludes FTR and trading ASX positions (including positions held to maturity which were previously disclosed in CfD volumes)
>> OPERATING STATISTICS

> ELECTRICITY GENERATION BY COMPANY FOR THE THREE MONTHS ENDED 30 SEPTEMBER
Source: Electricity Authority
> SHARE OF ELECTRICITY SALES (GWh) FOR THE THREE MONTHS ENDED 30 SEPTEMBER (EXCLUDING CFDs)
Source: Mercury Purchases and Transpower SCADA
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE03
16%
29%
23%
19%
5%
8%
Financial Year Q1 2021
MERCURY
MERIDIAN ENERGY
CONTACT ENERGY
GENESIS ENERGY
TRUSTPOWER / TILT
OTHER
>> MARKET DATA
18%
32%
21%
17%
5%
7%
Financial Year Q1 2020
13%
87%
Financial Year Q1 2021
MERCURY
OTHER
14%
86%
Financial Year Q1 2020

> 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
$50
$60
$70
$80
$90
$100
$110
$120
0
1,000
2,000
3,000
4,000
5,000
6,000
JulAugSepOctNovDecJanFebMarAprMayJun
$/MWh
GWh
AVERAGE NATIONAL STORAGEFY2020 NATIONAL STORAGE
FY2021 NATIONAL STORAGEROLLING 12 MONTH AVERAGE OTA PRICE
ROLLING 12 MONTH AVERAGE BEN PRICE
0
100
200
300
400
500
600
JulAugSepOctNovDecJanFebMarAprMayJun
GWh
AVERAGE SINCE 1999FY2020FY2021

> OTAHUHU ASX FUTURES SETTLEMENT PRICE
Source: ASX
> BENMORE ASX FUTURES SETTLEMENT PRICE
Source: ASX
MERCURY NZ LIMITED QUARTERLY OPERATIONAL UPDATE05
$111.93
$102.79
$101.00
$94.10
$93.85
$96.00
$114.01
$95.65
$92.56
$122.42
$100.14
$93.46
$0
$20
$40
$60
$80
$100
$120
$140
FY21FY22FY23
$/MWh
Financial Year
AS AT 30 SEPTEMBER 2019AS AT 31 MARCH 2020AS AT 30 JUNE 2020AS AT 30 SEPTEMBER 2020
$98.96
$91.80
$91.00
$78.63
$70.05
$67.23
$104.40
$79.83
$75.74
$111.22
$85.19
$78.14
$0
$20
$40
$60
$80
$100
$120
FY21FY22FY23
$/MWh
Financial Year
AS AT 30 SEPTEMBER 2019AS AT 31 MARCH 2020AS AT 30 JUNE 2020AS AT 30 SEPTEMBER 2020

> NATIONAL CONSUMPTION (NON-TEMPERATURE ADJUSTED)
Source: Transpower Information Exchange
> AUCKLAND CLIMATE SUMMARY ( ⁰C)
FINANCIAL YEAR
Q1Q2Q3Q4
202112.3---
202012.316.719.514.4
201912.116.320.214.1
201812.317.220.714.3
201712.116.119.314.3
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
9,573
9,430
9,451
9,554
9,553
9,568
1,268
1,267
1,251
1,263
1,316
1,240
0
2,000
4,000
6,000
8,000
10,000
12,000
Q1 2016Q1 2017Q1 2018Q1 2019Q1 2020Q1 2021
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-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
Jul-20
% Churn
Monthly ICPs
NZ MARKET CHURN (LHS)ANNUAL NZ MARKET CHURN % (RHS)