Strong performance supports record renewable investment
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Results for announcement to the market
Name of issuer Mercury NZ Limited (MCY)
Reporting Period 12 months to 30 June 2026
Previous Reporting Period 12 months to 30 June 2025
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$3,224,000 -8%
Total Revenue $3,224,000 -8%
Net profit/(loss) from
continuing operations
$321,000 +32000%
Total net profit/(loss) $321,000 +32000%
Interim/Final Dividend
Amount per Quoted Equity
Security
$0.17000000
Imputed amount per Quoted
Equity Security
$0.06611111
Record Date 03/09/2026
Dividend Payment Date 30/09/2026
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security (in
dollars and cents per
security)
$3.62 $3.41
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer to accompanying audited financial statements.
Authority for this announcement
Name of person
authorised
to make this announcement
Howard Thomas, Company Secretary
Contact person for this
announcement
Howard Thomas, Company Secretary
Contact phone number +64 9 308 8200
Contact email address Howard.Thomas@Mercury.co.nz
Date of release through MAP
18/08/2026
Audited financial statements accompany this announcement.
---
The Mercury Building, 33 Broadway, Newmarket 1023
PO Box 90399, Auckland 1142
NZX / ASX Announcement
FY26 Results
For the full year ended 30 June 2026
18 August 2026
Strong performance supports record renewable investment
Results overview
Mercury delivered a strong FY26 performance, supported by higher hydro
generation, new renewable generation, disciplined cost management and
continued execution of its strategy.
The company reinvested 66% of its FY26 operating earnings (EBITDAF) -
$710 million - in new and existing renewable generation assets. Operating
cashflow of $762 million helped fund this investment while maintaining balance
sheet strength and progressive shareholder returns.
Mercury Chief Executive Stew Hamilton said, “We are converting strong
financial performance into new generation, greater system resilience and the
capacity to support New Zealand’s future economic growth.”
Generation commenced at three major Mercury renewable projects in 2026, all
of which are expected to be fully operational by the end of 2026. The projects
are Ngā Tamariki Geothermal Station expansion near Taupō, Kaiwera Downs
2 Wind Farm near Gore, and Kaiwaikawe Wind Farm near Dargaville. These
projects represent around $1 billion of investment and 1.1TWh of additional
annual renewable generation - enough to power around 160,000 homes.
Mercury’s next development will be Puke Kapo Hau (Mahinerangi Stage 2)
Wind Farm, west of Dunedin. In August, Mercury’s Board approved the $506
million project. Final grid connection studies are being completed with
Transpower. Mahinerangi Wind Farm (Stages 1 and 2) is expected to be New
Zealand’s largest wind farm once complete, with 228MW total capacity and
annual generation of 646GWh.
Puke Kapo Hau is positioned to support South Island demand, including from
Datagrid, which is developing what is expected to be New Zealand’s most
advanced large-scale data centre project. In March 2026, Mercury announced
the signing of a 140MW power purchase option agreement with Datagrid, and
invested NZ$53 million for a 12.7% minority stake in Datagrid NZ last month.
“Datagrid shows how long-term demand, renewable development and
disciplined investment can work together,” Mr Hamilton said.
In June, Mercury launched Flex Rates, a flexible time-of-use plan that gives
eligible customers greater choice and control over their energy costs.
“We also continue to provide support for our customers in need, as well as
material support to social retailers, Nau Mai Rā and Toast Electric, and
community organisations, extending care beyond our own customer base.”
Outlook
“Our balance sheet remains strong, with S&P adjusted debt-to-EBITDA ratio of
2.0x and sufficient headroom to fund our current growth programme within
target guardrails. This enables us to invest in high-quality renewable
generation assets and provides flexibility to deliver sustainable shareholder
returns, value for our customers, and benefits for New Zealand.”
NPAT
$321m
$320m on FY25
Net Profit After Tax (NPAT) increased as a
result of higher EBITDAF, partly offset by
non-cash movements in the fair value of
electricity derivatives.
EBITDAF
$1,068m
36% on FY25
$282m on FY25
Operating earnings (EBITDAF
1
) was supported
by higher hydro generation, new renewable
generation and lower operating costs from
ongoing productivity initiatives.
Dividend
27.0 cps
3 cps on FY25
The fully imputed final dividend was 17.0 cents
per share (cps), bringing the FY26 ordinary
dividend to 27.0 cps - the 18th consecutive
year of ordinary dividend growth.
The Dividend Reinvestment Plan (DRP)
continues to be offered to shareholders.
FY27 Guidance
EBITDAF $1,075m
Dividend 29.0 cps
Full-year 2027 EBITDAF guidance reflects new
generation, continued cost discipline and
4.1TWh of hydro generation.
Guidance may change and remains subject to
any material events, significant one-off
expenses or other unforeseen circumstances
including changes to hydrological conditions.
1
Earnings before net interest expense, tax expense,
depreciation, amortisation, change in the fair value of
financial instruments, gain on sale, impairment and
revaluation losses (EBITDAF).
The Mercury Building, 33 Broadway, Newmarket 1023
PO Box 90399, Auckland 1142
Better Today, Building Tomorrow, Brighter Together
STRATEGIC
OBJECTIVE
PROGRESS MILESTONES
Generation
development uplift
• Brought the new $220m Ngā Tamariki Geothermal Station unit online in January, adding 390GWh p.a.
• Completed construction at Kaiwera Downs 2 Wind Farm in June, with final commissioning underway.
• Achieved first generation at Kaiwaikawe Wind Farm in July 2026, with full operation expected by the end
of 2026.
• Achieved final investment decision for Puke Kapo Hau Wind Farm, and progressed Stage 1 of the
Whakamaru BESS towards final investment decision.
• Advanced feasibility work for geothermal projects at Ngā Tamariki and Rotokawa, supported by appraisal
drilling.
Capture energy
transition growth
• Invested NZ$53 million for a 12.7% stake in Datagrid NZ in July 2026, following the announcement of a
signing of a 140MW power purchase option agreement in March.
• Commenced 10-year Fonterra contracts to support electrification of its Edgecumbe and Waitoa sites, and
expanded smart hot water management to 50,000 cylinders (20MW).
Rebuild sector
confidence
• Supported more timely and certain consenting and renewable investment settings through proposed
RMA reforms and Fast-track processes.
• Contributed to practical solutions for gas security, firming and hedge-market access.
Connected and high-
performing culture
• Launched the Safety Intelligence Programme to strengthen workplace safety capability.
• Lifted the Cultural Performance Index by 5%, reflecting continued progress in performance and culture.
Earnings
transformation
• Delivered strong EBITDAF, exceeding initial full-year guidance by $68m, and reinvested 66% - $710m -
in new and existing renewable generation assets.
• Achieved operating costs target of $370m while maintaining quality and safety outcomes.
• Stay-in-business CAPEX was $150m, reflecting the completion of the Karāpiro Hydro Station upgrade,
geothermal drilling campaign and investment in hydro refurbishment.
ENDS
Howard Thomas
General Counsel and Company
Secretary
Mercury NZ Limited
For investor relations inquiries, please contact:
Paul Ruediger
Head of Business Performance & Investor Relations
027 517 3470
investor@mercury.co.nz
For media inquiries, please contact:
Catherine Morab
External Communications Manager
09 282 1158
mercurycommunications@mercury.co.nz
ABOUT MERCURY NZ LIMITED
Mercury’s generation assets produce electricity from 100% renewable sources: hydro, geothermal and wind. We’re
also a retailer of electricity, gas, broadband and mobile services. We’re listed on the New Zealand Stock Exchange
and the Australian Stock Exchange with the ticker symbol ‘MCY’, with foreign exempt listed status. The New Zealand
Government holds a legislated minimum 51% shareholding of Mercury.
---
FULL YEAR
RESULTS
PAUL RUEDIGERSTEW HAMILTONRICHARD HOPKINS
Chief ExecutiveChief Financial OfficerHead of Business Performance & Investor Relations
FY26
18 August 2026
MERCURY FULL YEAR RESULTS FY26
DISCLAIMER
This presentation has been prepared by Mercury NZ Limited and its group of companies (“Company”) for informational purposes. This disclaimer applies to
this document and the verbal or written comments of any person presenting it.
Information in this presentation has been prepared by the Company with due care and attention. However, neither the Company nor any of its directors,
employees, shareholders nor any other person gives any warranties or representations (express or implied) as to the accuracy or completeness of this
information. To the maximum extent permitted by law, none of the Company, its directors, employees, shareholders or any other person shall have any liability
whatsoever to any person for any loss (including, without limitation, arising from any fault or negligence) arising from this presentation or any information
supplied in connection with it.
This presentation may contain projections or forward-looking statements regarding a variety of items. Such projections or forward-looking statements are
based on current expectations, estimates and assumptions and are subject to a number of risks and uncertainties, including material adverse events,
significant one-off expenses and other unforeseeable circumstances, such as, without limitation, hydrological conditions. There is no assurance that results
contemplated in any of these projections and forward-looking statements will be realised, nor is there any assurance that the expectations, estimates and
assumptions underpinning those projections or forward-looking statements are reasonable. Actual results may differ materially from those projected in this
presentation. No person is under any obligation to update this presentation at any time after its release or to provide you with further information about the
Company.
A number of non-GAAP financial measures are used in this presentation. Yo u should not consider any of these in isolation from, or as a substitute for, the
information provided in the audited consolidated financial statements for the year ended 30 June 2026, which are available at www
.mercury.co.nz/investors.
The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation.
The presentation does not constitute an offer to sell, or a solicitation of an offer to b u y, any security and may not be relied upon in connection with the
purchase or sale of any security. Nothing in this presentation constitutes legal, financial, tax or other advice.
2
MERCURY FULL YEAR RESULTS FY26
•EBITDAF of $1,068m, up 36% - driven by higher renewable generation and cost discipline
•OPEX held at $370m target, down $26m on FY25 and down 10.2% in real terms, reflecting focused operational execution
•41% of customers now hold two or more products, with churn 5% below the market
•SIB CAPEX of $150m in line with ten year plan, including FID for $590m hydro refurb programme
STRONG FY26 PERFORMANCE SUPPORTS RECORD RENEWABLE INVESTMENT
3
•Three projects being delivered on time and on budget, adding ~1.1TWh a year
•Puke Kapo Hau FID in August for $2.6m/MW – our capability driving cost down from recent projects at $3.7m/MW
•3.5TWh target to 2030, with ~1TWh of geothermal in advanced feasibility and $75m committed to drilling
•Tw o-thirds of FY26 EBITDAF reinvested, reflecting continued growth investment within balance sheet guardrails
•Debt/EBITDA of 2.0x and $610m undrawn, comfortably inside our BBB+ guardrails
•18 consecutive years of ordinary dividend growth. FY26 total dividend up 13% to 27 cents per share (cps)
•Dividend settings under review to reflect future earnings base and completion of first major investment cycle
Balance
sheet
strength
Resilient
earnings
Disciplined
growth
NEW TODAY | EBITDAF FY26 $18m above upgraded guidance, FY27 guidance $1,075m, FY30 target raised to $1.2–1.25b | FID at Puke Kapo Hau | Dividend 27c, guiding 29c
MERCURY FULL YEAR RESULTS FY26
STRONG FY26 DELIVERY – ALL GUIDANCE METRICS MET OR BEATEN
FY26 EBITDAF
$1,068m
Initial guidance: $1,000m
Up 36% on FY25 $786m
FY26 normalised $1,050m, FY27 guidance $1,075m
FY26 Operating Cashflow
$762m
Up 58% on FY25 $483m
FY26 Dividend
27 cps
18th consecutive year of growth
+13% on FY25
FY27 guidance 29 cps
FY26 Operating Expenses
$370m
Guidance: $370m
Down 6.6% on FY25 $396m (10.2% real)
Generation
9,070GWh
Up 15% on FY25 7,907GWh
Safety
TRIFR 0.31
Down from 0.44 in FY25
Zero fatality and high severity H&S incidents
Proven delivery, with credible future growth and growing shareholder returns
FY26 Capital Expenditure
$710m
Debt/EBITDA
1
~2.0x
Up 46% on FY25 $485m
SIB Capex: $150m up 9% on FY25 $138m
Growth CAPEX: $560m up 61% on FY25 $347m
New Generation
3 projects generating
OEC5 first generation January 2026
KD2 first generation April 2026
Kaiwaikawe first generation July 2026
Within 2 –3x BBB+ guardrails
Down from 2.5x in FY25
4
1
Adjusted for expected S&P Global treatment
MERCURY FULL YEAR RESULTS FY26
STRONG EARNINGS CONVERTED TO CASH WHILE FUNDING GROWTH AND DIVIDENDS
Higher generation and disciplined operational execution lifts performance
•Higher EBITDAF was supported by higher hydro generation, new
geothermal and wind generation and disciplined cost management
•Higher hydro generation was supported by strong 83
rd
percentile
inflows and improved efficiency
•Higher yields partly offset by lower wholesale prices and net CfD
position from higher generation
•Disciplined cost management lowered operating expenses to
$370m, $26m below FY25 despite ongoing inflationary pressures
FY26 EBITDAF PERFORMANCE
CAPITAL ALLOCATION
Quality earnings invested in future growth
•We generated strong earnings and reinvested the majority back into
New Zealand’s energy system, while continuing to grow dividends
•66% ($710m) of FY26 EBITDAF was reinvested in new and existing
assets
•Growth investment of $560m funding new renewable generation
at scale – primarily from KD2 wind farm ($300m), Kaiwaikawe
($ 178m) and OEC5 ($50m)
•Debt/EBITDA reduced to 2.0x, preserving capacity for future growth
5
1068
(171)
(678)
(227)
(91)
(130)
(113)
-325
-125
75
275
475
675
875
1075
EBITDAFInvestingDividends Paid
with Cash
InterestTaxWorking CapitalIncrease in
Net Debt
$m
786
1,068
228
12
29
26
(12)
400
600
800
1,000
1,200
FY25Generation
volume
C&I YieldsYields &
Portfolio
Other
income
Operating
Expenses
FY26
EBITDAF ($m)
MERCURY FULL YEAR RESULTS FY26
396
370
(7)
(6)
(10)
(3)
300
350
400
FY25Employee costs -
Generation
Employee costs -
Customer
Asset maintenanceOtherFY26
OPEX ($m)
LEADING OPERATIONAL EFFICIENCIES AND COST DISCIPLINE
Operating Expenses
•Our focus on operational efficiencies and cost discipline has
resulted in $26m or 6.6% lower operating expenses which is a
reduction of 10.2% in real terms
•Generation and Customer segments delivered $7m and $6m
employee-related cost savings, achieved through efficiencies
and refreshed operating models
•Lower asset maintenance spend mainly due to $8m decrease in
non-recurring geothermal well repairs
•$3m reduction in other expenses as major projects completed in
FY25
•Management achieved $370m p.a. OPEX target despite ongoing
inflationary pressures and major transformation activity during
the year
OPERATING EXPENSES
OPERATING EXPENSES BY SEGMENT
175
96
125
162
86
122
0
50
100
150
200
Employee compensation and benefitsMaintenance expensesOther expenses
OPEX ($m)
FY2025FY2026
6
MERCURY FULL YEAR RESULTS FY26
25
43
19
35
27
Geothermal drillingHydro refurbishmentArapuni Left Abutment
& TCG
Other Generation CapexEnterprise and other
SIB CAPEX breakdown ($m)
STAY-IN-BUSINESS INVESTMENT PROTECTS RELIABILITY AND LONG-TERM CASHFLOW
Higher major hydro asset spend offsetting
conclusion of drilling campaign
•We assess asset condition and consequence over a multi-year
horizon with work ranked by criticality and then bundled to cut
cost and outage impact
•The 8 well drilling campaign at Kawerau, Ngā Tamariki and
Rotokawa fields concluded during the financial year reducing
the drilling spend for FY26
•Spend on next phase of the hydro refurb programme at
Maraetai, Ōhākurī and Ātiamuri as well as design and early
construction work at Arapuni Left Abutment is underway
STAY-IN-BUSINESS CAPEX
STAY-IN-BUSINESS CAPEX BREAKDOWN
FY26 Stay-In-Business CAPEX breakdown
•Geothermal drilling costs related to the completion of one
production well and one reinjection well at Rotokawa
•Hydro refurbishment costs incorporate both initial spend on
new programme at Maraetai, Ōhākurī and Ātiamuri as well as
completion work on the third generating unit and the intake
gate replacement at Karāpiro
•Arapuni Left Abutment & Taupo Control Gates (TCG) relate to
multi-year projects to strengthen asset resilience and reduce
risk at our hydro sites
•Other generation CAPEX mainly includes minor stay-in-
business CAPEX projects
138
150
26
1
(5)
(11)
0
50
100
150
200
FY25Drilling campaignMajor Hydro
Resilience Projects
Other Generation
Reinvestment
OtherFY26
SIB CAPEX ($m)
7
NGĀ TAMARIKI GEOTHERMAL STATION
EXECUTION
CREATES
VALUE
MERCURY FULL YEAR RESULTS FY26
-
OPERATIONAL DELIVERY – THREE FLAGSHIP PROJECTS TRACKING ON TIME AND ON BUDGET
STATUS COMMENTS
TIME
On plan – All 36 turbines erected, energised and
handed over to Mercury
COSTForecast below budget
QUALITY
On track – Performance and reliability testing on
all turbines completed. Transformer #2 bushing
issue currently being remediated
HSEZero serious harm to date
RISK
Full generation expected Q2 FY27 on completion of
transformer #2 remediation; output capped at
120MW in the interim, with the turbines themselves
erected, tested and handed over
STATUS COMMENTS
TIME
On plan – first generation achieved in early July, 10
of 12 turbines erected, on plan for full generation by
December
COSTOn budget
QUALITY
On track - civil, substation, electrical works
handed over. Turbine erection and
commissioning underway
HSEZero serious harm to date
RISK
Remaining installation is subject to normal
weather; timing of Transpower's grid protection
work is not expected to be material
STATUS COMMENTS
TIMEAs planned – First generation January 2026
COSTUnder budget
QUALITY
Reliability and performance tests completed
successfully
HSEZero serious harm
RISK
Pipeline remediation completing in H1 FY27 will take
station output ~1MW above design; ~7MW
temporarily constrained in the interim
KAIWERA DOWNS STAGE 2 WIND FARM
OEC5 GEOTHERMAL
KAIWAIKAWE WIND FARM
H1 FY26Q4 FY24Q1 FY27H1 FY27
FIDTURBINE
DELIVERY
STARTUPCOD
Q3 FY25Q4 FY24H2 FY26H2 FY26
FIDMAJOR EQUIP.
DELIVERY
STARTUPCOD
H1 FY26Q4 FY24Q4 FY26H1 FY27
FIDTURBINE
DELIVERY
STARTUPCOD
9
MERCURY FULL YEAR RESULTS FY26
MORE VALUE PER CUSTOMER AT LOWER COST-TO-SERVE
Scale, platform improvements and operating discipline continue to
lift productivity
•41% of customers now hold two or more products, up from 38%
•Strong customer retention supported by our multi-product
strategy, with electricity churn at 13.7%, ~5 percentage points
below the industry average
•Total connections
1
increased by approximately 35k to 936k
•Lower cost to serve with OPEX per connection reduced to $186,
17% lower than FY24
•50k mobile connections achieved in July 2026
•25 years as a 5-star partner of the Starship Foundation - more than
$20 million raised with our customers
Flexibility platform
•Flex Rates adds time-of-use capability and supports future
demand flexibility
•More than 500 sign-ups in the first 10 days, with 46% new to
Mercury
FOUR YEARS OF COMPOUNDING BUNDLING GROWTH
SCALE ADVANTAGE SECOND YEAR OF LOWERING FULLY LOADED COST TO SERVE
688
677
685
693
168
184
215
242
857
861
901
936
32.7%
33.8%
38.3%
40.9%
5%
15%
25%
35%
45%
400
600
800
1,000
1,200
FY23FY24FY25FY26
% of Customers
ICPs and connections '000s
Energy ICPsTelco connectionsTotal connections% of Customers with 2+ products
215
223
198
186
857
861
901
936
450
550
650
750
850
950
60
110
160
210
260
FY23FY24FY25FY26
No. of connections in '000s
$ OPEX / connection
Segment OPEX per connectionTotal connections (incl Now)
10
1
Total connections excludes C&I
MERCURY FULL YEAR RESULTS FY26
EL NIÑO – A DIFFERENT RISK PROFILE TO FY25
11
1
What is forecast
•Earth Sciences NZ (NIWA) declared El Niño in FY26, with peak conditions expected
over the 2026-27 austral summer
1
•Forecast to be one of the strongest events on record
•Active westerly flow across New Zealand with unusually windy conditions in spring
•Westerlies typically lift inflows into South Island hydro catchments
•Actual rainfall, inflows and wholesale price outcomes remain uncertain
2
Why FY25 is not the comparison
•National hydro storage at 141% of historical average as at 31 July
•FY25 pressure reflected low national inflows alongside constrained gas supply
•10 -year Huntly Firming Option in place from 1 January 2026 – 50MW to Mercury,
150MW across the industry
•Supported by a solid fuel reserve of up to 600,000 tonnes for dry winters
•New generation added: OEC5 fully operational, with KD2 and Kaiwaikawe now
generating
3
Portfolio position today
•FY27-FY28 sales substantially contracted
•Geothermal and wind output is not hydro inflow dependent, diversifying the
generation base
•Lake Taupō storage closed FY26 above average limiting the impact of lower
hydrological inflows in FY27
4
What this could mean for Mercury
•Higher South Island inflows would put downward pressure on national spot prices
•Mercury's hydro is Waikato-based, so softer national spot is a price effect rather
than an inflow constraint
•Hydro storage may be reserved for higher-priced periods, supporting GWAP
•Volatile wind conditions will need to be managed using flexible hydro generation
•With the book largely contracted, lower spot reduces the cost of residual
purchases
El Niño presents a different risk profile to FY25. More generation, firming cover and
a substantially contracted book improve Mercury’s resilience across a range of outcomes
1
Earth Sciences New Zealand (NIWA) Seasonal Climate Outlook, August-October 2026.
MERCURY FULL YEAR RESULTS FY26
Contracted demand, generation diversity and staged investment support earnings resilience while preserving growth options
A PORTFOLIO BUILT FOR RESILIENCE
PORTFOLIO RESPONSE TO KEY RISKS
PRICE EXPOSURE
Avg. C&I contract duration of ~5 years; long-term
contracting limits exposure to outright power
prices, helps customers manage transition and
supports generation development
HYDRO/WEATHER
VOLATILITY
Geothermal/wind output, Lake Taupō storage,
HFO and Manawa buy CFD improve portfolio flex,
reducing reliance on base-load hydro
DEMAND
UNCERTAINTY
Long-term Fonterra, Visy, NZAS and Whakatāne
Mills supply contracts support growth with projects
staged against visible or contracted demand
FUNDING DISCIPLINE
Capital is sequenced within return thresholds
and balance sheet guardrails
Resilient earnings across a range of long-term market,
demand and hydrological conditions
Open exposure remains controlled as the portfolio grows. New
generation is sequenced against demand rather than built ahead of it
12
93%
89%
87%
7%
11%
13%
FY28
FY29
FY30
Retail/contractedOpen/merchant exposure
1
1
Assumes retaining current Retail market share and generation includes existing and new generation under construction (excl. PKH)
87% OF FY30 GENERATION COVERED BY RETAIL AND CONTRACTED DEMAND
KAIWERA DOWNS WIND FARM
NEXT
GROWTH
CYCLE
MERCURY FULL YEAR RESULTS FY26
VISIBLE DEMAND SUPPORTS STAGED INVESTMENT
40.3
45
52
44
49
43
47
38
40
42
44
46
48
50
52
54
20152020202520302035
HistoryTealMercury MidMaroon
Aligns with BCG 'High', Transpower
'Aotearoa Intelligence' and MBIE
'Reference' scenarios
Aligns with BCG 'Low',
Transpower 'Patchwork Nation'
and MBIE 'Constraint' growth
paths.
ELECTRICITY DEMAND
(TWh, Calendar Year)
•Visible pathways to approximately 4TWh of demand growth
by 2030
•Industrial electrification is the most established source
•Data centres could become a material additional source
•Mercury will sequence investment against contracted or
increasingly visible demand
•Wind and geothermal platforms provide flexibility to
advance the right projects at the right time
•Mercury does not need the high-demand case to progress
value-accretive growth
14
MERCURY FULL YEAR RESULTS FY26
Scale and diversity: NZ’s largest portfolio (up to 5TWh) of geothermal
options with 2.5TWh under active development
People capability and partnerships: deep expertise in exploration,
development, operations and iwi partnerships
Repeatable execution: modular growth options integrated across the
geothermal value chain. Successful delivery of OEC5 and appraisal drilling
campaign for future projects underway
0%
2%
4%
6%
8%
10%
12%
14%
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
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
Jan-20
Jul-20
Jan-21
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
Jul-24
Jan-25
Jul-25
Jan-26
Jul-26
Jan-27
Mercury’s geothermal and wind share of national generation (rolling 12 months)
Kawerau Geothermal
Station
Ngā Awa Pūrua
Geothermal Station
Ngā Tamariki
Geothermal Station
Turitea N &
Waipipi Wind
Farms
Turitea Sth & KD1
Wind Farms
Mahinerangi
Wind Farm
OEC5, KD2 &
Kaiwaikawe
Scale and diversity: large and active development pipeline, regionally diverse
with a North Island weighting
People capability and partnerships: experienced internal team and supply
chain partners. Successful consenting enabled through a deliberate focus
on deepening trust with stakeholders
Repeatable execution: successful delivery of Waipipi, Tu r i t e a, KD1, KD2, and
Kaiwaikawe wind farms. FID achieved on Puke Kapo Hau
REPEATABLE PLATFORMS REDUCE EXECUTION RISK AND IMPROVE CAPITAL EFFICIENCY
GeoPlatform
WindPlatform
15
MERCURY FULL YEAR RESULTS FY26
2
4
5
1
NEAR-TERM DEVELOPMENT PIPELINE – ALL INVESTMENTS REMAIN STAGED AND GATED
2
WHAKAMARU BESS
•Phase 1 capacity 100MW (300MW consented)
•Long-lead, BESS and BoP procurement in progress
•On track for IG4/FID H2 FY27
IG3 - Procurement
4
GEOTHERMAL EXPANSION
•Underpinned by appraisal drilling targeting brownfield sites
•Drilling rig secured ready for drilling to commence Q4 FY27
•1TWh in advanced feasibility stage
IG1 - Feasibility
HYDRO REHAB
•Karāpiro rehabs delivered, +32GWh annually
•Contracts signed for Maraetai 1, Ōhākurī and Ātiamuri
•FY27 milestones are design work for Ōhākurī and
model-testing for Maraetai 1
Construction
5
1
PUKE KAPO HAU WIND
•Capacity / output: 192MW / 533GWh
•See next slide
IG4 – FID
WIND
GEOTHERMAL
HYDRO
BESS
The pipeline provides multiple pathways to our FY30 target, while maintaining disciplined, staged capital allocation
WAIKOKOWAI WIND
IG2 - Consenting
3
•North Island location
•Capacity / output: 300-350MW / 900-1,200GWh
•Consenting in progress
•Targeting IG3 late FY27/early FY28
3
6
PUKETOI WIND
•Lower NI location
•Capacity / output: 228MW / 1,080GWh
•Detailed feasibility progressing
IG1 - Feasibility
6
16
MERCURY FULL YEAR RESULTS FY26
FID ACHIEVED AT PUKE KAPO HAU – WINDPLATFORM SCALE CONTINUES TO DRIVE VALUE
•Puke Kapo Hau is the Stage 2 expansion of the Mahinerangi Wind
Farm, located west of Dunedin. Together this is expected to be the
largest wind farm in NZ. Puke Kapo Hau name was gifted by Te
Rūnanga o Ōtākou and means ‘the hill that catches the wind’
•The 40-turbine wind farm will add 192MW of capacity and generate
approximately 533GWh annually
•Mercury’s WindPlatform creates value through scale, specialist
capability, trusted partnerships and repeatable execution. Puke Kapo
Hau demonstrates these benefits, with a project cost of $2.6m/MW
•Mercury received fast-track consent approval in July. This is the first
Mercury project to receive approval through the fast-track process
•Key contracting arrangements secured with experienced wind farm
Balance of Plant (BoP) contractors (Higgins, Electronet), and Nordex
•FID achieved at August Board
•KD2 Mercury and BOP teams mobilising to execute this project
•Final grid connection studies underway, project will proceed once
studies are completed and grid connection is de-risked
•Civil work expected to start Q2 FY27
•First generation is expected by Q4 FY28
•Full generation is expected by Q2 FY29
•Nordex is a leading global onshore wind player, with over 68GW
installed across 46 countries and 12,000+ employees. It will
subcontract in-country delivery and installation to contractors with
experience in NZ wind
1
Capital cost excludes capitalised interest and sunk costs
2
Total operating costs include operating expenditure and direct costs
17
0
20
40
60
80
100
120
140
PKHKWK WindKD2 WindGeneric Solar at central
NI
LRMC real at AucklandLRMC real at SiteLCOE real at Site
Mercury owned generation at FID
Generic Solar
$/MWh at FID
Project Specification (at FID)Puke Kapo HauKaiwera Downs Stage 2Kaiwaikawe
Full GenerationQ2 FY29Q2 FY27Q2 FY27
WTG SupplierNordexVestasVestas
O&M Contractor / TermNordex / 30 yearsVestas / 30 yearsVestas / 30 years
Turbines40 x N133 4.8MW36 x V136 4.3MW12 x V162 6.4MW
Turbine Tip Height / Tower Height156m / 90m156m / 88m206m / 125m
Rotor Diameter133m136m162m
Total Capacity192MW155MW76.8MW
Net Capacity Factor31.7%38.7%33%
P50 Yield (Average over 30 years)533GWh pa525GWh pa221GWh pa
Capital Cost
1
$506m$486m$287m
Total Operating Costs
2
(First full year pa)
$17/MWh$17.3/MWh$17.8/MWh
Project Cost$2.6m/MW$3.1m/MW$3.7m/MW
MERCURY FULL YEAR RESULTS FY26
SCALING THE GEOPLATFORM: NEXT PHASE OF GROWTH
CAPABILITY & REPEATABILITY
DISCIPLINE
ACTIVE PIPELINE
TECHNOLOGY
NGĀ TAMARIKI EXPANSION
Project cost$6.5-8m/MW
Target capacity / outputUp to 75MW / 620GWh
LRMC at Auckland
1
~$110/MWh
Next Investment gateIG2 FY28
FID DateEarliest H1 FY29
ROTOKAWA EXPANSION
Project cost$6.5-8m/MW
Target capacity / outputUp to 50MW / 420GWh
LRMC at Auckland
1
~$110/MWh
Next Investment gateIG2 FY28
FID DateEarliest H1 FY29
LEADING GROWTH PLATFORM
1 LRMC real at Site refers to the required year 1 average spot price to achieve WACC return. This considers GWAP/TWAP profile over time. LRMC real at Auckland reflects the location factor adjustment to scale the site grid price to Auckland. Geothermal forward view as at FY27.
5 TWh
Geo Platform
pipeline
1 TWh
of development projects
are in feasibility
$75m
Board approved appraisal
drilling in FY27-FY28
2030
target for first
generation
Planning commenced for three well appraisal drilling campaign.
Procurement in progress and drilling rig secured ready for
drilling to commence Q4 FY27
•1TWh of active geothermal pipeline opportunities are
in feasibility, focused on maximising brownfield
potential at Ngā Tamariki and Rotokawa
•Mercury is preparing future geothermal high-
confidence options, including greenfield opportunities
such as Rotoma
•Proven ability to execute successful drilling
campaigns, delivering on time and on budget
•Global supply chain and connection for all phases
of development lifecycle
•Optionality across existing brownfield and
greenfield locations
•Geothermal delivers robust price capture and
reliable baseload generation, with an economic
value proposition
•Clear investment gates define checkpoints at
which capital commitments are evaluated
•New technology could provide options for future
economic upside as costs fall
•We are supporting the NZ Government Superhot
project with our joint venture partner Tauhara
North No.2 Trust. Mercury also has employees
seconded into the Project
18
MERCURY FULL YEAR RESULTS FY26
DATAGRID - INVESTMENT CREATES A PATHWAY TO LONG-TERM DEMAND GROWTH
19
•NZ$53m (US$30m) equity investment, from existing facilities
•12.7% minority stake in Datagrid Holding Group NZ
•Board representation with Mercury CE appointed as a director of
Datagrid NZ
•140MW / 15-year power purchase option creates pathway to
additional future demand and matching new generation
1
Current Commitment
•Potentially material long-term electricity demand
•Electricity sales and portfolio value
•Greater confidence for South Island renewable development
•Access to wider data centre opportunities
2
Strategic value
•Transpower GXP equipment pre-purchase agreement signed, supporting
targeted end CY27 commissioning
•Tasman Ring Network supply/installation contract signed with ASN and
OMS. The 2,300km system would provide the South Island’s first
international submarine cable and improve connectivity resilience
•Major consented data centre project in New Zealand
3
Execution proof points
•Premier NZ site which is advantaged by timeline, climate & connection
•No commitment to fund future phases, with any further equity funding
optional and subject to separate approval
•Generation development continues to have its own contracting, return
and FID gates
•Exposure is limited – impairment and execution risk remain
4
Limited downside
A relatively modest investment buys access to potentially material demand and broader strategic value.
Future capital remains optional and separately gated
MERCURY FULL YEAR RESULTS FY26
KEY MESSAGE
A PROVEN BUILDER WITH
A STRONG PIPELINE
Mercury’s leading pipeline allows for
geographic flexibility and selective
growth
~1.1TWh
in delivery and
generating today
3.5TWh
of new generation
by 2030
~17TWh
of options – a leader
in NZ
HOW THE PIPELINE CONVERTS TO EARNINGS
Options become projects as demand firms and returns clear our hurdles
1. PROVEN
We build what we promise
•5 of the last 6 wind farms
built in NZ were ours
•Three projects started
generating in 2026
•Repeatable wind and
geothermal platforms
2. COMMITTED
Next projects already moving
•FID achieved at Puke Kapo Hau –
192MW
•$75m committed to geothermal
appraisal drilling
•Whakamaru BESS targeting FID
in H2 FY27
3. OPTIONS
Scale and timing flexible
•High quality repeatable wind
and geothermal platforms
•Datagrid and electrification
demand upside
•Commit capital after technical,
commercial and investment
gates
HOW WE CHOOSE
DEMAND VISIBILITY
Customer/market signal is clear
PROJECT QUALITY
Best location, technology and timing
SEQUENCING CHOICE
Accelerate, defer or retain the option
The growth case is a portfolio of choices - sequenced as demand becomes visible, delivered with proven capability
OUR GEO AND WIND PLATFORMS UNDERPIN THE DELIVERY OF NZ’S LEADINGPIPELINE
20
CAPITAL
ALLOCATION
MERCURY FULL YEAR RESULTS FY26
CAPITAL ALLOCATION FRAMEWORK GOVERNS EVERY INVESTMENT DECISION
Capital follows delivery-readiness, not the calendar
TIMING
•Invest against visible demand growth
•Avoid building ahead of the market
•Demand growth from major energy users improves
confidence in timing
•Long-term contracting supports investment
confidence
VALUE
•Invest only where projects are expected to be value
accretive
•Prioritise value over simple MW growth
•Scale, diversity and modularity support better project
selection
RISK
•Projects progress through clear technical, commercial
and investment gates before major capital is
committed
•If outcomes fall short, the downside would be a one-off
write-off rather than ordinary operating cost
FUNDING
•Investment sequenced within balance sheet
guardrails to protect the BBB+ rating
•On our current plan, leverage peaks at around 2.6x
before declining, consistent with our S&P settings
FUNDING
Delivered within balance
sheet guardrails
RISK
Assessed for construction,
market and technology risk
TIMING
Sequenced through
investment gates IG1–IG4
VALUE
Must clear return hurdles
and be earnings accretive
22
MERCURY FULL YEAR RESULTS FY26
BALANCE SHEET CAPACITY SUPPORTS THE NEXT GROWTH CYCLE
Capital structure well positioned for growth
•We target Debt/EBITDA between 2x – 3x after adjusting for S&P Global
treatment, consistent with our BBB+ rating
•Debt/EBITDA
1
decreased to 2.0x for FY26 due to higher EBITDAF. Net
debt slightly higher at $2.4b, reflecting completion of the Ngā Tamariki
Geothermal Station expansion and continued investment into the
Kaiwera Downs and Kaiwaikawe Wind Farms
•Debt/EBITDA, based on current plan including uncommitted growth
CAPEX, is forecast to be within 2 – 3x band during the planned period.
Debt/EBITDA forecast to peak at around 2.6x over FY29 – FY30
Robust liquidity headroom to fund committed growth CAPEX
•$250m MCY080 Green Bonds issued in April 2026 (including $50m
oversubscriptions) to support growth and refinance $200m MCY040
Green Bonds maturing September 2026
•Undrawn committed facilities
2
of $610m as at 30 June 2026
Diversified Funding Profile
•Diversified funding sources: commercial paper, bank facilities, domestic
wholesale bonds, retail bonds, AUD wholesale bonds and capital bonds
•Well balanced maturity profile to effectively manage re-financing risk
NET DEBT AND DEBT/EBITDA
1
DEBT MATURITY PROFILE
1.3
2.0
1.9
2.0
2.2
2.4
0
1
2
3
FY21FY22FY23FY24FY25FY26
Net Debt ($b) Debt/EBITDA
Net DebtLiquidity HeadroomBBB+ RangeNet Debt/EBITDA
1
Adjusted for expected S&P Global treatment
2
Undrawn bank facilities net of commercial paper on issue
0
200
400
600
20272028202920302031203220332052205320542055
$m
Financial Year
Commercial PaperUndrawn Bank FacilitiesUndrawn Rolling Bank Facilities
Retail Green BondsDomestic Wholesale Green BondsCapital Bonds
AUD Green Bonds
1
23
MERCURY FULL YEAR RESULTS FY26
18 YEARS OF RESILIENT DIVIDEND GROWTH
•FY26 ordinary dividend of 27 cents per share and FY27 dividend
guidance of 29 cents per share
•Fully imputed final dividend of 17 cents per share, up 13% relative to
PCP. Record date is 3 September 2026 with payment date of 30
September 2026
•Current dividend policy settings of 70% to 85% of Free Cash Flows
2
on average over time
•Dividend payout deliberately at the lower end of dividend policy
settings during peak investment period
•Operating cashflow of $762m funded investment and dividends
•Progressive dividends have been maintained while record FY26
investment was funded within balance sheet guardrails
DIVIDENDS PAYOUT & POLICY SETTINGS
1
5-year weighted average payout
6.8
8
8.7
9.3
9.6
10
10.2
12
13.1
14
14.4
17
17
20
21.8
23.3
24
27
10%
25%
40%
55%
70%
85%
0
10
20
30
40
FY21FY22FY23FY24FY25FY26
Cents per share
InterimFinalDividend payout (RHS)Dividend policy (RHS)
1
24
2
Free Cash Flow is Net Cash Flow from Operating Activities less normalised stay-in-business
capital expenditure
762
150
560
117
344
161
14
SourcesUses
Dividends paid
Growth investment
Operating CF
Net debt drawdown
DRP
SIB CAPEX
Other
SOURCES AND USES OF CASH IN FY26
MERCURY FULL YEAR RESULTS FY26
REVIEWING DIVIDEND SETTINGS AS EARNINGS AND CASHFLOW EVOLVE
25
Mercury will review its dividend policy and broader capital allocation settings over the next 12 months
as earnings, cashflow and investment requirements evolve
•Earnings and cashflow have stepped up
•First major investment cycle is nearing
completion
•Balance sheet remains within guardrails
•Payout has appropriately sat near the
lower end through peak investment
•Payout settings are lower than utility peers
Why review now
1
•Whether the 70%–85% range remains
appropriate
•Where Mercury should ordinarily operate
within that range
•Peer practice
•Growth, liquidity and credit requirements
•DRP and broader capital management
settings
What the review will assess
2
•Value-accretive growth remains a priority
•Growth remains funded on balance sheet
within guardrails
•A strong investment-grade credit profile
remains important
•Progressive dividends remain a core part
of shareholder returns
•No outcome has been predetermined;
current policy remains in place during the
review
What will not change
3
FUTURE
OUTLOOK
MERCURY FULL YEAR RESULTS FY26
ENERGY INVESTMENT REMAINS ESSENTIAL - PREDICTABLE MARKET SETTINGS MATTER
27
INVESTOR TAKEAWAY
Attention on predictable long-
term settings, as considerable
investment needed
Policy settings can support
renewable investment, while dry
year and affordability initiatives
need to preserve investable
market signals
•Engage constructively
•Protect market incentives
•Invest where returns remain
attractive
Stable rules enable private
capital to fund the transition
POLICY SIGNALINVESTOR IMPLICATIONMERCURY RESPONSE
1
BUILD SETTINGS
Fast-track/RMA reform and
geothermal strategy support more
renewable supply
Better pathway to project
delivery, but grid, consenting and
timing still drive execution risk
Progress wind/geothermal options
through staged development gates and
engage in RMA reform and work with
sector on opportunities to de-risk
geothermal investment.
2
SECURITY OF SUPPLY
Dry-year firming (including LNG)
options remain under policy design
Potential for higher system cost
and greater regulatory
uncertainty
Use portfolio flexibility and engage
for lowest-cost firming design
3
AFFORDABILITY/CHOICE
Enabling customer access and
choice, consumer data right and
level playing field reforms underway
More scrutiny of retail margins,
customer value and product
design
Scale customer innovation, flexibility
and productivity while supporting
choice
Mercury supports market-based settings that deliver security, affordability and decarbonisation - while maintaining the predictability investors
need to fund long-term renewable growth
MERCURY FULL YEAR RESULTS FY26
FY27 EBITDAF GUIDANCE OF $1,075M - DELIVERED GENERATION DRIVES UNDERLYING GROWTH
•FY27 EBITDAF guidance of $1,075m on
4.1TWh of hydro generation subject to
hydrological volatility, wholesale market
conditions and any material adverse
events, significant one-off expenses or
other unforeseeable circumstances
•FY27 ordinary dividend guidance 29cps
(up 7.4% on FY26)
•FY27 stay-in-business capital
expenditure guidance of $150m
•FY26 normalised for mean hydro and wind generation, trading volatility and one-off favourable direct cost impacts
•FY27 growth reflects incremental generation from OEC5, KD2 and Kaiwaikawe
•Yield/Portfolio impacts reflect higher gas costs, and below mean hydro generation of 4.1TWh (mean is 4.2TWh),
partially offset by favourable wholesale portfolio management
28
1,068(18)
1,050
33
10(18)
01,075
FY26 Actual
EBITDAF
FY26
Normalisation
FY26 Normalised
EBITDAF
New Wind
Generation
New Geo
Generation
Yield & Portfolio
Impacts
Operating
Expenses
Guidance FY27
Full year contributions from new generation more than offset FY26 normalisation and portfolio headwinds
MERCURY FULL YEAR RESULTS FY26
INCREASED CONFIDENCE LIFTS FY30 EBITDAF TARGET TO $1.20B-$1.25B
Increased confidence in delivered generation and the development
pathway supports lifting the lower end of the FY30 target to $1.20b
•~1.1TWh of recently delivered generation adds approximately $100m
by FY30
•FY30 target assumes a $120-$130/MWh long-term wholesale power
price view in real FY27 dollars
•Portfolio impacts reflect lower wholesale prices and cost inflation
•Puke Kapo Hau provides the next material step, with full generation
expected Q2 FY29
•Further geothermal/Waikokowai/BESS contributions support the range
and remain subject to FID, timing and return thresholds
Targeting FY30 EBITDAF of $1.20b to $1.25b
1
Normalised for mean generation volumes
2
Ngā Tamariki OEC5 geothermal, Kaiwera Downs Stage 2 and Kaiwaikawe wind farms
3
Based on $120-$130/MWh (real, FY27) long term price view. Project FIDs remain return gated
29
(60)
100
50
60
50
1050
FY26 Normalised
EBITDAF
Renewables Fully
Commissioned in FY27
Portfolio ImpactsPuke Kapo Hau
Wind Farm
Additional Generation
Development
Normalised and
Expected FY30
CAGR 3-5%
1200/1250
1
2
3
MERCURY FULL YEAR RESULTS FY26
DELIVERY TODAY. DISCIPLINED GROWTH TOMORROW
A stronger earnings base, a resilient portfolio and disciplined capital allocation
support durable growth and shareholder returns
FY26 Delivery
•EBITDAF of $1,068m
•Operating cashflow of $762m
•OPEX delivered at $370m
•Three projects generating
•18 consecutive years of ordinary
dividend growth
Higher Earnings Base
•Superior portfolio with two leading
diversified growth platforms
•1.1TWh of new generation in the base
•87% of FY30 generation contracted
•FID achieved at Puke Kapo Hau
•FY30 EBITDAF target raised
Staged Growth Options
•Investment staged against visible
demand
•~17 TWh pipeline of wind, geothermal and
selective options (solar, BESS)
•Freedom to accelerate, defer or hold
•Dividend payout settings under review
30
Q&A
STEW HAMILTON
CHIEF EXECUTIVE
RICHARD HOPKINS
CHIEF FINANCIAL OFFICER
APPENDIX
MERCURY FULL YEAR RESULTS FY26
MICHELE MAUGER
CHIEF PEOPLE OFFICER
•Joined Mercury in 2026, 35+ years experience
across people and culture, including nearly two
decades in executive leadership roles
•Led people functions across a range of
industries and geographies, with experience
spanning business transformation,
organisational change and the full employee
lifecycle
SURAIYA PHILLIMORE-SMITH
CHIEF CUSTOMER OFFICER
•Joined Mercury in 2025
•20+ years local and international experience in
customer strategy, marketing and brand
•Held an executive level role at Suncorp NZ
KEVIN TAYLOR
CHIEF OPERATING OFFICER –
GENERATION
•30+ years in industry with a focus on safety,
risk, and performance (ex-Rio Tinto)
•Proven leader in building high-performing,
safety-focused teams
A CAPABLE AND MULTI-DISCIPLINED EXECUTIVE TEAM
STEW HAMILTON
CHIEF EXECUTIVE
• Appointed CEO in 2024; joined Mercury in 2021
as EGM Generation
• Former CEO of NZ Aluminium Smelters;
25+ years in industrial energy across
multiple continents
• Chemical Engineer with an MBA; experienced in
leading large, complex organisations
TIM THOMPSON
EXECUTIVE GM – WHOLESALE
•Joined Mercury in 2005; past roles include GM
Wholesale and Head of Treasury & Investor
Relations
•Deep experience in electricity trading and large
customer sales
MATT TOLCHER
EXECUTIVE GM –
GENERATION DEVELOPMENT
•Joined Mercury in 2022; 20+ years of
experience in major infrastructure across NZ
and the US
•Skilled in complex utility development
and delivery
RICHARD HOPKINS
CHIEF FINANCIAL OFFICER
•25+ years experience, last 12 years as CFO
of Zespri and Ballance Agri-Nutrients
•10+ years in European Power & Utilities
Investment Banking
•Expert in corporate finance, M&A,
transformation, and strategic development
CATHERINE THOMPSON
CHIEF STRATEGY AND CORPORATE
AFFAIRS OFFICER
• Joined Mercury in 2025
• 30+ years experience in energy and legal sectors
• Held Executive roles at Contact Energy
and Manawa Energy
33
MERCURY FULL YEAR RESULTS FY26
DELIVERING ON OUR STRATEGIC OBJECTIVES
34
This table shows how we have performed against our strategic objectives set in FY26
MERCURY FULL YEAR RESULTS FY26
0
1
2
3
0
0.5
1
1.5
FY20FY21FY22FY23FY24FY25FY26
TRIFRHigh Severity Incidents (RHS)
NGĀ TĀNGATA | OUR PEOPLE
Health, safety and wellbeing
•Mercury continued to progress towards Safety Citizenship, the highest level of its
safety maturity within the model, where safety is shared, visible and embedded in
everyday work
•This is supported by our Safety Intelligence programme, which is helping move
safety beyond compliance and into the way work is planned, led, learned from, and
improved
•During FY26, focus was placed on strengthening leadership routines, critical risk
management, HSW data and insights, contractor safety, wellbeing, and safety
assurance
•Zero fatality and high severity Health & Safety incidents in FY26; TRIFR
1
of 0.31
HEALTH AND SAFETY
EMPLOYEE MEASURES
Building organisational capability
•Michele Mauger joined as Chief People Officer in 2026, bringing 35+ years’
experience and strengthening executive capability
•Strengthened capability and performance of our executive team and senior
leaders through our Leaders Worth Following programme designed to help
collectively deliver on our purpose and strategy
•Building strong internal talent pipelines with refreshed talent potential
assessments, development and succession planning in place for senior
leadership and critical roles
•The insights from people surveys during FY26 are directly informing our key
priorities across the people strategy, customer strategy, and our partnerships
1
TRIFR is the Total Recordable Injury Frequency Rate per 200,000 hours, includes employees and on-site contractors
Accelerating performance
•Introduced enterprise-wide routines and reporting mechanisms to track progress
against our key goals
•Through our Mercury Amplify programme, we are embedding AI across the
business, building capability in our people to lift productivity and free our people
for higher value work
45
61
20
68
49
52
21
73
0
25
50
75
100
Women in LeadershipInternal MobilityPeople Leaders
of Ethnicity
Cultural Performance
Index
%
FY25FY26FY30 target
1
35
MERCURY FULL YEAR RESULTS FY26
0
200
400
600
GWh
LAKE TAUPŌ STORAGE (ave. since 1 Jul 1999)
Min / MaxAvgLake Taupo MCLFY26FY25
High Waikato inflows lift FY26 generation
•Waikato catchment inflows were elevated at the 83
rd
percentile in FY26
•This led to total FY26 hydro generation of 4,452 GWh
(31% higher than PCP)
97
th
percentile national hydro inflows see prices drop in FY26
•Spot prices decreased averaging $79/MWh at Ōtāhuhu in
FY26 vs. $196/MWh PCP
•Lake Taupō ended the year with storage above average by
~120GWh
New generation increases portfolio diversity and flexibility
•Commissioning of both the NTM OEC5 expansion as well as the
second stage of the Kaiwera Downs Wind Farm during the year
add 390GWh and 525GWh annual generation respectively
•First generation from Kaiwaikawe Wind Farm in July and
expected to provide 221GWh of additional annual generation
STRONG WAIKATO CATCHMENT INFLOWS LED TO 4.5TWH OF HYDRO GENERATION
Month EndJulAugSepOctNovDecJanFebMarAprMayJunJul
Hydro Generation -
Delta to Average
2
(GWh)
16082-362969-47-717535984226
Waikato Inflows -
Delta to Average
3
(GWh)
201-873619676-186776-9135-79-3-145
Taupō Storage –
Delta to Average
2
(GWh)
1572812397978510116916825412712034
Spot Price -
Ōtāhuhu ($/MWh)
$107$177$116$32$70$17$4$51$152$102$80$41$64
Futures Price (M-3
4
)
Ōtāhuhu ($/MWh)
$389$213$150$148$158$97$122$153$195$148$196$193$151
Source: NZHydro, WITS, ASX
1
Maximum Control Level
2
Monthly average since July 1999
3
Monthly average since July 1927
4
Closing price 3 months prior to end of month
5
To 13 Jul 2026
1
36
MERCURY FULL YEAR RESULTS FY26
1.2
+0.2
+0.5
+1.02
3.5
BUILDING TOWARDS 2035
Delivered / Under
construction
1
2026-2030
Target
Third party
solar
Puke Kapo
Hau
Whakamaru
BESS
Ngā Tamariki
or Rotokawa
Waikokowai
or Puketoi
Ngā Tamariki
or Rotokawa
Wind project
Generation output (TWh)
Mercury national demand growth
scenario assumes 5TWh growth
from 2030 to 2035. Generation
advanced as demand firms.
Scale and timing remain flexible.
+1.5 TWh
+1.0
+0.5
Third party solar optionality
3.5TWh target supported by staged development options
PROGRESSING TO FID
ADVANCED DEVELOPMENT
ADDITIONAL TIMED OPTIONS
+0.0
(100MW Capacity)
Planned to
2035
5.0
37
FID ACHIEVED
+0.53
1
Including the Hydro rehab uplift
MERCURY FULL YEAR RESULTS FY26
MERCURY’S LONG TERM TRACK RECORD
1068
0
200
400
600
800
1,000
1,200
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
$m
Financial Year (ending 30 June)
EBITDAF
0
100
200
300
400
500
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
$m
Financial Year (ending 30 June)
OPEX
Operating expenditure
0
100
200
300
400
500
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
$m
Financial Year (ending 30 June)
DISTRIBUTIONS
Share buybackSpecial dividend
Final dividendInterim dividend
-10,000
-5,000
0
5,000
10,000
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
GWh
Financial Year (ending 30 June)
GENERATION VS SALES
ThermalWind (Spot)Hydro
GeoSalesNet position
0
200
400
600
800
1,000
1,200
1,400
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
$m
Financial Year (ending 30 June)
CAPEX
Stay-In-BusinessGrowth
0
50
100
150
200
0
500
1,000
1,500
2,000
2,500
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
$m$m
Financial Year (ending 30 June)
INTEREST COSTS
Net debtInterest expense (RHS)
38
MERCURY FULL YEAR RESULTS FY26
$0
$50
$100
$150
$200
$250
Jul-20
Jan-21
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
Jul-24
Jan-25
Jul-25
Jan-26
Jul-26
$/MWh
FUTURES VS SPOT PRICES
12 Mth rolling OTA Futures price (1 year prior)
12 Mth rolling OTA spot price
Quarterly OTA Futures price (2 years prior)
LONG TERM INDUSTRY TRENDS
0
1
2
3
4
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
EBITDAF ($b)
Financial Year (ending 30 June)
SECTOR EARNINGS
CAGR: 2.1%
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
0
10
20
30
40
50
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
GW
TWh
Financial Year (ending 30 June)
DEMAND AND GENERATION CAPACITY
Demand
Max. Generation Capacity (RHS)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
kT
CO2e
Financial Year (ending 30 June)
CARBON EMISSIONS
0%
5%
10%
15%
20%
25%
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
Annualised Churn (%)
Financial Year (ending 30 June)
ICP CHURN
Total ChurnTrader Churn
50%
60%
70%
80%
90%
100%
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Financial Year (ending 30 June)
RENEWABLES PROPORTION
Source: Company reports, TPIX, MBIE, Pricing Manager (NZX), Electricity Authority
1
Includes trader churn and premise churn – switches caused by customers moving house
2
Switches where a customer changes retailer without changing residence
39
MERCURY FULL YEAR RESULTS FY26
DEMAND REBOUNDS AS TIWAI RESUMES OPERATIONS, DAIRY ELECTRIFICATION CONTINUES
Key messages
•National demand up 2.2%
1
(unadjusted 2.3%) versus
FY25, with Tiwai demand returning after demand
response exercise and increases in dairy sector
demand due to electrification
•Non-Tiwai industrial demand down in FY26 due to
industrial closures associated with the wood
processing and pulp and paper industries, notably:
•Winstone Pulp International shutting down its Karioi
pulp mill and Tangiwai sawmill
•Oji Fibre Solutions’ closure of PM6 at its Kinleith
mill
•Carter Holt Harvey’s closures of its Tokoroa plywood
plant and Eves Valley sawmill
•Irrigation demand higher due to drier conditions in the
Canterbury region
•Sustained growth in electricity demand is anticipated,
driven by the electrification of homes, transportation,
and industrial sectors, alongside the expansion of data
centres
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
UrbanRuralDairyTiwaiIndustrialIrrigation
GWh
FY2022FY2023FY2024FY2025FY2026
SectorGWh
Sector %Total %
Urban
1
+1190.7%0.3%
Rural
1
+180.3%0.0%
Dairy processing+1202.0%0.3%
Tiwai+76718.1%2.0%
Industrial (ex. Tiwai)-218(5.9)%(0.6)%
Irrigation+514.2%0.1%
Other+192.3%0.0%
To t a l
+8762.2%
FY26 NORMALISED DEMAND GROWTH BY SECTOR
Source: Transpower SCADA data, Mercury.
1
Normalised for temperature and number of days
DEMAND
40
---
BETTER
TODAY
BUILDING
TOMORROW
BRIGHTER
TOGETHER
2026 INTEGRATED REPORT
MERCURY NZ LIMITED
Generation at Kaiwaikawe Wind FarmRates now available for customers:
Flex Rates and Flat Rates
Kaiwera Downs Wind Farm becomes
the biggest wind farm in the South
Island after construction concludes
1
ST
2X
#
1
JUNE 2026
JUNE 2026
JULY 2026
Upgrade of Maraetai I, Ātiamuri,
and Ōhākurī hydro stations progressed
with ANDRITZ contract signing
Committed to geothermal
appraisal drilling for two projects
Karāpiro Hydro Station
refurbishment completed
The equivalent number of homes
powered following Ngā Tamariki
Geothermal Station upgrade
$
590M
$
75M
$
90M
55K*
AUGUST 2025
MARCH 2026
APRIL 2026
MAY 2026
DELIVERING REAL PROGRESS
*Based on annual average home use of 7000kWh.
MENU MERCURY 2026 INTEGRATED REPORT
STATEMENT FROM THE DIRECTORS
The directors are pleased to present Mercury NZ
Limited’s Integrated Report and Financial Statements
for the year ended 30 June 2026. The Auditor-
General is required to be Mercury’s auditor and
has appointed Emma Winsloe of Ernst & Young
to undertake the audit on his behalf.
This Integrated Report is dated 18 August 2026
and is signed on behalf of the Board by:
02 WHO WE ARE
03 HOW WE CREATE VALUE
TĀ MĀTOU UARA
04 OUR BUSINESS MODEL
05 DELIVERING ON OUR STRATEGIC OBJECTIVES
06 OUR UPDATED STRATEGIC FRAMEWORK
08 CHAIR LETTER
10 CHIEF EXECUTIVE LETTER
12 SHAPING OUR PRIORITIES
TUIA Ā TĀTOU WHĀINGA
13 ENGAGING WITH IWI AND
KEY STAKEHOLDERS
14 THE RISKS WE FACE
15 PULLING IT ALL TOGETHER
16 HOW WE DELIVER VALUE
TE PĒWHEA O TĀ MĀTOU TUKU HIRA
17 KAITIAKITANGA / STEWARDSHIP
19 KIRITAKI / CUSTOMER
21 KŌTUITANGA / PARTNERSHIPS
22 NGĀ TĀNGATA / PEOPLE
24 ARUMONI / COMMERCIAL
26 LOOKING AT THE NUMBERS
TITIRO KI NGĀ TATAU
28 FINANCIAL COMMENTARY
29 FINANCIAL TRACK RECORD
30 INDEPENDENT AUDITOR’S REPORT
34 GROUP FINANCIAL STATEMENTS
38 NOTES TO FINANCIAL STATEMENTS
65 CLIMATE STATEMENT
TE TAUĀKI ĀHUARANGI
67 INTRODUCTION
68 STRATEGY
86 METRICS & TARGETS
89 GOVERNANCE
93 RISK MANAGEMENT
94 GREENHOUSE GAS EMISSIONS INVENTORY
103 INDEPENDENT LIMITED ASSURANCE REPORT
107 LEADERSHIP AND GOVERNANCE
MANA WHAKAHAERE
108 YOUR BOARD OF DIRECTORS
110 YOUR EXECUTIVE LEADERSHIP TEAM
111 CORPORATE GOVERNANCE
112 WORKFORCE OF THE FUTURE
114 REMUNERATION REPORT
124 DIRECTORS’ DISCLOSURES
126 SECURITY HOLDER INFORMATION
127 BONDHOLDER INFORMATION
130 COMPANY DISCLOSURES
131 OTHER DISCLOSURES
134 GLOBAL REPORTING INITIATIVE (GRI) INDEX
137 INFORMATION FOR SHAREHOLDERS
138 DIRECTORY
139 GLOSSARY
ROBERT HAMILTON
CHAIR, AUDIT AND FINANCIAL RISK COMMITTEE
SCOTT ST JOHN
CHAIR
ABOUT THIS REPORT
Mercury is committed to providing the full picture—
transparent disclosures in easily understood,
comparable and engaging ways so that we meet
the expectations of our many stakeholders.
This is an Integrated Report which follows the
Integrated Reporting <IR> framework.
We describe Our Business Model including inputs,
outputs, and the outcomes of our strategic approach
across our five FY35 aspirations that determine how
we generate long-term value. We include a specific
Global Reporting Initiative (GRI) Index and
comprehensive climate disclosures, which align
with the Aotearoa New Zealand Climate Standards.
We have grouped our reporting into six sections to
help you find areas of particular interest. They are all
part of who we are, what we do, and why. Across all
this, our aim is to report openly and honestly on our
performance in a way that shows the integrated
approach we take.
CONTENTS
If you have any comments about this report,
including things we could do better, please email
investor@mercury.co.nz.
REPORTING SUITE
This report should be read in conjunction with
other materials that comprise our FY26 annual
reporting suite:
s FY26 Full Year Results Presentation
s FY26 Corporate Governance Statement
s FY26 Climate Action Plan
These materials are available on our website.
BETTER TODAY
Our disciplined execution is ensuring
a resilient performance now.
BUILDING TOMORROW
Our performance is funding renewable
investment at scale.
BRIGHTER TOGETHER
Our execution delivers shared value for
our customers, communities, investors,
and Aotearoa New Zealand.
1MERCURY 2026 INTEGRATED REPORT |MENUCONTENTS
CONTENTS
KARĀPIRO
ARAPUNI
WAIPĀPA
MARAETAI
I AND II
WHAKAMARU
ŌHĀKURĪ
ĀTIAMURI
AR AT IAT IA
NGĀ AWA
PŪRUA
+
LAKE TAUPŌ
ROTOKAWA
+
MŌKAI
+
KAWERAU
NGĀ TAMARIKI
MAHINERANGI
KAIWERA
DOWNS
TURITEA
TARARUA
WAIPIPI
KAIWAIKAWE
++
Mercury’s generation assets
produce electricity from 100%
renewable sources: hydro,
geothermal, and wind. We also
retail electricity, gas, broadband,
and mobile services.
We have nine hydro power stations along the
Waikato River, five geothermal stations in the
northern part of the Central Plateau, and five wind
farms in the Manawatū, South Taranaki, Otago,
and Southland regions.
During the year, we completed the expansion of Ngā
Tamariki Geothermal Station, near Taupō, which is
now fully operational. We also completed Stage 2 of
Kaiwera Downs Wind Farm, with final commissioning
activities underway. Meanwhile, Kaiwaikawe Wind
Farm, near Dargaville, is on track to become fully
operational by the end of 2026.
The electricity we generate is sold on the wholesale
market. Our retail arm buys electricity from this
market to supply businesses and households across
New Zealand.
We sell our multi-product utility services through
our retail operations to residential and small-to-
medium-sized business customers. Our commercial
sales team services industrial and wholesale
customers offering electricity. Our sub-brand
GLOBUG is our legacy pre-pay electricity product
for residential customers.
WHO WE ARE
HYDRO S TATIONSWIND FARMS
GEOTHERMAL STATIONS
+ not 100% owned by Mercury ++ under construction
2MERCURY 2026 INTEGRATED REPORT |MENUWHO WE ARE
WHO WE ARE
HOW WE CREATE VALUE
TĀ MĀTOU UARA
In this section we highlight factors that affect our ability
to create value over time (our business model) and show
how we have performed against our FY26 objectives.
We share our updated strategic framework, and our
Chair Scott St John and Chief Executive Stew Hamilton
summarise our 2026 financial year.
Our Chair Scott St John reports on how we are helping
power economic growth in Aotearoa through our contribution
to the fastest rate of renewable generation development
in New Zealand’s history.
We present our updated strategic framework,
encompassing a strengthened focus on Ngā
Tāngata / People, evolving our Kōtuitanga /
Partnerships aspiration, and the refresh of
several strategic measures and initiatives.
We demonstrate the progress made in FY26
through delivering on our strategic objectives.
Our business model demonstrates how we
operate—our inputs, outputs, and outcomes.
Our Chief Executive Stew Hamilton
highlights how disciplined execution,
building renewables on time and on budget,
and delivering shared value through the
energy transition by empowering customers
and communities, contributed to this
year's results.
READ MORE PG4
READ MORE PG10READ MORE PG6READ MORE PG8
3MERCURY 2026 INTEGRATED REPORT |MENUHOW WE CREATE VALUE
HOW WE CREATE VALUE
OUR BUSINESS MODEL
This diagram shows the key inputs of our business across
our five drivers of value, our business activities, and our
outputs (products, services and byproducts).
The outcomes of our activities and outputs are covered in detail
throughout the report. Our broader strategy, how we are working
towards realising our purpose and achieving our FY35 aspirations,
is covered on pages 6 and 7.
INPUTSOUTCOMESOUTPUTS
(As at 30 June 2026)(As at 30 June 2026)
GWh hydro
generation
4,452
customer market
share (by ICP)
1
25%
GWh geothermal
generation
2,622
customers with two
or more services
231K
Total Recordable
Injury Frequency
Rate (TRIFR) (down
29.1% on FY25)
0.31
GWh wind
generation
1,995
tonnes CO
2
e Scope
1 emissions produced
196K
tonnes CO
2
e Scope 1
emissions captured
and reinjected
13K
generation
market share
19%
MW new
capacity built
354
OUR BUSINESS ACTIVITIES
O
U
R
V
A
L
U
E
S
S
T
R
A
T
E
G
I
C
F
R
A
M
E
W
O
R
K
G
O
V
E
R
N
A
N
C
E
OUR
PURPOSE
Tiakina te anamata, mā te
tūhono i ngā tāngata me
ngā wāhi o te inamata.
Taking care of tomorrow:
connecting people and
place today.
C
A
R
E
•
C
U
R
I
O
U
S
•
C
O
M
M
I
T
•
C
O
N
N
E
C
T
1
Includes mass market, commercial, and industrial connections.
KIRITAKI
CUSTOMER
NGĀ TĀNGATA
PEOPLE
405 in Auckland
406 in Taur anga
139 in Hamilton
79 in Rotorua
63 in Oamaru
209 rest of NZ
permanent employees
total customer
connections
1
generation assets
1,301
941K
19
KAITIAKITANGA
STEWARDSHIP
KŌTUITANGA
PARTNERSHIPS
ARUMONI
COMMERCIAL
current investment in
renewable generation
development
geothermal joint
ventures with Tūaropaki
Trust
2
and Tauhara
North No. 2 Trust
3
of our FY26 EBITDAF
reinvested in new and
existing generation
assets
formal iwi relationships
63K shareholders
3K bondholders
Extensive partnerships
across customer,
supplier and operating
communities
66%
8
$1B
2
KAITIAKITANGA
STEWARDSHIP
READ MORE PG17
KIRITAKI
CUSTOMER
READ MORE PG19
KŌTUITANGA
PARTNERSHIPS
READ MORE PG21
NGĀ TĀNGATA
PEOPLE
READ MORE PG22
ARUMONI
COMMERCIAL
READ MORE PG24
590K electricity
109K gas
193K broadband
49K mobile
Natural resources
(water, steam, wind)
Thermal resources on-
sold (gas)
2
Tūaropaki Trust is the collective hapū in the Mōkai area who have direct whakapapa connections
to Raukawa and Ngāti Tūwharetoa. The hapū are Ngāti Hā, Ngāti Parekawa, Ngāti Tarakaiahi,
Ngāti Te Kohera, Ngāti Wairangi.
3
Tauhara North No.2 Trust is an Ahu Whenua Trust (Māori land trust) within the tribal
region of Ngāti Tahu – Ngāti Whaoa with whom Mercury has a long-standing relationship.
4MERCURY 2026 INTEGRATED REPORT |MENUHOW WE CREATE VALUE
DELIVERING ON OUR STRATEGIC OBJECTIVES
Generation development upliftConstruct new
renewables
Completed Ngā Tamariki Geothermal Station expansion.
Completed construction of our $486m Kaiwera Downs Stage 2 Wind Farm, with final commissioning activities underway.
Advanced construction of our $287m Kaiwaikawe Wind Farm, with first generation occurring in July 2026. It is on track to be fully
operational by the end of 2026.
Grow pipeline
Progressed Puke Kapo Hau (Mahinerangi Stage 2) Wind Farm and Stage 1 of Whakamaru Battery Energy Storage System (BESS)
towards financial investment decisions.
Progressing Waikokowai and Puketoi Wind Farms. Waikokowai, Puketoi, and Tararua (Repower) Wind Farms listed in Fast-track
approvals legislation.
Two projects at Ngā Tamariki and Rotokawa extensions entering feasibility, supported by committed appraisal drilling, with first
generation targeted for 2030.
Capture energy transition growthElectrify C&I
customers
Commenced 10-year contracts with Fonterra of ~260 GWh p.a. to support the electrification of their Edgecumbe and Waitoa sites.
Increase flexibility
Advanced our smart hot water control programme, resulting in 50,000 cylinders (20MW) under management over winter.
Progressed Whakamaru BESS to procurement stage.
Rebuild sector confidence Provide constructive
contributions
Supported more timely and certain consent processes for renewable projects, including inclusion of renewable electricity in draft
RMA replacements and in Fast Track priorities.
Actively contributed to solutions for gas and firming challenges, including supporting the Huntly Firming Option, and boosting the
hedge market to support vibrant competition, including supporting trading of super peak products.
Supported BCG Energy to Grow report.
Increase transparency
Actively supported legislated changes to improve gas market transparency. Supported greater international context through
international speaker series. Supported industry Powering Change relaunch.
Connected and
high-performing culture
Cultural performance
uplift
Launched the Safety Intelligence Programme, a practical framework designed to raise the standard of workplace safety by making
safety clear, human, and effective, and embedding capability into everyday practice. Improved business performance by lifting
Cultural Performance Index score by 5%.
Alignment to strategy
Embedded new strategic framework in business with measurements in place. Revised our executive remuneration construct
to ensure it incentivises the level of performance needed to deliver our strategy and long-term shareholder value.
Earnings transformationRevenue growth
Delivered a strong EBITDAF performance for the year, exceeding initial full year guidance by $68m, and continued
to reinvest at scale with 66% of FY26 EBITDAF reinvested in new and existing generation assets.
Core optimisation
Focused on disciplined cost management with OPEX target of $370m and SIB CAPEX target of $150m achieved with no
material detriment to quality or safety outcomes.
This table shows how we have performed against our strategic objectives set in FY26.
Key: Met expectation for FY26 Minor variance from expectation for FY26 Did not meet expectation for FY26
FY30 STRATEGIC OBJECTIVE KEY INITIATIVES FY26 PROGRESS FY26 OUTCOMES
5MERCURY 2026 INTEGRATED REPORT |MENUHOW WE CREATE VALUE
OUR UPDATED STRATEGIC FRAMEWORK
Each year we update our strategic framework to provide clarity
on the areas that matter most to our business and the work
that we are currently focused on, to ensure we are set up
to succeed over the long term.
We think about our strategic delivery over different
time horizons, ensuring that our short-term areas
of focus are informed by our long-term direction of
travel. Our strategic framework shows why we exist
and what we are focused on to continue to grow and
create value over time.
FY35 ASPIRATIONS
Our interconnected FY35 aspirations expand on our
purpose and provide a long-term direction for our
business that reflects the change and growth that
we aspire to achieve over the areas that matter most
to our business.
FY30 PRIORITIES
Our FY30 priorities are aligned with our FY35
aspirations, reflecting the enterprise-wide focus
areas we must deliver on to position ourselves
for long-term success.
STRATEGIC OBJECTIVES
Our strategic objectives capture the more specific
areas we are focused on now to take our business
forward. These include our key measures and key
initiatives that we actively monitor to track how we
are progressing. These have been updated to ensure
we are focused on the right things for the next
financial year.
KEY CHANGES IN FY27
s Strengthened our Ngā Tāngata / People focus
on performance and connection and introduced
new measures and initiatives focused on
engagement, health, safety, and wellbeing.
The inclusion of Engagement Index and Safety
Citizenship measures reinforces our belief that
the health, safety and wellbeing, and active
engagement of our people are fundamental
to our long-term success.
s Evolved the strategic objective within our
Kōtuitanga / Partnerships aspiration from
“Rebuilding sector confidence” to “Earn trust
and enable growth.” This shift acknowledges
the work done in recent years to strengthen
confidence in the sector and reflects a more
forward-looking focus on ensuring Mercury is
recognised as a trusted participant that builds
enduring partnerships and enables growth
and future opportunities for Aotearoa.
s Refreshed several strategic measures and
initiatives to better reflect our next phase of
focus. For example, following the successful
integration of Trustpower into our customer
business, we have introduced a measure in
Kiritaki / Customer to lift our customer business'
contribution to enterprise value. To enable this,
we will embark on work to transform our
customer business.
MARAETAI HYDRO STATION
6MERCURY 2026 INTEGRATED REPORT |MENUHOW WE CREATE VALUE
ASPIRATIONS
FY35FY30
PRIORITIESSTRATEGIC OBJECTIVESKEY MEASURESKEY INITIATIVES
Generation
development
uplift
Deliver more reliable and
renewable energy
Taking care of our generation
assets and actioning options
for growth.
KAITIAKITANGA
Stewardship
Our assets and the natural
environment are thriving.
Plan to deliver 3.5TWh of
new generation by 2030
Grow pipeline to >8TWh
by 2030 incl 1.5TWh of Geo
Protect and enhance
our assets
Geothermal and wind
platform development
Electrify and attract
large users
Strengthen compliance
and risk foundations
Constructive
engagement with key
partners and investors
Earnings
transformation
Achieve what matters most
through financial growth
Achieving sustainable
performance to invest in
the future and drive value.
ARUMONI
Commercial
We are leaders
in commercial growth.
Lift FY30 EBITDAF
to $1.2-$1.25 billion
Deliver operating cost cap
of $370m p.a. FY26-28
Grow portfolio
options and flexibility
Work Worth Doing
(operational excellence)
Capture energy
transition growth
Accelerate the shift
to a low-carbon future
Leading the transition by creating
solutions for customers to electrify
and support the development of a
smart energy system.
KIRITAKI
Customer
Customers are at the heart
of what we do.
1TWh of new demand by 2030
Retail efficiencies and growth
increase enterprise value by
1.5% by 2028
Future Fit Retail
business
Connected and
high-performing
culture
Perform with an inclusive,
connected culture
Unleashing an inclusive, curious
and connected culture to lift
business performance.
N GĀ TĀN GATA
Our People
We learn and grow to realise
our full potential.
Engagement Index, lift 3%
from 2026 baseline
Safety Citizenship Maturity
of >3.9
Leaders Worth
Following (Framework)
Culture Worth
Belonging (talent
and people strategy)
Earn trust and
enable growth
through
partnerships
Create success with others
Having a deliberate focus
on deepening trust with
key relationships to achieve
shared goals.
KŌTUITANGA
Partnerships
We are the trusted partner
of choice.
2% baseline lift in ability
to meet transition needs
All policy shifts ensure
competitive neutrality
OUR FY27 STRATEGIC FRAMEWORK
7MERCURY 2026 INTEGRATED REPORT |MENUHOW WE CREATE VALUE
CHAIR LETTER
Mercury is helping power New Zealand’s next phase of growth
through disciplined investment in renewable generation, system
resilience, and long-term customer value.
I am proud of the role Mercury plays, not just in
delivering an essential service, but in helping build
the energy system Aotearoa will need for the
decades ahead.
Our significant investment in renewable generation
is supporting the fastest rate of renewable
development in New Zealand history, helping meet
future demand growth, strengthen resilience, and
support economic prosperity.
With the sector on track to deliver more than 98%
renewable electricity by 2030, there is a significant
opportunity to lift New Zealand’s total renewable
energy use across the wider energy system from the
low base of around 30% today. This includes moving
more of our transport, heating, and existing industry
to electricity, and supporting new industries to
develop in New Zealand.
BUILDING A RESILIENT ENERGY FUTURE
I am optimistic about the country’s future powered
by an increasingly renewable supply and encouraged
by the Government’s focus on clearing the path for
the private sector to keep delivering more renewable
energy for New Zealand.
The market can deliver on the transition to a
low-carbon renewable energy system, but there are
challenges. Our focus is on providing constructive
solutions that help the sector evolve, and undertaking
consistent and meaningful action, in collaboration
with industry.
Having a reliable electricity system through dry years
is a key focus. We believe harnessing a mix of solutions
is the best, lowest cost way to ensure this.
Another area of focus is ensuring electricity remains
affordable and accessible for households and
businesses as the transition progresses.
A major driver of household electricity price increases
now and into the future is regulated lines and
transmission increases. We have engaged with
the Commerce Commission on the need to balance
investment and minimise price shocks, as well as
promote investment in the smart system. Ultimately,
the development of a smarter electricity system,
with greater use of things like batteries, could mean
less network investment is needed.
DELIVERING LONG-TERM VALUE
The Board has endorsed small updates to our
strategic framework. We believe these changes
position Mercury well to continue to deliver on
our strategic ambitions.
MERCURY CHAIR
SCOTT ST JOHN
NGĀ TAMARIKI GEOTHERMAL STATION
8MERCURY 2026 INTEGRATED REPORT |MENUHOW WE CREATE VALUE8
Achieving our ambitions requires disciplined
allocation of shareholders' capital. The Board's
focus is on balancing investment in existing assets
and new growth with balance sheet resilience,
appropriate financial headroom, and sustainable
shareholder returns.
This enables us to continue to fund renewable
investment at scale, deliver sustainable shareholder
returns, and provide value for our customers,
communities, and Aotearoa over the long-term.
LEADERSHIP AND GOVERNANCE
To enable Mercury to achieve its strategic goals, the
Board strives to include an effective combination
and diversity of skills, backgrounds, and experiences.
Lorraine Witten, James Miller, and Mike Taitoko
stepped down from the Board in September 2025.
I want to sincerely thank each of them for their
significant contributions during their tenures
with Mercury.
In August 2025, we welcomed Rachel Taulelei
to the Board, bringing deep experience in governance,
business, Māori and stakeholder relationships, and
broader sustainability. We also welcomed Jasper
Van Halder, our sixth Future Director under the
Institute of Directors Future Directors Programme,
in December. Meanwhile, in August 2026, we
appointed Scott Scoullar as a director. He will join
the Board in September 2026. Three new Executive
leaders also joined Mercury in FY26, as outlined in
the Chief Executive Letter.
During the year, the Board approved a new executive
remuneration framework following an independent
review and engagement with some of our key
investors. The framework aims to incentivise the level
of performance needed to deliver on our strategy and
long-term shareholder value.
FULL-YEAR DIVIDEND
We are pleased to declare a fully-imputed final
dividend of 17.0 cents per share (cps). This brings
the full-year ordinary dividend to 27.0 cps, up 13%
on prior year (from 24.0 cps), marking our
eighteenth consecutive year of ordinary dividend
growth. Our FY27 ordinary dividend guidance is
29.0 cps, representing a 7% increase on FY26,
and the nineteenth consecutive year of ordinary
dividend increases.
SCOTT ST JOHN
CHAIR
Ngā mihi nui,
1 7.0CPS
FINAL DIVIDEND DECLARED
We will review our dividend policy and broader capital
allocation settings over the next 12 months as
earnings, cash flow, and investment requirements
evolve. No outcome has been predetermined, with our
current policy remaining in place during the review.
IN CLOSING
I want to acknowledge our Chief Executive
Stew Hamilton, the Executive Leadership Team, and
wider Mercury for the significant progress made over
FY26 towards realising our ambitions.
The year reflects strong execution across major
projects, operational delivery, and the continued
development of the capability required for Mercury's
next phase of growth.
The transition will continue to present challenges,
particularly around affordability, reliability, and policy
settings. Mercury is well positioned to respond
through disciplined investment, a strong portfolio,
and a clear focus on execution.
Thank you to our people, owners, partners,
and stakeholders for your continued support.
The business has continued to deliver operationally,
invest in the renewable generation New Zealand will need,
and maintain the financial discipline required to support
long-term value creation.
9MERCURY 2026 INTEGRATED REPORT |MENUHOW WE CREATE VALUE
CHIEF EXECUTIVE LETTER
Resilient earnings, disciplined execution, and a strong balance
sheet are enabling us to deliver value for our customers,
communities, investors, and New Zealand.
When I look back on FY26, I am encouraged by the
significant progress the Mercury team has made
towards realising our long-term ambitions through
the execution of our strategy, and clear focus on
the areas of: Better Today, Building Tomorrow,
and Brighter Together.
BET TER TODAY
Strong performance shaped
by disciplined execution
FY26 was a year of strong operational delivery,
disciplined cost management, and continued
investment across the business. We progressed
major renewable projects and delivered resilient
financial performance, supported by the strength
of our integrated portfolio and the contribution
of our people.
Total generation for the year was 9,070GWh, an
increase of 1,163GWh or 15% from the prior year. The
increase reflected higher hydro generation following
stronger inflows, together with increased geothermal
generation from the recently commissioned fifth
generating unit at Ngā Tamariki, and increased
wind generation from Stage 2 of the Kaiwera Downs
Wind Farm.
EBITDAF of $1,068 million, up $282 million on FY25,
was supported by above-average hydro generation,
higher renewable output and lower operating costs
from ongoing productivity initiatives.
Net profit after tax was $321 million, up $320 million
on FY25. This increase was primarily a result of higher
EBITDAF, partly offset by non-cash movements in the
fair value of electricity derivatives.
Trading margin increased by $268 million to
$1,421 million, driven by higher generation volumes
and improved sales yields, partly offset by lower
electricity prices. Operating costs decreased by
$26 million to the targeted level of $370 million
through active cost management, despite
inflationary pressures.
Importantly, this performance has supported
significant reinvestment in the assets New Zealand
will need for the future, with 66% of our FY26 EBITDAF
reinvested in new and existing generation assets.
Our capital expenditure totalled $710 million, with
$150 million spent on stay-in-business projects and
$560 million spent on growth capital.
We have completed or are nearing completion of
around $1 billion of investment in new renewable
generation across three major builds—the Ngā
Tamariki Geothermal Station expansion, and the
Kaiwera Downs 2 and Kaiwaikawe Wind Farms.
Together, they represent 1.1TWh of new renewable
generation—the equivalent of powering approximately
160,000 additional homes.
As these projects move to full operation, they
strengthen our earnings base, enabling us to fund
growth on balance sheet within clear financial
guardrails. As a result, we can continue to deliver
value for our customers, communities, investors,
and New Zealand.
Our FY27 EBITDAF guidance has been set at
$1,075 million. Guidance may change and remains
subject to any material events, significant one-off
expenses, or other unforeseen circumstances
including changes to hydrological conditions. FY27
stay-in-business CAPEX guidance is $150 million.
BUILDING TOMORROW
Funding renewable investment at scale
I am proud that Mercury is backing the energy
transition with action. It is heartening to see Aotearoa's
electricity grid reach over 90% renewable at times.
MERCURY CHIEF EXECUTIVE
STEW HAMILTON
As we continue to invest, build, and grow, there is a
huge opportunity to support economic growth for
New Zealand through access to renewable electricity.
We are on track to deliver on our plan of adding
3.5TWh of new generation by 2030 (the equivalent
of powering an additional 500,000 homes) through
leveraging our strengths in wind and geothermal,
and our high-quality project pipeline.
During the year, we completed the expansion of
Ngā Tamariki Geothermal Station, which is now
fully operational. We also completed the construction
of Stage 2 of Kaiwera Downs Wind Farm, with final
commissioning activities underway.
Meanwhile, Kaiwaikawe Wind Farm began delivering
electricity to the grid in July 2026 and is on track
to be fully operational by the end of 2026. The
completion of Kaiwaikawe Wind Farm in 2027 will
mark the conclusion of these three major builds.
Our next development will be Puke Kapo Hau
(Mahinerangi Stage 2) Wind Farm, west of Dunedin.
In August 2026, Mercury’s Board approved the $506
million project. Final grid connection studies are being
completed with Transpower. Mahinerangi Wind Farm
(Stages 1 and 2) is expected to be New Zealand’s
largest wind farm once complete, with 228MW total
capacity and annual generation of 646GWh.
Moving forward, we are focused on scaling our
geothermal platform, alongside our wind platform.
This will strengthen our renewable portfolio,
and support long-term contracting with major
energy users. It will also help meet Aotearoa's
growing demand for affordable, reliable, and
renewable electricity.
We have up to 5TWh of conventional geothermal
options across multiple, diverse, scalable reservoirs and
horizons, 2.5TWh of which are in active development,
including 1TWh entering feasibility. This gives us a
staged and repeatable pathway for future renewable
baseload growth. Next-generation geothermal
technologies, such as superhot geothermal,
provide further potential from around 2035.
KEY FINANCIALS
$1,068M
EBITDAF
$321M
NET PROFIT
$370M
OPERATING EXPENDITURE
10MERCURY 2026 INTEGRATED REPORT |MENUHOW WE CREATE VALUE
We recognise the high cost of living continues to
impact New Zealand consumers and businesses.
We are responding with tailored support for
customers and communities, while continuing
to invest in renewable generation that is expected
to support lower-cost supply over time.
Our care for households includes providing direct
support for our customers experiencing hardship
and collaborating with community partners to ensure
comprehensive support for those most in need.
We also continue to provide material support to
social retailers, Nau Mai Rā and Toast Electric, and
community organisations, extending care beyond our
own customer base.
Longer-term contracts are a key way we are
supporting businesses. These provide businesses
certainty of cost and a guaranteed fuel source for
their operations, and give us confidence to keep
investing in renewables.
In FY26, we celebrated the commencement
of long-term contracts with Fonterra, Visy, and
Whakatāne Mill.
We also signed a 15-year, 140MW, 1.2TWh per year
power purchase option agreement (PPOA) with
Datagrid for its AI Factory in Southland, supporting
new demand and AI infrastructure growth in
New Zealand. The PPOA reflects that the data centre
is currently in the development phase and gives
flexibility in advance of a final investment decision.
Following this, in July 2026, we invested NZ$53
million for a 12.7% minority equity stake in
Datagrid NZ, strengthening our position alongside
one of Aotearoa's most advanced large-scale
digital infrastructure projects and supporting
long-term renewable electricity demand growth.
The investment is funded from existing capital
facilities and within capital management settings.
As electricity demand grows, our focus is on
bringing forward new renewable generation to
support that growth, while continuing to maintain
reliable electricity for homes, businesses, and
communities across the country.
STEW HAMILTON
CHIEF EXECUTIVE
Over FY27-FY28 we will undertake $75 million in
geothermal appraisal drilling for the two projects at
Ngā Tamariki and Rotokawa, with first generation
targeted for 2030. This phase of geothermal growth
could include up to $1 billion investment and 1TWh
of new geothermal generation (the equivalent of
powering an additional 142,000 homes).
Hydro refurbishment remains another major focus.
During the year, we committed to the next phase
of our multi-year programme—the $590 million
upgrade of Maraetai I, Ātiamuri, and Ōhākurī
hydro stations. We have also begun a $29.6 million
four-year refurbishment of Maraetai II Hydro Station.
Ensuring a reliable system
Building more renewable generation is essential
for New Zealand’s future electricity system, but it
is not the whole answer to reliability (or keeping the
lights on). Dry-year resilience remains a key system
challenge, and in our view the best, lowest-cost
response is likely to be a mix of solutions: renewable
overbuild, demand response, flexible backup supply,
storage, and appropriate firming arrangements.
We are engaging constructively with Government,
regulators, and the wider sector on reliability
settings, including proposals for additional firming
and winter energy security. Our focus is on practical
solutions that support reliability and affordability
while preserving the investment signals needed
to keep enabling renewable development.
BRIGHTER TOGETHER
Delivering value for customers and communities
In June, we launched Flex Rates, time-of-use (TOU)
plans, which give residential customers and small
and medium-sized business customers greater control
over electricity spend. Our smart hot water control
programme has also progressed, with 50,000 cylinders
(20MW) under management over winter 2026.
A connected, high-performing culture
Our people are central to delivering Mercury’s strategy.
During FY26, we welcomed three new executive
leaders, Catherine Thompson as Chief Sustainability
Officer (now Chief Strategy and Corporate Affairs
Officer), Michele Mauger as Chief People Officer,
and Suraiya Phillimore-Smith as Chief Customer
Officer. Each bring strong leadership experience
and capability to our team.
Michele is leading the development of a people
strategy designed to ensure our culture, capability,
and ways of working enable Mercury’s long-term
ambition. One aspect of this is introducing an
Employee Share Scheme and an enhanced employee
product offering, which will enable our people to
understand first-hand what it is like to be both
a Mercury shareholder and a customer.
Health, safety, and wellbeing remains another major
focus. In FY26, we launched a Safety Intelligence
Programme, a practical framework designed to raise
the standard of workplace safety by making safety
clear, human, and effective, and embedding capability
into everyday practice. Our 12-month rolling Total
Recordable Injury Frequency Rate (TRIFR) was 0.31,
down 29.1% on FY25.
CLOSING REMARKS
Looking ahead, our refreshed strategic framework
gives us a clearer focus on the capabilities,
partnerships, and performance needed for our next
phase of growth.
We believe these changes position us well to keep
delivering value for our customers, communities,
investors, and New Zealand.
Ngā mihi nui,
WAIPIPI WIND FARM
We are on track to deliver on our plan of adding 3.5TWh of
new generation by 2030 through leveraging our strengths in
wind and geothermal, and our high-quality project pipeline.
11MERCURY 2026 INTEGRATED REPORT |MENUHOW WE CREATE VALUE
In this section we look at how we have engaged with iwi, Māori and
key stakeholders, and then responded to what we have learned, as
well as the trends we have seen in our key risk areas in FY26.
SHAPING OUR PRIORITIES
TUIA Ā TĀTOU WHĀINGA
Building and maintaining relationships with iwi, Māori
and stakeholders across our business contributes to our
long-term success.
We have six key risk areas, ranging from
health, safety and wellbeing to operational
and financial risks.
We have reduced and refined our material
topics from FY25 to ensure they capture what
is really important to us and our stakeholders.
We then cover how these risks and insights, as well as key
opportunities and other external factors, combine to form
our materiality assessment.
READ MORE PG14
READ MORE PG15READ MORE PG13
12MERCURY 2026 INTEGRATED REPORT |MENUSHAPING OUR PRIORITIES
SHAPING OUR PRIORITIES
s Regular written updates, such as project
updates to local communities and quarterly
trading updates to investors.
s Online surveys and audits, such as monthly
customer satisfaction surveys sent to a
representative sample of customers, modelled
against our market segmentation approach.
Customer satisfaction is based on the
percentage of respondents scoring their overall
experience with Mercury 8–10 out of 10.
The feedback we have received through
engagements has helped inform the business
activities covered in How We Deliver Value.
These insights, shared through key relationship
holders across our business, have also contributed
to our FY26 Materiality Assessment.
ENGAGING WITH IWI AND KEY STAKEHOLDERS
Building and maintaining relationships with iwi, Māori and
stakeholders across our business is fundamental to our ability
to create value and contributes to our long-term success.
We aim to understand the needs and priorities
of iwi, Māori and key stakeholders. This guides our
resource allocation to business activities and informs
our strategy and business plans.
By customising engagement methods to meet specific
needs and preferences, we can gather richer, more
meaningful data than taking a one-size-fits-all approach.
These engagement methods include:
s One-on-one meetings in person and/or online.
s Group meetings in person, such as community
co-design forums and stakeholder events.
s Governance-level engagement, such as
Board-to-Board hui with iwi partners.
s Attendance at national and sometimes
international events with iwi partners.
KEY GROUPS WE WORK WITH:
CUSTOMERSEMPLOYEESPARTNERSINVESTORS
GOVERNMENT
AND REGULATORS
INDUSTRY
PARTICIPANTS
COMMUNITYSUPPLIERSIWI
MANA WHENUA, NGĀTI TAHU NGĀTI WHAOA, LED THE NGĀ TAMARIKI
GEOTHERMAL STATION GROUNDBREAKING CELEBRATION
TUHONO KI NGĀ IWI ME TE HUNGA WHAI PĀNGA
We gather rich, meaningful data by customising
engagement methods.
13MERCURY 2026 INTEGRATED REPORT |MENUSHAPING OUR PRIORITIES
SHAPING OUR PRIORITIES
THE RISKS WE FACE
This page provides a short summary of the trends and activities over FY26 in our key risk areas.
HEALTH, SAFETY
AND WELLBEING
COMPLIANCE
& REGUL ATORY
REPUTATION OPERATIONAL
FINANCIAL
PEOPLE
We care about the health, safety,
and wellbeing (HS&W) of our
people, our partners, our
customers, and communities.
High-consequence harm events
arising from our operations and
public-facing activities are a
fundamental risk. We continually
seek to grow the capability of our
people and systems to enable safe
and healthy outcomes. We have:
• Prioritised critical risks and
lifesaving controls, leadership
routines, the completion of
enforceable undertaking activities,
and the uplifting of HS&W
capability and maturity, including
through the launch of a Safety
Intelligence Programme.
• Begun building a more structured
approach to psychosocial risk,
aligned to international guidelines
(ISO 45003) and our wider health
and safety systems. The approach
focuses on work-related risk controls,
leader capability, timely support,
and evidence-based governance.
• Continued prioritising process
safety across generating assets,
with WorkSafe accepting safety
cases for all three Major Hazard
Facility geothermal sites as part
of the five-yearly review cycle.
• Begun to implement the hydro
Dam Safety Assurance
Programmes independently
approved in FY25. Implementation
will be completed ahead of early
FY27 regulator verification.
Compliance with resource
consents, along with key
generation and retail regulations,
is important for our continued
ability to operate. Meanwhile,
possible regulatory change and
intervention continues to present
a significant risk. We have:
• Seen several regulatory processes
with potential to have significant
impact on Mercury’s progress,
including new Planning and
Natural Environment Bills, the
Government’s decisions related
to market performance, including
dry year risk mechanisms,
and Competition Task Force
hedge tools and level playing
field requirements.
• Seen regulators remain active
in enforcing compliance
breaches, while the Government
moved to strengthen regulator
powers and increase penalties
for non-compliance.
• Continued to collaborate with
other sector participants on shared
challenges and opportunities
related to the energy transition.
• Experienced increasing scrutiny
of retail electricity prices, gentailer
pricing and competitive neutrality,
which may undermine customer
and stakeholder trust and increase
the risk of further regulatory
or structural intervention.
• Observed growing scrutiny of
vertical integration and the
gentailer model, with potential
for further regulatory or structural
intervention if current measures
do not deliver greater competition
and consumer benefits.
Our priority is maintaining
and growing the trust of a wide
range of stakeholders, which
remains critical to our licence
to operate and ability to grow.
We recognise that:
• Deepening relationships with iwi,
Māori, investors, government
and regulators, and the broader
community is key to achieving
our shared goals.
• Maintaining customer trust remains
critical as cost pressures, electricity
prices, affordability and the energy
transition shape expectations.
We continue to focus on delivering
value and care for all our customers.
• The development, operation,
and refurbishment of generation
assets can affect local communities,
mana whenua, and natural
resources. As a renewable generator,
we strive to show strong
environmental stewardship.
• AI may disrupt our business in
new and unexpected ways, while
also creating opportunities to
improve efficiency, processes,
and customer outcomes. We are
applying the same disciplined
risk assessment and management
approach to AI as we do to other
critical operational areas.
Our key operational risks include
asset management and availability,
fuel availability, market exposure,
cyber security, and significant
business interruption events.
These are critical enterprise
risks because they can materially
disrupt our ability to generate
electricity, deliver telco and
Internet Service Provider (ISP)
services, meet customer and
market commitments, and sustain
revenue. We understand that:
• Our two most significant
operational risks continue to
be the risk of a significant and
extended plant outage (primarily
baseload geothermal), and the risk
of an extended drought (impacting
on lake levels, water flows, and
hydro station operations/outages).
• It is important to continue to
progress our significant hydro
refurbishment programme,
geothermal turnarounds, and
the uplift of our systems in order
to help manage these risks.
• Cyber attacks continue to increase
in frequency and sophistication
globally, and we must continue to
increase security maturity across
IT, operational technology, and
internet service provider
environments.
• The energy transition is increasing
demand for renewable technologies
and skilled labour, creating supply
chain, construction delay, and cost
risks for us. These are amplified
by geopolitical tensions, global
competition, and New Zealand’s
remoteness.
Managing financial risk is crucial
because it helps us safeguard
our assets, earnings, and overall
financial stability in the face of
unpredictable internal and external
challenges. We recognise that:
• Key financial risks include
maintaining balance sheet
resilience, appropriate insurance
cover, and our ability to
execute and fund projects
and new growth initiatives.
• Delays in delivering significant
business initiatives and major
projects as planned can
significantly affect returns,
timing, and future growth.
• Inflation, interest rates, foreign
exchange movements, and
supply chain costs may increase
project and funding costs, reduce
profitability, and put future
generation development and
new business opportunities
at risk if they remain elevated.
• We face counterparty credit risk
across financial and commercial
relationships, managed through
credit limits, monitoring, and
portfolio controls.
• The energy transition creates
supply- and demand-side
financial risks and opportunities,
which we must actively manage
through portfolio settings.
People risks matter because they
directly affect our ability to deliver
strategy, maintain trust, and operate
reliably. We understand that:
• Attracting, developing, and
retaining capable, high-performing
people who can successfully
deliver our strategic priorities
remains critical.
• We face the challenge of an ageing
workforce in several key operational
areas. Attracting capable people
to ensure succession remains a
key priority.
• Providing targeted training and
support to our frontline teams is
fundamental, particularly for those
managing unacceptable customer
behaviours and challenging customer
circumstances. This includes
ongoing de-escalation capability
building and specialist upskilling.
A comprehensive summary is included in Governance at Mercury.
14MERCURY 2026 INTEGRATED REPORT |MENUSHAPING OUR PRIORITIES
PULLING IT ALL TOGETHER
Our FY35 aspiration areas represent the key drivers
of material value creation for our business. These
align to the six capitals of the Integrated Reporting
<IR> framework.
We use these categories to understand how
different resources (input capitals) can either create
or erode value. It also helps us take a holistic view
of our business and understand the broader
environment we operate in.
When thinking about materiality, we consider
both what matters most to our business and
what matters most to iwi/Māori and stakeholders.
Together, these considerations help inform
the framework for our long-term strategy
and near-term business planning.
Reporting on what’s important to us and
our stakeholders also forms the basis of this
Integrated Report.
GATHER DATA
We consider data points including:
• Iwi, Māori and stakeholder
perspectives (page 13)
• External environmental
considerations (pages 8-11)
• Risk assessment insights (page 14)
• Any other factors
REVIEW MATERIAL TOPICS
We review our most material topics,
grouped under our five long-term
aspirations:
• Kaitiakitanga/Stewardship
• Kiritaki/Customer
• Kōtuitanga/Partnerships
• Ngā Tāngata/People
• Arumoni/Commercial
UPDATE MATERIAL TOPICS
Our material topics for FY26
are outlined above and are
reflected in our strategic
processes and the activity
we undertake during the year.
<IR> CapitalsOur FY35 aspiration areasOur material topics
Natural Manufactured
Kaitiakitanga/Stewardship
• Renewables progress
• Asset and environment
stewardship
Social and Relationship
Kiritaki/Customer
• Customer value and experience
• Affordability
Kōtuitanga/Partnerships
• Shared value and
considered outcomes
Human Intellectual
Ngā Tāngata/People
• Connected and high-
performing culture
• Health, safety, and wellbeing
Financial
Arumoni/Commercial
• Disciplined growth
• Operational excellence
MATERIALITY ASSESSMENT
CONTINUOUS APPROACH TO EVALUATING MATERIAL TOPICS
CONTINUED ENGAGEMENT
AND MONITORING
We continue to engage with
iwi, Māori and stakeholders
and monitor the internal and
external environment.
REVIEWING OUR MATERIAL TOPICS
We continuously review our strategy against a broad
context and keep up to date with changes. When
we consider whether our most material topics have
changed, we also evaluate how our approach needs
to evolve to ensure we continue to create value.
The flowchart below outlines the process we have
taken to determine our material topics.
OUR MATERIAL TOPICS
We have determined our material topics and
grouped them by our FY35 aspiration areas.
We have reduced and refined these from FY25
to ensure they capture what is
really important
to us and our stakeholders.
These will be taken into account over the next
financial year as we progress activity against
our strategic priorities.
15MERCURY 2026 INTEGRATED REPORT |MENUSHAPING OUR PRIORITIES
HOW WE DELIVER VALUE
TE PĒWHEA O TĀ MĀTOU TUKU HIRA
In this section, we report on material activity from the past year
which has supported us to progress towards our FY35 aspirations.
sLaunched Flex Rates and advanced
smart hot water control programme.
sCommenced long-term agreements
with Fonterra, Visy, and Whakatāne Mill,
and signed agreement with Datagrid.
sProvided direct support for customers
experiencing hardship and material
support to social retailers, Nau Mai Rā
and Toast Electric.
sStrengthened capability and
performance of our senior leaders
to collectively deliver on our purpose
and strategy.
sMaintained our strong internal
talent pipeline, and refreshed
our talent potential assessment.
sLaunched the Safety Intelligence
Programme.
sActively shaped and contributed to
solutions for gas and firming challenges.
sDelivered Ngā Tamariki expansion with
support from our long-standing partners,
Tauhara North No.2 Trust, and mana
whenua, Ngāti Tahu – Ngāti Whaoa.
sCelebrated 25 years as a five-star partner
of the Starship Foundation, having raised
over $20 million with our customers for
the hospital.
sDelivered resilient earnings, with
FY26 EBITDAF of $1,068 million.
sContinued disciplined growth
through record stay-in-business
and growth CAPEX.
sMaintained strong balance sheet
with growth continuing to be funded
from balance sheet, within clear
financial guardrails.
Completed Ngā Tamariki Geothermal
Station expansion.
Committed to next phase of hydro
refurbishment programme.
Completed construction of Kaiwera Downs Stage
2 Wind Farm.
KAITIAKITANGA
/
STEWARDSHIP
KIRITAKI /
CUSTOMER
N GĀ TĀN GATA /
PEOPLE
KŌTUITANGA /
PARTNERSHIPS
ARUMONI /
COMMERCIAL
Commenced Kaiwaikawe Wind Farm generation.
We reflect on our progress, our successes, and how we have
responded to challenges we have encountered.
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16MERCURY 2026 INTEGRATED REPORT |MENUHOW WE DELIVER VALUE
HOW WE DELIVER VALUE
1. KAITIAKITANGA
/
STEWARDSHIP
We are protecting and strengthening our renewable generation
assets, developing options for future energy growth, and looking
after the natural environment we operate in.
RENEWABLES
Progress made in FY26 / early FY27:
s Completed construction of the new fifth unit at
Ngā Tamariki Geothermal Station on budget and
on time in March. The $220 million expansion
will deliver an additional 390GWh p.a., equivalent
to powering around 55,000 homes.
s Completed construction of our $486 million
Kaiwera Downs Stage 2 Wind Farm, with final
commissioning activities underway.
s Commenced generation at our $287 million
Kaiwaikawe Wind Farm. It is on track to be
fully operational by the end of 2026.
s Committed $75 million to geothermal appraisal
drilling for two projects at existing sites near
Taupō as part of our next phase of geothermal
growth. Together, the projects at Ngā Tamariki
and Rotokawa, could total up to $1 billion
investment and add 1TWh of new geothermal
generation—the equivalent of powering an
additional 142,000 homes. First generation
is targeted for 2030.
s Achieved final investment decision on Puke Kapo
Hau (Mahinerangi Stage 2) Wind Farm. In August
2026, Mercury’s Board approved the $506 million
project. Final grid connection studies are being
completed with Transpower. Mahinerangi
Wind Farm (Stages 1 and 2) is expected to be
New Zealand’s largest wind farm once complete,
with 228MW total capacity and annual generation
of 646GWh.
Looking forward:
We will continue to deliver renewable and reliable
electricity for New Zealand, with particular focus on
growing our wind and geothermal platforms. Scaling
geothermal will strengthen our renewable portfolio,
support long-term contracting with major energy
users, and help meet New Zealand’s growing demand
for affordable, reliable, and renewable electricity.
For more information about our geothermal
growth strategy, see Mercury Geothermal Investor
Day 2026 presentation.
ASSET AND ENVIRONMENT STEWARDSHIP
Progress made in FY26:
s Committed to the next phase of our multi-year
hydro refurbishment programme, a $590 million
upgrade of Maraetai I, Ātiamuri, and Ōhākurī
hydro stations. International technology group
ANDRITZ will supply new turbines, generators,
governors, and electromechanical equipment for
the 13 generating units across the three stations.
s Began $29.6 million four-year refurbishment of
Maraetai II Hydro Station, which will improve the
station’s operational reliability and extend its life
by 20 years.
s Completed the $90 million multi-year
refurbishment of Karāpiro Hydro Station,
increasing its capacity by an additional 16.5MW,
to 112.5MW. The station’s total average annual
output is now 537GWh, producing enough
electricity to power the equivalent of 76,000
homes a year.
KAIWERA DOWNS WIND FARM
17MERCURY 2026 INTEGRATED REPORT |MENUHOW WE DELIVER VALUE
HOW WE DELIVER VALUE
s Advanced our multi-year Taupō Control Gates
refurbishment and inspection programme.
One gate was refurbished in FY26, and we
plan to refurbish another gate in FY27. This is
a $1.4 million investment over FY26-FY27 and
protects a critical control point in the Waikato
Hydro System.
s Successfully completed an eight-well geothermal
drilling campaign to sustain capacity of the
Kawerau, Ngā Tamariki, and Rotokawa fields.
The total cost was $161 million over four years,
$14 million lower than earlier estimated.
s Reduced operational emissions through
initiatives such as capturing and re-injecting
non-condensable gases (NCG) at Ngā Tamariki
Geothermal Station. In FY26 we invested
about $1.3 million in this initiative with an
estimated 13,490 tCO
2
e (Carbon Dioxide
Equivalent) abated.
Challenges encountered and how we
responded:
The natural environment
s Freshwater aquatic weed control and algal
blooms in our hydro lakes remain a challenge.
We are working with Waikato Regional Council,
which is responsible for the water quality
management of the lakes, and with iwi,
government agencies, Waikato River communities,
and others to develop long-term solutions.
s Invasive freshwater gold clams have been found
near our hydro dams. We are following advice from
Biosecurity New Zealand as Aotearoa seeks to limit
the spread of the clams through the river system.
s Practical solutions are needed to support iwi-led
eel transfer programmes, enabling eels to
bypass our hydro dams and return to the sea to
complete their life cycle. We are working with our
river iwi partners and tuna migration specialists
to identify the best options.
Looking forward:
s We will be progressing the next phase of our
hydro refurbishment programme. Planning
has started with refurbishment work scheduled
for 2029-2034. We will also continue the
refurbishment of Maraetai II Hydro Station
and the Taupō Control Gates.
s We are moving to the main works phase of the
Arapuni Hydro Dam Enhancement Project in
FY27. This is a $120 million investment which
involves installing a new underground cutoff
wall to protect the hydro dam from long-term
water seepage.
Emissions targets
In FY26, we updated our emissions reduction targets
to incorporate updated methodology and the
learnings from progressing our initial targets. We now
have a more mature technical evidence base and
a clearer understanding of the delivery challenges
which we have used to inform our updated targets.
Our targets continue to be aligned to our strategy
and informed by Science Based Targets initiative (SBTi)
tools, greenhouse gas accounting principles, and
target-setting principles. We have used SBTi tools
and methodologies that are designed to support
1.5°C-aligned target setting, alongside Mercury’s
modelling, operational assumptions, and insight
from our programme of work to date.
It is our view that by achieving our SBTi-aligned long-
term climate targets, we are playing our part in
contributing to the global effort to limit warming
to 1.5°C.
For information about our emissions reduction
progress and updated targets, see our Climate
Statement 2026.
ARATIATIA RAPIDS
18MERCURY 2026 INTEGRATED REPORT |MENUHOW WE DELIVER VALUE
We continue to focus on delivering value and care for our
customers, both small and large, through the energy transition.
CUSTOMER VALUE AND EXPERIENCE
Progress made in FY26 / early FY27:
s Launched Flex Rates, time-of-use (TOU)
plans which give residential and small and
medium-sized business customers greater
control over electricity spend while managing
load on distribution networks. This was
supported by education and advice to help
households determine if Flex Rates or Flat
Rates will best suit their needs.
s Returned $7 million in value to customers via
Mercury Rewards loyalty programme. Nearly half
a million Free Power Days and 124,000 account
credits were redeemed over FY26. Over half of
our residential customers are now enrolled,
recognised for tenure and rewarded for
engagement across all of our products.
s Brought energy, broadband, mobile, and gas into
a single account, billing and service relationship,
making life simpler for customers. Over 40% of
our customers now have two or more products
with us.
s Surpassed 190,000 customers having fibre or
wireless broadband, and 50,000 customers
having mobile.
s Enhanced our digital self-service tools, helping
customers manage payments, services, and
more with ease. Nearly 70% of customers now
have a login to My Account web portal or
Mercury app.
Customer insights
s Mercury was voted New Zealand’s Most Trusted
Brand for Electricity and Gas for the fourth
consecutive year in the Reader’s Digest’s Trusted
Brands Awards.
s Mercury was named Winner of the 2026
Reader’s Digest Quality Service Award for
Internet Service Providers and ranked second in
the Commerce Commission’s consumer surveys
for speed of resolution, staff knowledge, and
billing comprehension.
s We maintained strong customer satisfaction
throughout FY26, remaining within our target
range of 64-67% for the majority of the year
and dipping just below that to 63% in the final
quarter. Our multi-service customers reported
higher satisfaction, at 65-69%.
s Mercury was below average in four categories in
Consumer's 2026 energy retailer survey, which
compares multi-service providers with energy-
only retailers. We always want to improve, and
have considered the results alongside our own
comprehensive and ongoing customer research.
Helping customers transition to a smart,
low-carbon home
s Advanced our smart hot water control
programme, resulting in 50,000 cylinders
(20MW) under management over winter.
s Completed a GridSmart device trial to better
understand how smart hot water cylinders can
increase demand flexibility while helping ensure
customers have reliable access to hot water.
2. KIRITAKI
/
CUSTOMER
19MERCURY 2026 INTEGRATED REPORT |MENUHOW WE DELIVER VALUE
Delivering at scale
Entered long-term electricity supply agreements
with industrial customers to support new electricity
demand and provide greater confidence for
renewable generation investment:
s Commenced a 10-year contract with Fonterra
to support electrification of its Waitoa site, from
August, and Edgecumbe, after year end, creating
around 260GWh per year of new demand once
complete—about the size of a large wind farm.
Long-term contracts also commenced with Visy
and Whakatāne Mill.
s Signed a 15-year, 140MW, 1.2TWh per year
power purchase option agreement (PPOA)
with Datagrid for its AI Factory in Southland,
supporting new demand and AI infrastructure
growth in New Zealand.
Looking forward:
s Following a strategic review and careful
consideration, in June 2026 we decided
to consolidate and close the NOW telco and
broadband business. We aim to migrate NOW’s
residential customers to Mercury. The orderly
wind-down is expected to be completed by
March 2027.
s We continue to enhance value and experience
for households through smarter propositions,
benefits, and service features.
s We anticipate continued appetite for long-term
electricity supply agreements that give businesses
certainty of cost, support our investment in more
renewable energy for New Zealand, and help
customers electrify.
AFFORDABILITY
Progress made in FY26:
s Provided direct support to our customers
experiencing hardship and collaborated with
community partners to ensure comprehensive,
wraparound support for those most in need.
Our dedicated Here to Help team help customers
remain connected to services, set up payment plans
tailored to their needs, connect them with partner
agencies, and support access to initiatives such
as the electricity sector’s Power Credits scheme.
s Delivered material support to social retailers,
Nau Mai Rā and Toast Electric, providing care
beyond our own customer base. This included
59GWh volume sold to social retailers in FY26.
s Provided an additional $2 million in support to
trusted iwi, community groups and charities over
winter 2026, as covered in Kōtuitanga/Partnerships.
s Provided long-term electricity supply agreements
to businesses.
Challenges encountered and how we
responded:
In June 2024, we stopped credit-related post-pay
disconnections and moved to a more individualised
support model for customers in hardship. While this
approach aligned with the intent of the Consumer
Care Obligations introduced in April 2025, some
requirements were not fully operationalised by the
effective date and we reported non-compliance
through the annual reporting process. We have since
continued to strengthen the relevant processes,
systems, and controls.
Looking forward:
We are focused on ensuring electricity remains
affordable and accessible for households and
businesses and are taking action across our business,
and in collaboration with others, to support this.
This spans delivering more renewable energy, which
has flow-on effects to price, customer solutions and
care, and advocating for government policies which
will help enable this.
20MERCURY 2026 INTEGRATED REPORT |MENUHOW WE DELIVER VALUE
3. KŌTUITANGA
/
PARTNERSHIPS
We are building trusted, long term relationships with iwi,
communities, and industry partners to support the energy
transition and deliver sustainable outcomes for the country.
SHARED VALUE AND CONSIDERED
OUTCOMES
Progress made in FY26:
s Supported BCG Energy to Grow report, released
in late 2025, and the industry-led Powering
Change relaunch in early 2026.
s Shaped and contributed to solutions for gas
and firming challenges, including gas market
transparency and supporting the Huntly Firming
Option, and boosting the hedge market
to support vibrant competition, including
supporting trading of super peak products.
s Supported more timely and certain consent
processes for renewable projects without
compromising environmental assessments and
community engagement; advocated for stronger
recognition of renewable energy in RMA reforms
and fast-track settings.
s Engaged constructively with politicians from
across the political spectrum in the lead-up
to the general election in November 2026.
s Delivered the Ngā Tamariki Geothermal Station
expansion with support from our long-standing
partners, Tauhara North No.2 Trust, and mana
whenua, Ngāti Tahu – Ngāti Whaoa.
s Began working with Government and our
geothermal partners to advance options for
supercritical geothermal investigations at
the Rotokawa geothermal field in the Taupō
Volcanic Zone.
s Built stronger relationships with Ngāti Koroki
Kahukura, Ngāti Hauā, and Raukawa, by working
together on the Arapuni Hydro Dam
Enhancement Project.
The iwi have named this project Te Ohu o Arapuni
– The Collective of Arapuni, reflecting the many
organisations involved alongside the three iwi.
s Achieved constructive engagement with
Te Rūnanga o Ōtākou which supported our plan
for Puke Kapo Hau Wind Farm (Mahinerangi
Wind Farm Stage 2).
s Supported local communities through initiatives
such as Community Funds, which provide
funding for projects and organisations that
contribute to community wellbeing in regions
where we operate.
s Provided $2 million over winter 2026 to
trusted iwi, community groups, and charities
supporting people doing it tough in the current
economic climate, on top of our existing
affordability initiatives.
s Celebrated 25 years as a five-star partner of the
Starship Foundation, having raised over $20 million
with our customers for the hospital in that time.
Challenges encountered and how we
responded:
s The sector has faced ongoing political scrutiny.
We recognise the sector needs to evolve, are
committed to being open and transparent,
and continue to offer constructive solutions
to help shape those changes.
Looking forward:
s We are implementing the Electricity Authority’s
level playing field measures. Mercury is committed
to ensuring fair and transparent access to
wholesale electricity markets for all participants.
s We are engaging in the next steps following the
Government’s 2025 review of the energy sector.
Our focus is on working constructively with
Government and industry to ensure the proposed
solutions deliver the best outcomes for consumers.
s We are engaging on the Government's plans
to procure LNG as an additional fuel source
as insurance for the electricity sector and
to support gas users. This includes contributing
to the development of an appropriate, enduring
framework for managing dry year risk.
NGĀTI KOROKI KAHUKURA AND MEMBERS OF THE ARAPUNI
HYDRO DAM ENHANCEMENT PROJECT TEAM
s We are working with the Electricity Retailers’
and Generators’ Association of New Zealand
(ERGANZ) and other generator-retailers to bring
international energy experts to New Zealand
for a speaker series. The aim is to support
government, regulators, and industry to learn
from international experiences, understand
the challenges faced in the energy transition,
and apply those insights to support a smoother
transition in New Zealand.
s We continue to have commercial discussions
with iwi on potential renewable energy
development in the geothermal sector.
21MERCURY 2026 INTEGRATED REPORT |MENUHOW WE DELIVER VALUE
We are strengthening our people foundations while shaping
a forward-looking people strategy that lifts performance and
delivers on our business goals.
CONNECTED AND HIGH-PERFORMING
CULTURE
Progress made in FY26:
s Michele Mauger joined as Chief People Officer,
bringing 35+ years’ experience and strengthening
executive capability.
s Completed a review of our executive remuneration
structure to tighten the connection between pay
and performance.
s Announced an Employee Share Scheme and
an enhanced employee product offering, which
will enable our people to understand first-hand
what it is like to be both a Mercury shareholder
and a Mercury customer.
s Lifted our senior leaders' capability to deliver
on our purpose and strategy through the Leaders
Worth Following development programme. This
is driving stronger, more consistent leadership
performance across the business.
s Maintained a strong internal talent pipeline, filling
52% of vacant roles from within. We also refreshed
how we assess talent potential and manage
succession for senior and business-critical roles
— building a more capable, productive leadership
bench for the future.
s The insights from people surveys during FY26
are directly informing our key priorities across
the people strategy, customer strategy, and our
partnerships. Our Cultural Performance Index
rose from 68% (FY25) to 73% (June 2026), and
we introduced a new Engagement Index, starting
at 65% — ahead of the NZ 1000–5000
benchmark of 64%.
s Began embedding AI across the business through
the Mercury Amplify programme, building
capability in our people to lift productivity
and free our people for higher value work.
We are building the skills and confidence to
use these tools safely and effectively, backed
by our AI Policy — boosting performance while
managing risk.
s Built a strong employer brand with Mercury job ads
outperforming comparable roles on applications,
according to Seek data, and AI-assisted sourcing
extended reach for hard-to-fill positions.
s Grew early-career pipeline. In FY26, we welcomed
16 interns, three now in permanent roles, and two
apprentices. Four FY25 interns also joined Mercury
in graduate roles—investing in the capability and
productivity of our future workforce.
s Grew women in leadership by 4% to 49%, and
increased ethnic diversity in people leader roles
with 21% of leaders now identifying as Māori,
Pacific, or Asian, up from 20% in June 2025.
Challenges encountered and how we
responded:
While we have made progress in terms of diversity,
we still have more to do. This will continue to be a
focus for FY27.
Looking forward:
In FY27, we will strengthen our employee lifecycle
foundations and build a modern, market-focused
people strategy aligned to our FY27–FY30 business
goals. We will continue to focus on lifting performance
and productivity through enterprise-wide remuneration
and performance frameworks, leadership development,
and talent and succession, setting our workforce up
to thrive in a world of accelerating change.
4. NGĀ TĀNGATA
/
PEOPLE
22MERCURY 2026 INTEGRATED REPORT |MENUHOW WE DELIVER VALUE
HEALTH, SAFETY AND WELLBEING
Progress made in FY26:
s No fatality or high-severity health and safety
incidents occurred. Our 12-month rolling Total
Recordable Injury Frequency Rate (TRIFR)
was 0.31, down 29.1% on FY25.
s Launched the Safety Intelligence Programme,
a practical framework designed to raise the
standard of workplace safety by making safety
clear, human, and effective, and embedding
capability into everyday practice. As part
of this we:
— Lifted leadership capability and progressed
delivery of a more deliberate and consistent
approach to safety, by strengthening
leader-led safety practices and increasing
consistency in how risk is understood
and managed.
— Progressed our focus on critical risk and
contractor safety, alongside the rollout of our
Hazard Identification Training Programme,
to help people recognise and respond to risk
in real work environments.
— Embedded daily routines, including regular
safety interactions, across our generation
business unit.
— Began building a more structured approach
to psychosocial risk, aligned to international
guidelines (ISO 45003) and our wider health
and safety systems.
— Launched a Safety Intelligence website
to help us, our contractors, and the
wider New Zealand industry lift safety
maturity together.
s Continued prioritising process safety across
generating assets, with WorkSafe accepting safety
cases for all three Major Hazard Facility geothermal
sites as part of the five-yearly review cycle.
NGĀ TAMARIKI GEOTHERMAL STATION
s Began to implement the hydro Dam Safety
Assurance Programmes independently approved
in FY25. Implementation will be completed
ahead of early FY27 regulator verification.
Challenges encountered and how we
responded:
In FY26, Mercury was formally discharged from
the $1.15 million enforceable undertaking entered
into with WorkSafe NZ following a 2021 process
safety incident at Rotokawa Geothermal Station.
This concludes a four-year programme that
fundamentally strengthened our safety systems,
leadership capability, and hazard management
practices, and culminated in the introduction
of our Safety Intelligence Programme.
s Activity included structured leader routines,
process safety fundamentals, industry-wide
lessons which reached more than 400 people,
the introduction of autonomous inspection
technology, and a world-first geothermal safety
cultural resource in partnership with Tauhara
North No.2 Trust.
s This activity delivered a 52% reduction in
our TRIFR over the five years, and resulted
in more than 15,000 proactive safety
interventions recorded.
Looking forward:
We will continue to support our people to deliver safer
outcomes on our journey towards safety citizenship,
where safety is a shared responsibility and an
everyday practice across all levels of the organisation.
This will be achieved by bringing our Safety
Intelligence Framework to life, evolving our critical risk
management, and embedding our rituals and routines.
23MERCURY 2026 INTEGRATED REPORT |MENUHOW WE DELIVER VALUE
We are delivering resilient earnings, disciplined cost performance,
and careful capital allocation to fund growth, maintain balance
sheet resilience, and create long-term shareholder value.
DISCIPLINED GROWTH
Progress made in FY26:
s Invested a record $560 million in growth CAPEX.
Together with $150 million of stay-in-business
CAPEX, total investment was $710 million,
equivalent to 66% of EBITDAF. This investment
is strengthening our future earnings base
and the resilience of our existing assets, while
being funded within clear financial guardrails.
Further detail on major generation
developments and asset upgrades is included
under Kaitiakitanga/Stewardship.
Looking forward:
We will continue to apply clear return thresholds
and staged investment discipline as we progress
our development pipeline towards 3.5TWh of new
generation by 2030. Investment decisions will be
paced against customer demand, project readiness,
delivery capability, and balance sheet capacity.
OPERATIONAL EXCELLENCE
Progress made in FY26:
s Delivered operating costs of $370 million, $26
million lower than FY25 and in line with target.
The reduction reflected refreshed operating
models and lower employee and maintenance
costs following completion of major FY25
generation maintenance programmes, despite
inflationary pressure and the increasing
operating cost of a larger generation portfolio.
s Stay-in-business capex increased from
$138 million in FY25 to $150 million in FY26,
in line with target. This reflected the completion
of the Karāpiro Hydro Upgrade, the geothermal
drilling campaign, and investment in the Arapuni
Hydro Dam Enhancement Project and hydro
refurbishment.
Looking forward:
We remain focused on holding operating costs
broadly flat in FY27, with productivity and
simplification helping to offset inflation and the cost
of new generation capacity.
Over the next 10 years, we expect to invest around
$1.5 billion in stay-in-business CAPEX to maintain
asset reliability, resilience, and performance.
5. ARUMONI
/
COMMERCIAL
MAHINERANGI WIND FARM
24MERCURY 2026 INTEGRATED REPORT |MENUHOW WE DELIVER VALUE
ŌHĀKURĪ HYDRO STATION
25MERCURY 2026 INTEGRATED REPORT |MENUHOW WE DELIVER VALUE25MERCURY 2026 INTEGRATED REPORT |MENUHOW WE DELIVER VALUE
LOOKING AT THE NUMBERS
TITIRO KI NGĀ TATAU
This section explains how our integrated thinking, decisions,
and actions play out in financial results. We provide commentary
on our financial performance for the year to 30 June 2026
compared with prior years, as well as our auditor’s report and
financial statements.
Segment reporting has been set out so you can clearly see the
financial dynamics of our generation and wholesale operations
as distinct from our retail operations.
Our FY26 operating earnings (EBITDAF) were $1,068 million,
up 36% on FY25, driven by higher renewable generation
and cost discipline.
Our FY26 total CAPEX was $710 million,
reflecting a peak investment period in
new renewable generation.
The fully imputed final dividend was
17.0 cents per share (cps), bringing
the FY26 ordinary dividend to 27.0 cps
- the 18th consecutive year of ordinary
dividend growth.
Our operating cash flow of $762 million,
was up 58% on FY25, following strong
EBITDAF performance.
READ MORE PG40
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26MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
LOOKING AT THE NUMBERS
NGĀ TAMARIKI GEOTHERMAL STATION
CONTENTS
28 FINANCIAL COMMENTARY
29 FINANCIAL TRACK RECORD
30 INDEPENDENT AUDITOR'S REPORT
GROUP FINANCIAL STATEMENTS
34 CONSOLIDATED INCOME STATEMENT
34 CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
35 CONSOLIDATED BALANCE SHEET
36 CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
37 CONSOLIDATED CASH FLOW STATEMENT
NOTES TO THE FINANCIAL STATEMENTS
38 GENERAL INFORMATION
A. FINANCIAL PERFORMANCE
39 A1. REVENUE
39 A2. SEGMENT REPORTING
43 A 3. TA X ATION
B. OPERATING ASSETS
44 B1. PROPERTY, PLANT AND EQUIPMENT
46 B2. INTANGIBLE ASSETS
C. WORKING CAPITAL AND PROVISIONS
47 C1. RECEIVABLES
48 C2. INVENTORIES
48 C3. PROVISIONS
D. FUNDING
49 D1. SHARE CAPITAL AND DISTRIBUTION
50 D2. BORROWINGS
51 D3. NET INTEREST EXPENSE
52 D4. COMMITMENTS AND CONTINGENCIES
53 D5. RECONCILIATION OF PROFIT TO
OPERATING CASH FLOWS
E. GROUP STRUCTURE
54 E1. ASSOCIATES AND JOINT
ARRANGEMENTS
55 E2. RELATED PARTY TRANSACTIONS
F. R I S K
56 F1. DERIVATIVE FINANCIAL INSTRUMENTS
60 F2. FINANCIAL RISK MANAGEMENT
G. OTHER
64 G1. SHARE-BASED PAYMENTS
64 G2. SUBSEQUENT EVENTS AND
OTHER MATTERS
27MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
FINANCIAL COMMENTARY
OPERATING EARNINGS (EBITDAF)
Our EBITDAF increased by $282 million
to $1,068 million.
Trading margin increased by $268 million to $1,421
million, driven by higher generation volumes and
improved sales yields, partly offset by lower
electricity prices.
Operating costs were $370 million, in line with
our target and $26 million lower than the prior year.
The decrease primarily reflected lower employee
costs following operating-model changes and
the completion of major generation maintenance
programmes in FY25.
PROFIT FOR THE YEAR
Our net profit after tax was $321 million, an increase
of $320 million from the prior year. The increase
primarily reflected higher EBITDAF and a favourable
year-on-year movement in unrealised losses on
unhedged derivatives and hedge ineffectiveness.
These benefits were partly offset by higher tax
and depreciation expenses and impairment and
revaluation losses recognised during the year.
CAPITAL STRUCTURE AND DIVIDENDS
Net debt was $2,354 million at 30 June 2026,
an increase of $171 million from the prior year.
The increase primarily reflected growth capital
expenditure on the fifth generating unit at the Ngā
Tamariki Geothermal Station, Stage 2 of the Kaiwera
Downs Wind Farm and Kaiwaikawe Wind Farm. This
was partly offset by stronger operating cash flow
and the issue of new shares under our dividend
reinvestment plan.
During FY26, we issued 18.1 million new ordinary
shares under the dividend reinvestment plan,
increasing issued capital by $117 million. We held
no treasury shares at 30 June 2026.
Our S&P Global-adjusted debt/EBITDAF was 2.0
at 30 June 2026, within its target range of 2.0x
to 3.0x and consistent with its BBB+ credit rating.
At year end, we had $610 million of undrawn borrowing
facilities, net of commercial paper on issue, and cash
and cash equivalents of $77 million. Sitting at the lower
end of the 2.0x-3.0x target range gives us balance
sheet headroom to fund both committed and planned
uncommitted projects within current settings.
The Board has declared a fully imputed final ordinary
dividend of 17.0 cents per share. This brings the
full-year ordinary dividend to 27.0 cents per share,
an increase of approximately 13% from 24.0 cents
per share in the prior year and is our 18th consecutive
year of ordinary dividend growth.
The full-year ordinary dividend is consistent with our
dividend policy, which targets a payout of 70% to
85% of free cash flow on average over time. Under
the terms of our dividend reinvestment plan dated
22 February 2022, shareholders may elect to receive
all or part of the dividend in Mercury ordinary shares
rather than cash. Shares issued under the plan for
the 2026 final ordinary dividend will be issued at a
2% discount to the volume-weighted average share
price calculated in accordance with the plan's terms
and conditions.
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating activities represents
cash flows from the sale of electricity, gas, broadband,
and telecommunication services, along with the costs
associated with their sale and the cash costs of
interest and taxes. Net cash provided by operating
activities increased by $279 million to $762 million,
reflecting higher underlying earnings and lower
income tax payments. The lower tax payments reflect
reduced provisional tax instalments in FY26,
following lower profit in FY25.
BALANCE SHEET
Total assets increased by $507 million to $10,465
million, mainly due to continued investment in
generation assets, which increased property, plant
and equipment by $431 million to $9,146 million.
Capital expenditure totalled $710 million during
the year. Stay-in-business capital expenditure
increased by $12 million to $150 million, including
commencement of the next phase of the Hydro
refurbishment programme at Maraetai, Ōhākurī
and Ātiamuri.
Growth capital expenditure increased by $213 million
to $560 million, primarily reflecting Stage 2 of the
Kaiwera Downs Wind Farm which began generating
in April 2026, and continued construction of the
Kaiwaikawe Wind Farm, which is expected to be
fully operational by the end of 2026.
OPERATIONAL ACTIVITY
Total generation for the year was 9,070GWh, an
increase of 1,163GWh or 15% from the prior year.
The increase reflects higher hydro generation
following stronger inflows, together with increased
wind and geothermal generation from recently
commissioned assets.
Hydro generation increased by 1,041GWh to
4,452GWh and was 310GWh above the long-term
average, reflecting 83rd percentile inflows. Wind
generation increased by 59GWh to 1,995GWh,
supported by generation from Stage 2 of the Kaiwera
Downs Wind Farm. Geothermal generation increased
by 63GWh to 2,622GWh, with additional output from
the fifth generating unit at Ngā Tamariki Geothermal
Station, partly offset by an unplanned outage at
Kawerau Geothermal Station.
Higher generation volumes moved us from a
net short electricity position of 149GWh in FY25
to a net long position of 48GWh in FY26. Sales
yields increased across all segments, with mass-
market yields increasing to $184/MWh and average
commercial and industrial yields increasing to
$156/MWh.
Mercury delivered record EBITDAF of $1,068 million for FY26,
$282 million higher than the $786 million reported in the prior
year. The result reflects higher generation volumes, primarily
following strong hydro inflows, additional output from the fifth
generating unit at the Ngā Tamariki Geothermal Station and
Stage 2 of the Kaiwera Downs Wind Farm, improved sales
yields and lower operating costs. This performance supported
record investment in new and existing generation assets while
maintaining leverage within our target range.
28MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
For the year ended 30 June ($ million)20262025202420232022
Income statement
Trading margin1,4211,1531,2281,163745
EBITDAF1,068786877841581
Net profit for the year3211290112469
Balance sheet
Total shareholders' equity5,2634,9034,8494,8634,752
Total assets10,4659,9589,7959,4199,631
Total liabilities5,2025,0554,9464,5564,879
Cash flow
Operating cash flow762483612578352
Investing cash flow(678)(437)(366)(271)(534)
Financing cash flow(93)(4)(277)(297)84
CAPEX
Total CAPEX7104852962961,420
Growth CAPEX5603471541771,352
Stay-in-business CAPEX15013814211968
Other financial measures
Free cash flow612345470459284
Ordinary dividends declared384 337 325302275
Ordinary dividends per share (cents) 27.0 24.0 23.321.820.0
Basic and diluted earnings per share22.660.0720.858.1134.32
Net debt2,354 2,183 1,9531,9071,961
Gearing (net debt/net debt + equity, %)30.930.828.728.229.2
Debt/EBITDAF
1
2.0 2.5 2.02.02.9
Operational measures
Total recordable injury frequency rate (TRIFR)
2
0.31 0.44 0.430.490.60
Sales to customers (GWh)6,485 6,340 6,6696,7495,105
Electricity customers ('000)590 578 576590574
Electricity generation (GWh)9,070 7,906 8,7809,0387,499
1
Adjusted for expected S&P Global treatment
2
Per 200,000 hours; includes on-site employees and contractors.
FINANCIAL TRACK RECORD
TARARUA WIND FARM
MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS29
A member firm of Ernst & Young Global Limited
Independent Auditor’s Report
To the shareholders of Mercury NZ Limited
The Auditor-General is the auditor of Mercury NZ Limited and its subsidiaries (the Group).
The Auditor-General has appointed me, Emma Winsloe, using the staff and resources of
Ernst & Young, to carry out the audit of the consolidated financial statements of the Group
on his behalf.
Opinion
We have audited the consolidated financial statements of the Group on pages 34 to 64,
that comprise the consolidated balance sheet as at 30 June 2026, the consolidated
income statement, consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated cash flow statement for the year then
ended, and the notes to the consolidated financial statements, including material
accounting policy information.
In our opinion, the consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at 30 June 2026, and its consolidated
financial performance and its consolidated cash flows for the year then ended, in accordance
with New Zealand equivalents to International Financial Reporting Standards and IFRS
Accounting Standards.
Basis for opinion
We conducted our audit in accordance with the Auditor-General’s Auditing Standards,
which incorporate the Professional and Ethical Standards and the International Standards
on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards
Board. Our responsibilities under those standards are further described in the
Auditor’s
responsibilities for the audit of the consolidated financial statements
section of our report.
We are independent of the Group in accordance with the Auditor-General’s Auditing
Standards, which incorporate Professional and Ethical Standard 1:
International Code
of Ethics for Assurance Practitioners (including International Independence Standards)
(New Zealand)
issued by the New Zealand Auditing and Assurance Standards Board,
as applicable to audits of public interest entities. We have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
In addition to the audit we have carried out engagements in the areas of interim financial
statements review, agreed-upon procedures and other assurance engagements, which
are compatible with those independence requirements. Other than the audit and these
engagements, we have no relationship with or interests in Mercury NZ Limited or any
of its subsidiaries.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the Group of the current
period. These matters were addressed in the context of our audit of the consolidated
financial statements of the Group as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
A member firm of Ernst & Young Global Limited
Description of key audit matterDescription of key audit matterHow we addressed this matterHow we addressed this matter
Generation assets were recorded at $8,483 million
at 30 June 2026 as set out in note B1 of the
consolidated financial statements. The generation
assets represent approximately 80% of the Group’s
total assets.
The Group engages an external valuation specialist
(“valuer”) to estimate the fair value of generation
assets using a discounted cash flow model. The
most significant inputs used to estimate this value
include the forecast future wholesale electricity
price path, forecast future generation volumes,
projected operational and capital expenditure
and discount rates as described in note B1 of the
consolidated financial statements.
The forecast future wholesale electricity price path
and discount rate assumptions, which are the
assumptions the valuation is most sensitive to, are
estimated by the Group’s valuer. Forecast future
generation volumes and projected operational and
capital expenditure are based on the Group’s own
forecast average generation volumes and cash
flow forecasts, respectively, and are assessed
by the valuer.
We consider the valuation of generation assets to
be a key audit matter given the significance of the
recorded value to the Group financial statements
and because of the inherent subjectivity,
judgement and complexity involved in determining
the fair value.
In obtaining sufficient appropriate audit evidence we:
• met with the valuer to understand the valuation
methodology adopted and the significant inputs
and assumptions used by the valuer to estimate
the fair value of the generation assets as at
30 June 2026;
• compared forecast future generation volumes
to historical generation volumes;
• assessed the reasonableness of the projected
operating and capital expenditure and considered
the accuracy of the prior period forecasts
compared to actual outcomes;
• involved our internal valuation specialists to assess:
◦
the appropriateness of the valuation
methodology; and
◦
the reasonability of:
- the forecast future wholesale electricity
price path; and
- the discount rates.
• assessed the competence, capabilities and
objectivity of the valuer;
• assessed whether the valuation adjustments
made by management to the recorded asset
values were in accordance with the Group’s
accounting policy; and
• assessed the adequacy of the related financial
statement disclosures in note B1.
As a result of the above procedures, we considered
the valuation methodologies and key assumptions
reasonable in forming our opinion on the financial
statements as a whole.
The Group’s activities expose it to certain risks
which are managed using derivative financial
instruments (“derivatives”).
Derivatives are recorded at fair value. Where fair
value is determined using significant non-market
observable inputs, including the Group’s internal
forecast future wholesale electricity price path, those
derivatives are classified as ‘level 3’ under the fair
value hierarchy in NZ IFRS 13
Fair value measurement.
At 30 June 2026, the recorded fair values of level 3
derivative assets and liabilities were $238 million and
$280 million respectively, as set out in note F1 of
the consolidated financial statements.
We consider the valuation of level 3 derivatives
to be a key audit matter because of the inherent
subjectivity, judgement and complexity involved
in determining their fair value.
In obtaining sufficient appropriate audit evidence we:
• involved our internal valuation specialists to assess:
◦
the appropriateness of:
- on a sample basis, the models used to estimate
the fair value of the level 3 derivatives; and
- the valuation methodologies; and
◦
the reasonableness of:
- the Group’s internal forecast future wholesale
electricity price path, with reference to the
generation asset valuation procedures detailed
above; and
- the discount rates.
• on a sample basis, agreed key contract terms,
including contract start and maturity dates,
expected volumes and electricity strike prices,
applied in the valuation models to the relevant
contract; and
• assessed the adequacy of the related financial
statement disclosures in notes F1 and F2.
As a result of the above procedures, we considered
the valuation methodologies and key assumptions
reasonable in forming our opinion on the financial
statements as a whole.
Valuation of generation assetsValuation of level 3 derivative financial instruments
A member firm of Ernst & Young Global Limited
Other information
The Directors are responsible on behalf of the Group for the other information. The other
information comprises all of the information in the annual report other than the consolidated
financial statements, and our auditor’s report thereon. The other information includes the
climate statement.
Our opinion on the consolidated financial statements does not cover the other information
and we do not express any form of audit opinion or assurance conclusion thereon, except
as otherwise stated. We have issued an assurance report in relation to greenhouse gas
emissions information disclosed in the climate statement.
In connection with our audit of the consolidated financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibilities for the consolidated
financial statements
The Directors are responsible on behalf of the Group for the preparation and fair presentation
of the consolidated financial statements in accordance with New Zealand equivalents to
International Financial Reporting Standards and IFRS Accounting Standards, and for such
internal control as the Directors determine is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible on behalf
of the Group for assessing the Group’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
The Directors’ responsibilities arise from the Financial Markets Conduct Act 2013.
Auditor’s responsibilities for the audit of the consolidated
financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Auditor-General’s Auditing Standards will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of shareholders taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with the Auditor-General’s Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
A member firm of Ernst & Young Global Limited
• Conclude on the appropriateness of the use of the going concern basis of accounting by
the Directors and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditor’s report. However, future events or conditions may cause the Group
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial
statements represent the underlying transactions and events in a manner that achieves
fair presentation.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business units within the Group as a basis for
forming an opinion on the group financial statements. We are responsible for the direction,
supervision and review of the audit work performed for the purposes of the group audit.
We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable, actions taken to eliminate threats or safeguards applied.
Emma Winsloe
Ernst & Young
On behalf of the Auditor-General
Auckland, New Zealand
18 August 2026
From the matters communicated with the Directors, we determine those matters that were
of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
Our responsibilities arise from the Public Audit Act 2001.
GROUP FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
For the year ended 30 June 2026
Note
2026
$M
2025
$M
RevenueA1, A23,224 3,498
ExpensesA2(2,157)(2,917)
Depreciation and amortisationB1, B2(375)(357)
ImpairmentB1, E1(16)-
Revaluation loss of generation assetsB1(7)-
Change in the fair value of financial instrumentsF1(141)(148)
Change in the fair value of carbon units held for tradingC2(5)11
Share of profit from associates and joint venturesE14 13
(Loss)/gain on disposal of carbon unitsB2(1)18
Gain on sale of property, plant and equipmentB112 -
Interest incomeD33 4
Interest expenseD3(97)(121)
Profit before tax4441
Tax exp e nseA3(123)-
Profit for the year attributable to owners of the parent321 1
Basic and diluted earnings per share (cents)D122.66 0.07
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2026
Note
2026
$M
2025
$M
Profit for the year attributable to owners of the parent3211
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Change in asset revaluation reserveB1 93 323
Change in cash flow hedge reserve transferred to balance sheet (12)7
Share of movements in associates' and joint ventures' reservesE1 (10)(9)
Tax ef fe c t (26)(91)
Items that may be reclassified subsequently to profit or loss
Change in cash flow hedge reserve273101
Share of movements in associates' and joint ventures' reservesE1 24 -
Tax ef fe c t(75)(23)
Other comprehensive income for the year, net of taxation267308
Total comprehensive income for the year attributable
to owners of the parent
588309
The accompanying notes form an integral part of these financial statements.
34MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
CONSOLIDATED BALANCE SHEET
As at 30 June 2026
Note
2026
$M
2025
$M
SHAREHOLDERS’ EQUITY
Issued capital D1 533 416
Reserves4,730 4,487
Total shareholders’ equity5,263 4,903
ASSETS
Current assets
Cash 77 86
Trade and other receivablesC1 501 498
Contract assets and costs 26 33
InventoriesC2 116 126
Derivative financial instrumentsF1 190 172
Total current assets 910 915
Non-current assets
Property, plant and equipmentB1 9,146 8,715
Intangible assetsB2 103 102
Investment in and advances to associates and joint venturesE1 90 95
Advances to joint operationsE2 1 4
Contract assets and costs 28 28
Derivative financial instrumentsF1 187 99
Total non-current assets9,555 9,043
Total assets10,465 9,958
Note
2026
$M
2025
$M
LIABILITIES
Current liabilities
Payables and accruals 348 377
ProvisionsC3 14 -
BorrowingsD2 330 233
Derivative financial instrumentsF1 211 234
Taxation payableA3 42 8
Total current liabilities945 852
Non-current liabilities
ProvisionsC3 78 89
BorrowingsD22,142 2,046
Derivative financial instrumentsF1266 364
Deferred taxA31,771 1,704
Total non-current liabilities4,257 4,203
Total liabilities5,202 5,055
Net assets5,263 4,903
SCOTT ST JOHN
CHAIR OF THE BOARD OF DIRECTORS
ROBERT HAMILTON
CHAIR OF THE AUDIT AND FINANCIAL
RISK COMMITTEE
The accompanying notes form an integral part of these financial statements.
The financial statements were authorised on behalf of the Mercury NZ Limited Board of Directors
on 18 August 2026.
35MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2026
Note
Issued
capital
$M
Retained
earnings
$M
Asset revaluation
reserve
$M
Cash flow hedge
reserve
$M
Other
reserves
$M
Total
equity
$M
BALANCE AS AT 1 JULY 2024378 369 4,334 (216)(16) 4,849
Movement in asset revaluation reserve, net of taxationB1 - - 232 - - 232
Movement in cash flow hedge reserve, net of taxationF1 - - - 85 - 85
Share of movements in associates' and joint ventures' reservesE1 - - - (9) - (9)
Other comprehensive income - - 232 76 - 308
Net profit for the year - 1 - - - 1
Total comprehensive income for the year - 1 232 76 - 309
DividendD1 - (330) - - - (330)
Issuance of new shares for dividend reinvestment programmeD1 38 - - - - 38
Distribution of treasury shares for dividend reinvestment programmeD1 - 20 - - 15 35
Other movements - - - - 2 2
Balance as at 30 June 2025416 60 4,566 (140)1 4,903
BALANCE AS AT 1 JULY 2025 416 60 4,566 (140) 1 4,903
Movement in asset revaluation reserve, net of taxationB1 - - 67 - - 67
Movement in cash flow hedge reserve, net of taxationF1 - - - 186 - 186
Share of movements in associates' and joint ventures' reservesE1 - - (10) 24 - 14
Other comprehensive income - - 57 210 - 267
Net profit for the year - 321 - - - 321
Total comprehensive income for the year - 321 57 210 - 588
DividendD1 - (344) - - - (344)
Issuance of new shares for dividend reinvestment programmeD1 117 - - - - 117
Changes associated with share-based paymentsG1 - - - - 1 1
Other movements - (2) (1) - 1 (2)
Balance as at 30 June 2026 533 35 4,622 70 3 5,263
The ‘Other reserves’ category includes treasury shares, the foreign currency translation reserve and the share based payment reserve.
The accompanying notes form an integral part of these financial statements.
36MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 June 2026
Note
2026
$M
2025
$M
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 3,233 3,806
Payments to suppliers and related parties (2,096) (2,848)
Payments to employees (157) (169)
Interest received 3 4
Interest paid (91) (121)
Taxes paid (130) (189)
Net cash provided by operating activitiesD5 762 483
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisition of property, plant and equipment(673) (437)
Payments for acquisition of intangibles(36) (30)
Payments for investments in associates and joint ventures (3) (31)
Proceeds from sale of intangibles and property, plant and equipment 19 33
Distributions received from associates and joint ventures 17 9
Net (lodgements)/return of prudential deposits (2) 19
Net cash used in investing activities (678) (437)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 1,392 3,085
Repayment of borrowings (1,240) (2,816)
Principal repayment of lease liabilities (18) (17)
Dividends paid (227) (256)
Net cash used in financing activities (93) (4)
Net (decrease)/increase in cash and cash equivalents held (9) 42
Cash and cash equivalents at the beginning of the year 86 44
Cash and cash equivalents at the end of the year 77 86
Cash and cash equivalents balance comprises:
Cash held at bank at the end of the year 77 66
Term deposits held at the end of the year - 20
Total cash and cash equivalents at the end of the year 77 86
The accompanying notes form an integral part of these financial statements.
NGĀ TAMARIKI GEOTHERMAL STATION
MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
GENERAL INFORMATION
General information
These consolidated financial statements ("Group
financial statements") are for Mercury NZ Limited
Group ("the Group"). The Group financial statements
comprise Mercury NZ Limited ("the Company") as
the parent, and its subsidiaries and its investments
in associates and interests in joint arrangements.
The Company is incorporated in New Zealand and
registered under the Companies Act 1993. It is listed
on the NZX Main Board and on the ASX, with foreign
exempt listed status. It also has bonds quoted on
the NZX debt market. Mercury NZ Limited is an FMC
reporting entity under the Financial Markets Conduct
Act 2013.
The Company is a mixed ownership model company,
majority owned by the New Zealand Government,
and is bound by the requirements of the Public
Finance Act 1989. The liabilities of the Group are
not guaranteed in any way by the New Zealand
Government or by any other shareholder.
Basis of preparation
The Group financial statements have been prepared:
s In accordance with the Financial Markets Conduct
Act 2013 and Generally Accepted Accounting
Practice in New Zealand (“GAAP”). They comply
with New Zealand equivalents to International
Financial Reporting Standards (“NZ IFRS”) and
International Financial Reporting Standards
("IFRS") as appropriate for profit-oriented entities.
s On a historical cost basis, with the exception
of certain fair value measurements.
s Using the same accounting policies for all
reporting periods presented.
s With presentation in millions of New Zealand
dollars, unless otherwise stated.
s Exclusive of GST, with the exception of payables
and receivables that include GST invoiced.
Estimates and judgements
The preparation of financial statements requires
judgements and estimates that impact the application
of policies and the reported amounts of assets and
liabilities, income and expenses. Actual results may
differ from these estimates.
The areas of significant estimates and judgements
are as follows:
s Fair value of generation plant and equipment
(refer note B1).
s Valuation of derivative financial instruments
(refer note F1).
NOW New Zealand Limited
Following a strategic review, the Group announced
its decision to close NOW New Zealand Limited on
30 June 2026. Residential customers are expected
to be migrated to the Company, while business
customers will be supported to transition to alternative
providers. The financial implications of the closure
have been reflected in these Group financial
statements to the extent required by NZ IFRS.
This includes a $4m impairment loss recognised
in the income statement.
Accounting standards, interpretations
and amendments not yet effective
In May 2024, the External Reporting Board (XRB)
introduced NZ IFRS 18
Presentation and Disclosure in
Financial Statements
(effective for reporting periods
beginning on or after 1 January 2027). NZ IFRS 18
introduces new requirements on presentation within
the statement of profit or loss, including specified
totals and subtotals. It also requires disclosure of
management-defined performance measures
and includes new requirements for the aggregation
and disaggregation of financial information based
on the identified ‘roles’ of the primary financial
statements and the notes. This standard replaces
NZ IAS 1
Presentation of Financial Statements.
The Group is currently assessing the impact of the
standard and has not yet determined the full effect
on its financial statements.
Contracts Referencing Nature Dependent Electricity
-
Amendments to NZ IFRS 9 and NZ IFRS 7 were
issued in May 2025 by the XRB, effective for
reporting periods beginning on or after 1 January
2026. These amendments introduce requirements
addressing contracts referencing nature-dependent
electricity. The amendments include clarifying the
application of the 'own-use' requirements;
permitting hedge accounting if these contracts
are used as hedging instruments; and adding new
disclosure requirements to enable investors to
understand the effect of these contracts. The Group
has assessed the amendments and does not expect
them to have a material impact on the Group's
financial statements.
There are no other accounting standards that are
not yet effective, that will have a material impact
on the Group's financial statements.
ŌHĀKURĪ HYDRO STATION
38MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
NOTE A2. SEGMENT REPORTING
Identification of reportable segments
The operating segments are identified by
management based on the nature of the products
and services provided. The Chief Executive, who
is the chief operating decision-maker, receives
discrete financial information about each operating
segment monthly and assesses segment
performance using EBITDAF.
EBITDAF is a non-GAAP measure that is used
internally to assess the operating performance
of the Group without the impact of non-cash
and one-off or infrequent transactions. Segment
EBITDAF represents earnings before net interest
expense, tax expense, depreciation, amortisation,
unrealised change in the fair value of financial
instruments, gain/(loss) on disposal and sale,
impairments and revaluation loss by each segment
inclusive of an allocation of central operating revenue
and costs. Operating segments are aggregated into
reportable segments only if they share similar
economic characteristics.
The segment report includes a Derivatives category
within the Electricity margin. This represents the
settlement (realised gains or losses) of both hedged
and unhedged electricity swaps, as well as premiums
related to electricity options.
Realised gains or losses (settlements) on unhedged
electricity swaps are reported within Electricity
margin for the purposes of EBITDAF, but are reported
within the change in fair value of financial instruments
in the income statement. Realised gains or losses
(settlements) on hedged electricity swaps and
premiums on electricity options are reported within
Electricity margin for the purposes of EBITDAF,
and within revenue or expenses as appropriate in
the income statement. Unrealised gains or losses
on both hedged and unhedged electricity swaps
are not included in EBITDAF and are reported in
either change in fair value of financial instruments
in the income statement or in other comprehensive
income. A reconciliation of EBITDAF to profit before
tax can be found in the summary table of the note.
Identified segments
Generation/Wholesale
The generation/wholesale segment encompasses
activity associated with electricity production,
electricity trading and generation development
activities, and the Group’s share of associates’
earnings in TPC Holdings Limited (refer to note E1).
It includes revenue from the sale of electricity, to
both commercial and industrial customers and
the customer segment, net settlement of energy
hedges and sale of trading emissions units to third
parties. It also includes transfer revenue from the
customer segment to the generation/wholesale
segment for the purchase of electricity.
Customer
The customer segment encompasses activity
associated with the sale of electricity, gas,
telecommunication products and services and
other related products and services to mass
market customers in New Zealand.
Other
This segment represents corporate support services
that are not directly attributable to the generation/
wholesale or customer segments and the Group's
share of associates' earnings in EnergySource LLC,
EnergySource Minerals LLC and Forest Partners
Limited Partnership (refer to note E1).
Inter-segment
Transactions between segments represent transfer
charges by the generation/wholesale segment to the
customer segment for the purchase of electricity.
A. FINANCIAL PERFORMANCE
NOTE A1. REVENUE
The Group earns revenue from the following sources:
Revenue streamDescription and revenue recognition
Electricity generation,
net of hedging
Revenue is received from:
• Electricity generated and sold through the New Zealand electricity spot
market and physical power purchase agreements (PPAs). Revenue is
recognised at the time of generation and at the spot price or contract price.
• Net settlement of hedged energy contracts sold or bought on the futures
market, and to generators, retailers, and commercial and industrial
customers and recognised at the time of hedge settlement.
Electricity and gas sales
to customers
• Electricity and gas sales to customers are recognised when the energy
is supplied for customer consumption.
• Acquisition incentives such as credits and appliances are offered to new
customers and treated as individual performance obligations and a portion
of the expected revenue over the life of the total contract is allocated to
the performance obligation based on their standalone selling price and
recognised immediately. Corresponding contract assets are recognised on
the balance sheet and amortised to the income statement over the contract
period as the future consideration is billed. Incremental costs to obtain
and retain customers are recognised on the balance sheet as contract costs
and amortised to the income statement on a straight-line basis over the
expected average mass market customer tenure.
Telco revenueCustomers consume mobile and broadband services which are measured and
billed according to monthly billing cycles and are recognised when the service
has been provided. Acquisition incentives are treated the same as above.
Other incomeIncome is received from:
• Insurance proceeds. Income is recognised at the time the insurance proceeds
are virtually certain to be received.
• External management fees. Revenue is recognised at the time the services
have been delivered.
• Sale of emission units sold to third parties. The sale is recognised at the point
in time that the emission unit is confirmed as being transferred into the acquirer’s
emission unit account.
39MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
Segment results
Year ended 30 June 2026
Generation/
Wholesale
$M
Customer
$M
Other
$M
Inter–
segment
$M
Total
$M
Generation760 - - - 760
Sales to customers542 1,471 - - 2,013
Inter-segment sales693 - - (693) -
Derivatives77 - - - 77
Electricity purchases (604) (693) - 693 (604)
Transmission and distribution (166) (624) - - (790)
Metering (5) (60) - - (65)
Electricity margin1,297 94 - - 1,391
Gas revenue - 145 - - 145
Gas purchases - (46) - - (46)
Transmission and distribution - (49) - - (49)
Metering - (11) - - (11)
Gas margin - 39 - - 39
Telco revenue - 210 - - 210
Cost of sales - (152) - - (152)
Telco margin - 58 - - 58
Other direct cost of sales (27) (40) - - (67)
Trading margin1,270 151 - - 1,421
Other income17 2 (2) - 17
Employee compensation and benefits (51) (78) (33) - (162)
Maintenance expenses (64) (22) - - (86)
Other expenses (39) (39) (44) - (122)
Allocation of corporate overheads (41) (36) 77 - -
Total operating expenses (195) (175) - - (370)
Segment EBITDAF1,092 (22) (2) - 1,068
NOTE A2. SEGMENT REPORTING CONT.
Year ended 30 June 2026
Generation/
Wholesale
$M
Customer
$M
Other
$M
Inter–
segment
$M
Total
$M
Summary and reconciliation
to net profit before tax
Revenue 2,089 1,828 - (693) 3,224
Expenses (997) (1,850) - 693 (2,154)
Premiums for electricity
options within derivatives
(3) - - - (3)
Realised loss on unhedged
electricity swaps
(3) - - - (3)
Share of profit/(loss) from
associates and joint ventures
6 - (2) - 4
Segment EBITDAF 1,092 (22) (2) - 1,068
Depreciation and amortisation (375)
Impairment (16)
Revaluation loss of generation assets (7)
Unrealised loss on unhedged
derivatives and hedge ineffectiveness
through income statement
(138)
Change in fair value of carbon
units held for trading
(5)
Loss on disposal of carbon units (1)
Gain on sale of property,
plant and equipment
12
Interest income 3
Interest expense (97)
Profit before tax444
40MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
Year ended 30 June 2025
Generation/
Wholesale
$M
Customer
$M
Other
$M
Inter–
segment
$M
Total
$M
Summary and reconciliation
to net profit before tax
Revenue2,4881,648 - (638)3,498
Expenses (1,852)(1,699) - 638 (2,913)
Premiums for electricity
options within derivatives
(4)---(4)
Realised gain on unhedged
electricity swaps
192 - - - 192
Share of profit from associates
and joint ventures
13 - - - 13
Segment EBITDAF 837 (51) - - 786
Depreciation and amortisation (357)
Unrealised loss on unhedged
derivatives and hedge ineffectiveness
through income statement
(340)
Change in fair value of carbon
units held for trading
11
Gain on disposal of carbon units18
Interest income4
Interest expense (121)
Profit before tax1
NOTE A2. SEGMENT REPORTING CONT.
Segment results
Year ended 30 June 2025
Generation/
Wholesale
$M
Customer
$M
Other
$M
Inter–
segment
$M
Total
$M
Generation1,418 - - - 1,418
Sales to customers493 1,336 - - 1,829
Inter-segment sales638 - - (638) -
Derivatives114 - - - 114
Electricity purchases(1,452) (638) - 638 (1,452)
Transmission and distribution (134) (543) - - (677)
Metering (4) (61) - - (65)
Electricity margin1,07394 - - 1,167
Gas revenue - 122 - - 122
Gas purchases - (47) - - (47)
Transmission and distribution - (43) - - (43)
Metering - (10) - - (10)
Gas margin - 22 - - 22
Telco revenue - 187 - - 187
Cost of sales - (131) - - (131)
Telco margin - 56 - - 56
Other direct cost of sales (44) (48) - - (92)
Trading margin1,029124 - - 1,153
Other income26 3 - - 29
Employee compensation and benefits (58) (84) (33) - (175)
Maintenance expenses (74) (22) - - (96)
Other expenses (48) (38) (39) - (125)
Allocation of corporate overheads (38) (34) 72 - -
Total operating expenses (218) (178) - - (396)
Segment EBITDAF837 (51) - - 786
41MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
Audit Fees
Mercury NZ Limited is a public entity as defined in the Public Audit Act 2001. The Auditor-General is the
auditor of every public entity. The Auditor-General has appointed Emma Winsloe of EY to carry out the audit
on his behalf from 1 July 2023. NZX Listing Rules and Mercury's Audit Independence Policy require that the
signing partner performing the audit rotate every five years.
Audit fees
2026
$000
2025
$000
Audit of financial statements844 882
Review of interim financial statements85 83
Total audit or review of the financial statements929 965
Audit of telecommunications development levy calculation schedule6 6
Total audit related services6 6
Limited assurance report: compliance with bond trust deed3 3
Limited assurance report: climate-related disclosures and greenhouse
gas emissions inventory
70 149
Total other assurance services73 152
Agreed upon procedures for Directors’ compliance certificates2 2
Total other services2 2
Total fees paid to auditors1,0101,125
NGĀ AWA PŪRUA GEOTHERMAL STATION
NOTE A2. SEGMENT REPORTING CONT.
MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
2026
$M
2025
$M
INCOME TA X
Tax expense
Profit before tax 444 1
Prima facie tax expense at 28% on the profit before tax(124) -
Adjusted for the tax effect of the following items:
Share of associates’ and joint ventures’ tax paid earnings (5) 1
Other differences 6 (1)
Tax expense attributable to profit from ordinary activities(123)-
Represented by:
Current tax expense(157)(128)
Deferred tax recognised in the income statement 34 128
The effective tax rate for the financial year is 28% (30 June 2025: 21%).
The income tax expense charged to the income statement includes both the current year’s provision
and the income tax effect of:
s taxable temporary differences, except those arising from initial recognition of goodwill; and
s deductible temporary differences to the extent that it is probable that they will be utilised.
The income tax charged to other comprehensive income relates to transactions or other events recognised
outside of the income statement, including certain transactions relating to revaluation of assets and
changes in cash flow hedge reserve.
Deferred tax
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax
and accounting bases of the assets and liabilities. A deferred tax asset is only recognised to the extent that
there will be future taxable profit to utilise the temporary difference.
Property, plant and equipment is held on capital account for income tax purposes. Where assets are revalued,
with no similar adjustment to the tax base, a taxable temporary difference is created that is recognised in
deferred tax.
Movement in deferred tax
Property,
plant and
equipment
$M
Financial
instruments
$M
Employee
entitlements
$M
Other
$M
Total
$M
Asset/(liability) balance
as at 1 July 2024
(1,769) 30 5 16 (1,718)
Charged/(credited) to
the income statement
32 99 2 (5)128
Charged/(credited) to other
comprehensive income
(91) (23) - - (114)
Asset/(liability) balance
as at 30 June 2025
(1,828) 106 7 11 (1,704)
Asset/(liability) balance
as at 1 July 2025
(1,828) 106 7 11 (1,704)
Charged/(credited) to
the income statement
3 31 3 (3) 34
Charged/(credited) to other
comprehensive income
(26)(75) - - (101)
Asset/(liability) balance
as at 30 June 2026
(1,851) 62 10 8 (1,771)
NOT E A 3. TA X ATIONOECD Global Anti-Base Erosion (GloBE) Pillar Two
The New Zealand Government has enacted legislation to implement the OECD GloBE Pillar Two rules which
address the tax challenges arising from the digitalisation of the global economy. The GloBE Pillar Two rules
seek to apply a 15% minimum tax across all jurisdictions in which the Group reports income.
The Group has applied a temporary mandatory relief from deferred tax accounting in respect of the GloBE
Pillar Two rules and it will be accounted for as a current tax when it is incurred. An assessment of the Group’s
exposure to the GloBE Pillar Two legislation indicates that no top-up tax would have arisen for the Group
using the most recent financial information for the Group. Therefore the Group has not recognised any
current tax expense related to GloBE Pillar Two income taxes for the year ended 30 June 2026 (2025: nil).
43MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
Year ended 30 June 2025
Generation
assets at
fair value
$M
Other
assets
at cost
$M
Right-of-
use assets
$M
Capital work
in progress
at cost
$M
Total
$M
Opening net book value 7,797 45 103 277 8,222
Additions2 3 22 465 492
Transfers 141 3 - (144)-
Disposals(1) - (3) - (4)
Gain on revaluation323 - - - 323
Depreciation charge for the year(289) (12) (17) - (318)
Closing net book value7,973 39 105 598 8,715
Balance at 30 June 2025
Cost or valuation7,973 165 169 598 8,905
Accumulated depreciation- (126) (64) - (190)
Closing net book value7,973 39 105 598 8,715
Year ended 30 June 2026
Generation
assets at
fair value
$M
Other
assets
at cost
$M
Right-of-
use assets
$M
Capital work
in progress
at cost
$M
Total
$M
Opening net book value 7,973 39 105 598 8,715
Additions 2 1 22 680 705
Transfers 746 12 53 (811) -
Disposals (5) - - - (5)
Impairment - (3) - (1) (4)
Gain on revaluation 93 - - - 93
Loss on revaluation (7) - - - (7)
Depreciation charge for the year (319) (14) (18) - (351)
Closing net book value 8,483 35 162 466 9,146
Balance at 30 June 2026
Cost or valuation 8,483 175 244 466 9, 368
Accumulated depreciation - (140) (82) - (222)
Closing net book value 8,483 35 162 466 9,146
Assets carrying values
All assets, except generation plant and equipment, are recognised at cost less accumulated depreciation.
Fixed assets, excluding land, are depreciated on a straight-line basis over their expected useful lives.
Generation plant and equipment is originally recognised at cost and subsequently measured at fair value
less subsequent accumulated depreciation. An independent valuation is completed annually to determine
the fair value of these assets. Any surplus on revaluation is recognised in the asset revaluation reserve,
except where it offsets a previous decrease in value that was recognised in the income statement. Any
accumulated depreciation or impairment recognised between revaluations is eliminated against the gross
carrying amount of the asset at the date of the revaluation and the net amount is adjusted to the revaluated
amount of the asset.
B. OPERATING ASSETS
NOTE B1. PROPERTY, PLANT AND EQUIPMENT
The Group's leases relate to properties, geothermal steam royalties, office equipment, and transmission
equipment. These leases are recognised as a right-of-use asset and a corresponding liability. The initial value
of the asset and liability represent the present value of all future lease payments. Lease payments are recorded
as a repayment of the lease obligation and interest expense. Lease assets are depreciated on a straight-line
basis over the term of the lease. The most significant leases relate to office buildings and transmission lines.
The weighted average incremental borrowing rate applied to lease liabilities in 2026 was 5.68% (2025: 5.62%).
The Group's lease interest was $7m (2025: $7m) and lease liability is disclosed in note D2.
As at 30 June 2026, the capital work in progress balance is largely made up of the following projects:
s Kaiwaikawe Wind Farm;
s Arapuni left abutment seepage control;
s Hydro refurbishment programme for Maraetai I, Ātiamuri, and Ōhākurī.
44MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
AREA OF KEY JUDGEMENT
Generation asset valuation
The key assumptions used in the valuation include the forecast of the future wholesale electricity
price path, generation volumes, projected operational and capital expenditure, asset life assumptions
and discount rates. In all cases, there is an element of judgement required as valuations make use of
unobservable inputs including wholesale electricity prices over time of between $87/MWh and $138/
MWh (2025: $89/MWh and $217/MWh), average operational expenditure of $290m p.a. (2025: $279m
p.a.), net average production volumes of 9,891 GWh p.a. (2025: 8,913 GWh p.a.), a post-tax discount
rate of between 7.1% and 7.5% for wind assets backed by long-term Power Purchase Agreements
(2025: 7.2% to 7.6%) and between 7.8% and 8.2% for other assets (2025: 7.9% to 8.3%). The valuation
also assumes the ongoing operation of large industrial customers, no material changes to the wholesale
market regulatory regime, hydro and geothermal fuel supply being sustained over the modelled horizon,
and no material changes to generation consent conditions.
The risk type, time horizon, likelihood and materiality of potential climate change impacts were
considered in the valuation. Only physical risks were considered relevant for the purposes of the
valuation, however the expected financial impact of these risks fell within the valuation range.
Generation assets are classified as Level 3 in the fair value hierarchy due to the use of non-market
observable inputs in the valuation. The following table outlines the valuation impact of changes
to assumptions that the valuation is most sensitive to, keeping all other valuation inputs constant.
NOTE B1. PROPERTY, PLANT AND EQUIPMENT CONT.
Depreciation
Depreciation is calculated on a straight-line basis on all property, plant and equipment other than freehold
land and capital work in progress, so as to write down the assets to their estimated residual value over their
expected useful lives.
The annual depreciation rates are as follows:
2026 2025
Office fixtures and fittings, including fit-out2-33%2-33%
Generation assets1-20%1-20%
Computer hardware5-33%5-33%
Other plant and equipment2-33%2-33%
Vehicles5-33%5-33%
Right-of-use assets2-50%2-50%
Disposal of Southdown power station site
In June 2026, the Group sold Lot 1 of the former Southdown power station site. The disposal resulted
in a gain on sale before tax of $12m which is recognised in gain on sale of property, plant and equipment
in the income statement.
Impairment loss of NOW New Zealand Limited
Following the announced closure of NOW New Zealand Limited, the Group recognised a $4m impairment
loss to reduce the affected fixed assets and capital work in progress to their recoverable amounts, being
the higher of value in use and fair value less costs of disposal.
Assets carried at fair value
All generation assets shown at valuation were revalued using a net present value methodology by PwC,
an independent valuer, as at 30 June 2026. This resulted in an increase of $82m and $11m to the carrying
value of Ngā Tamariki geothermal station and Kaiwera Downs wind farm respectively, and a decrease of $7m
to the carrying value of Tararua wind farm. As a consequence of the revaluation, accumulated depreciation
on these generation assets has been reset to nil.
SensitivityValuation impact
2026
$M
2025
$M
Future wholesale electricity price path+/- 10%$1,267 / ($1,262)$1,241 / ($1,238)
Discount rate+/- 0.5%($658) / $771($555) / $646
Operational expenditure+/- 10%($215) / $215($193) / $193
The carrying amount of revalued generation assets, had they been recognised at cost, would have
been $3,739m (2025: $2,877m).
45MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
Intangible
software
$M
Acquired
intangible
assets
$M
Rights
$M
Carbon
units
$M
Work in
progress
$M
Total
$M
Year ended 30 June 2025
Opening net book value 42 11 13 49 17 132
Additions - - - 10 20 30
Transfers 13 - - - (13) -
Disposals - - - (16) - (16)
Surrendered units - - - (5) - (5)
Amortisation for the year (27) (11) (1) - - (39)
Closing net book value 28 - 12 38 24 102
Balance at 30 June 2025
Cost 246 46 34 38 24 388
Accumulated amortisation (218) (46) (22) - - (286)
Closing net book value 28 - 12 38 24 102
Year ended 30 June 2026
Opening net book value 28 - 12 38 24 102
Additions - - - 5 29 34
Transfers 25 - - - (25) -
Disposals - - - (4) - (4)
Surrendered units - - - (5) - (5)
Amortisation for the year (23) - (1) - - (24)
Closing net book value 30 - 11 34 28 103
Balance at 30 June 2026
Cost 271 46 34 34 28 413
Accumulated amortisation (241) (46) (23) - - (310)
Closing net book value 30 - 11 34 28 103
Intangible software
Acquired computer software licences and internally
developed software assets are recognised at cost
and amortised over their estimated useful lives
of 1 - 15 years (2025: 1 - 15 years).
Acquired intangible assets
As part of the acquisition of NOW in FY2023,
the Group allocated part of the purchase price
to the customer list acquired ($30m, assessed useful
life of 2.5 years). Following the announced closure of
NOW New Zealand Limited, residential customers
are expected to be migrated to the Company.
Rights
Rights, of which land access rights are the most
significant, acquired to further the Group's generation
development programme are stated at cost less
accumulated amortisation and any accumulated
impairment losses. Rights, which have a finite life,
are amortised over the life of the rights, which range
from 5 to 60 years (2025: 5 to 60 years).
Carbon units and emissions obligations
Purchased carbon units are recorded at cost
(purchase price). At 30 June 2026, the Group held
a total of 1,137,646 units within intangible assets
(2025: 1,200,886 units). Carbon units, when allocated
or purchased for purposes other than trading units,
are recorded as intangible assets and are not revalued
subsequent to initial recognition.
Carbon units that are surrendered to the Government
in compensation for the Group's emissions obligations
are recognised as an expense in the income statement
and a reduction to intangible assets in the balance
sheet, based on the weighted average cost of the
units surrendered.
Emissions obligations are recognised as a current
liability as the obligation is incurred. Up to the level
of units held, the liability is recorded at the carrying
value of those units intended to settle the liability.
Contracts for the purchase of carbon units are
recognised when they are settled.
In 2026, the Group sold 70,000 units with an original
cost of $4m, for a total of $3m (2025: 522,650 units
with an original cost of $16m, sold for $33m).
NOTE B2. INTANGIBLE ASSETS
46MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
2026
$M
2025
$M
Receivables
Trade receivables and revenue accruals 404 395
Allowance for credit loss (12)(9)
Net trade receivables and accruals 392 386
ASX prudential deposits 79 77
Prepayments 30 35
501 498
Not due
Less than
30 days
past due
More than
30 days
past due
More than
60 days
past dueTotal
Expected loss rate%1%3%16%57%-
Gross carrying amount
– trade receivables
$M 97 16 4 18 135
Expected credit loss$M 1 - 1 10 12
2026
$M
2025
$M
Movements in the allowance for impairment loss were as follows:
Balance at beginning of the year 9 6
Charge for the year 10 7
Amounts written off (7) (4)
Balance at end of the year 12 9
The following table details the loss allowance at 30 June 2026:
Trade receivables are measured at amortised cost using the effective interest method. Customers are typically
invoiced on a monthly basis. Large commercial and industrial customers are billed on a calendar month basis,
while for most mass market customers billing occurs on a rolling cycle over the year. Revenue accruals for
unbilled telecommunication services and unread gas and electricity meters at balance date involve an estimate
of consumption for each unread meter based on past consumption history.
Generation revenue accruals are derived mostly from generation sales to the New Zealand wholesale market
at the prevailing spot price at the grid injection point. Revenue is invoiced by the Wholesale Market Clearing
Manager on a calendar month basis reflecting actual metered generation at the stations.
Trade receivables are non-interest bearing and are generally on 30 day terms for large commercial and
industrial customers and mass market customers are on 18 day terms. For terms and conditions of related
party receivables refer to note E2.
The Group applies the simplified approach permitted under NZ IFRS 9
Financial Instruments to measure
expected credit losses (ECL) for trade receivables. This approach requires recognition of a lifetime ECL for
all receivables, with the provision assessed at each reporting date. Trade receivables are grouped by ageing
category and expected credit losses are calculated using historical credit loss experience, adjusted where
necessary for forward-looking information and known customer-specific risks. Impairment losses are
recognised in the income statement, with a corresponding loss allowance recognised on the balance sheet.
No ECL is calculated on unbilled revenue accruals. Trade receivables are written off when the Group determines
there is no reasonable expectation of recovering the outstanding balance. Any amounts recovered after
write-off are credited to the income statement.
Prudential deposits act as security to cover mark-to-market movement in the ASX futures position.
C. WORKING CAPITAL AND PROVISIONS
NOTE C1. RECEIVABLES
47MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
2026
$M
2025
$M
Consumable stores 43 48
Carbon units – at fair value less cost to sell 73 78
Inventories 116 126
Carbon units – at fair value
less cost to sell
2026
units
000
2026
value
$M
2025
units
000
2025
value
$M
Opening balance 1,324 78 1,329 67
Purchases - - - -
Sales - - (5) -
Revaluation movement - (5) - 11
Closing balance 1,324 73 1,324 78
2026
$M
2025
$M
Balance at the beginning of the year8985
Provisions made during the year 1 -
Discounting movement2 4
Balance at the end of the year92 89
Current 14 -
Non-current78 89
92 89
Cost of consumable stores is determined on a weighted average basis and includes expenditure incurred
in acquiring consumable stores and bringing them to their final condition and location. Consumable
stores include consumables held to service and repair operating plants and finished goods relating to
the customer business.
Inventories also include carbon units (NZUs) which management has identified as held for trading.
These are measured at fair value less cost to sell. When there is a change in fair value, the gain or loss on
revaluation is recognised in the income statement. Fair value is calculated based on the CommTrade spot
price at the valuation date. As a result, the units are classified as Level 1 in the fair value hierarchy. In 2026,
the Group entered into a covered call option over its carbon units held for trading, refer to note F1.
Provisions have been recognised for the abandonment and subsequent restoration of areas from which
geothermal resources have been utilised. The provision is calculated based on the present value of the Group's
best estimate of the expenditure required, and the likely timing of settlement. Changes in these estimates
made during the year are reported as an increase in provisions and a reduction in revaluation reserves.
The increase in provision resulting from the passage of time (the discount effect) is recognised as an interest
expense. The provision will be utilised when the individual wells are abandoned. The expected costs of wells
to be abandoned in FY27 are classified as current. The wells are estimated to have an average useful life
of 19 years (2025: 19 years).
NOTE C2. INVENTORIESNOTE C3. PROVISIONS
48MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
D. FUNDING
NOTE D1: SHARE CAPITAL AND DISTRIBUTIONS
2026
Number of shares
(M)
2025
Number of shares
(M)
Ordinary shares on issue 1,425 1,407
Weighted average number of shares less treasury shares 1,417 1,400
Earnings per share2026 2025
Profit for the year attributable to owners of the parent ($M) 3211
Weighted average ordinary shares 1,417 1,402
Less weighted average treasury shares - (2)
Weighted average ordinary shares for earnings per share (millions) 1,417 1,400
Basic and diluted earnings per share (cents)22.660.07
Dividends declared and paidCents per share
2026
$M
2025
$M
Final dividend for 2024 14.0 - 195
Interim dividend for 2025 9.6 - 135
Final dividend for 2025 14.4 202 -
Interim dividend for 2026 10.0 142 -
344 330
MERCURY BUILDING 33 BROADWAY
Dividends of $344m were declared during the year (2025: $330m), however only $227m was paid in cash
to shareholders in the year (2025: $256m). The remainder relates to amounts reinvested under the DRP.
The imputation credit account was in a surplus balance at 31 March 2026, as legally required. At 30 June
2026, the imputation credit account had a surplus of $30m (2025: a surplus of $29m).
All ordinary shares are fully paid, do not have a par value, have equal voting rights and share equally
in dividends and any surplus on winding up.
The Group issued 18,075,782 new ordinary shares (2025: 6,952,650) to provide shares to shareholders
that elected to reinvest the net proceeds of cash dividends payable under the dividend reinvestment
programme (DRP).
MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
Changes in borrowings from financing activities
2026
$M
2025
$M
Borrowings at the start of the year2,279 1,941
Net cash borrowed152 261
Cash paid on principal of lease liability(18) (18)
Cash financing costs capitalised to the balance sheet(1) (4)
Non-cash change in lease obligations22 22
Non-cash change in fair value adjustment31 66
Non-cash change in deferred financing costs3 2
Non-cash change in accrued interest4 9
Borrowings at the end of the year2,4722,279
Borrowing
currency
denominationMaturityCoupon
Carrying
amount
Carrying
amount
2026
$M
2025
$M
Debt measured at amortised cost
Commercial paper programmeNZD< 3 monthsFloating89129
Debt in fair value hedge relationships
USPP - US$45mUSDDec-20254.60%- 73
Green retail bonds - MCY040NZDSep-20262.16%200 197
Green retail bonds - MCY030NZDSep-20271.56%199 194
Green retail bonds - MCY060NZDJun-20285.64%156 160
Green wholesale bondsAUDNov-20282.92%230 206
Green wholesale bondsNZDOct-20301.92%139 138
Green wholesale bondsAUDMar-20315.25%473 444
Green retail bonds - MCY080NZDApr-20335.17%250 -
Capital bonds - MCY050NZDMay-20525.73%254 256
Capital bonds - MCY070NZDJul-20546.42%362 368
Lease liabilities129 125
Deferred financing costs(9) (11)
Total carrying value of borrowings2,472 2,279
Current330 233
Non-current2,1422,046
2,4722,279
NOTE D2. BORROWINGS
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Some borrowings are in fair value hedge relationships and have fair value
adjustments to their carrying amounts, attributable to the risk being hedged through interest rate swaps (IRS)
and cross currency IRS. Fair value is calculated using the discounted cash flow method, with applicable market
yield curves adjusted for the Group's credit rating. Fair value adjustments as at 30 June 2026 resulted in a
$41m increase to carrying amount (30 June 2025: $10m increase).
The Group is required to comply with certain financial covenants in respect of its borrowings. During the 2026
and 2025 financial years, the Group was in compliance with all of its financial covenants.
Current borrowings include all drawn bank facilities, borrowings with a contractual maturity of less than
one year, accrued interest (2026: $23m, 2025: $19m) and current lease liabilities (2026: $18m, 2025: $13m).
Undrawn borrowing facilities at 30 June 2026 totalled $610m, net of commercial paper on issue (2025: $570m).
50MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
Bank facilities
The Group has $700m of committed and unsecured
bank loan facilities as at 30 June 2026 (30 June
2025: $700m).
Commercial paper programme
The Group has a $400m commercial paper
programme which is fully backed by committed
and undrawn bank facilities. Notes issued under
the programme are short-term money market
instruments, unsecured and unsubordinated and
targeted at professional investors. The programme
is rated A2 by S&P Global.
Green bonds
The Group has $1,615m of green bonds (principal
and accrued interest) as at 30 June 2026 (30 June
2025: $1,360m). The green bond proceeds have
been tracked in accordance with the Green Financing
Framework. On 1 April 2026, the Group issued $250m
of new 7-year unsecured, unsubordinated, fixed rate
green bonds (MCY080 bonds). The MCY080 bonds
are due to mature on 1 April 2033 and have a fixed
interest rate of 5.17% per annum.
USPP
The Group's United States Private Placement (USPP)
of $59m NZD face value was repaid in full during
2026. The carrying amount at 30 June 2026 is nil
(2025: $73m).
Deeds
The Group has entered into a Master Trust Deed
and Supplementary Trust Deeds for all its NZD
denominated Senior Fixed and Floating Rate Bonds,
with The New Zealand Guardian Trust Company
Limited acting as trustee for the holders.
NOTE D2. BORROWINGS CONT.
Net interest expense
2026
$M
2025
$M
Interest expense on borrowings112 124
Interest expense on lease liabilities7 7
Unwind of discount on provisions2 4
Less capitalised interest(24) (14)
Total interest expense97 121
Interest income(3) (4)
Net interest expense94 117
NOTE D3. NET INTEREST EXPENSE
TARARUA WIND FARM
The Group has agreed, subject to certain exceptions,
not to create or permit to exist a security interest
over or affecting its assets to secure indebtedness,
and to maintain certain financial covenants. There
has been no breach of the terms of these deeds.
The Group has entered into a Negative Pledge Deed
in favour of its bank financiers in which the Group has
agreed, subject to certain exceptions, not to create or
permit to exist a security interest over or affecting its
assets to secure its indebtedness, and to maintain
certain financial ratios in relation to the Group. These
undertakings and covenants also applied to the terms
and conditions of the USPP that was fully repaid in
the year. There was no breach of the terms of this
deed or the terms and conditions of the USPP.
Lease liabilities
The Group has entered into various lease contracts
for the right to use land and buildings and office
equipment and is also deemed to be a lessee of
transmission equipment. Lease payments of $25m
were made in 2026, including lease interest expense
of $7m (2025: payments of $24m, lease interest
expense of $7m).
The Group has capitalised interest costs related to the construction of new generation assets. The average
rate used to determine the amount of borrowing costs eligible for capitalisation as at 30 June 2026 was
4.74% (30 June 2025: 5.33%).
Total interest paid in the year was $115m (2025: $135m) of which $24m (2025: $14m) is included in payments
for acquisition of property, plant and equipment in the cash flow statement.
51MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
2026
$M
2025
$M
Within one year 144 545
One to five years 236 56
Later than five years 134 -
Capital commitments 514 601
Capital commitments
Capital commitments include purchases of both
property, plant and equipment (PP&E) and intangibles.
PP&E commitments include contracts for
rehabilitation of hydro generation assets at Maraetai,
Ātiamuri, and Ōhākurī, and contracts for construction
of wind farms at Kaiwaikawe and Kaiwera Downs.
Intangible commitments are contracts to purchase
New Zealand emissions trading scheme (NZ ETS)
units. In the event the NZ ETS is terminated, the
existing purchase agreements, which cover the one
year period from the end of the reporting period,
will also terminate.
Operating commitments
As part of its day-to-day operations, the Group from
time to time enters various operating arrangements
and commitments with third parties to support and
enhance the Group’s long-term licence to operate,
provide access to land, and use of natural resources.
These operating arrangements may be short,
medium, or long-term in nature.
Contingencies
1. Kawerau Geothermal Outage Insurance Claim
In June 2021, the Kawerau Geothermal Station
experienced an unplanned outage due to
mechanical failure. An outage was undertaken
in June 2023 to install replacement equipment.
NOTE D4. COMMITMENTS
AND CONTINGENCIES
The Group has received advice that, if the claim
adversely affects its title or ability to access or
operate its hydro assets, the Group may bring
a claim seeking recourse against the Crown.
Material parts of the claim have been struck out
in related judicial review proceedings. However,
the claimants are seeking leave to appeal to the
Supreme Court.
c. Wai Mana Whenua High Court proceedings
regarding water allocation rights
Māori plaintiffs collectively known as Wai Mana
Whenua have issued proceedings against the
The Group received insurance proceeds in respect
of the outage. Additional insurance proceeds may
be received once the total loss has been confirmed.
Any further proceeds will be recognised as revenue
when receipt is virtually certain.
2. Claims relating to Geothermal Resources,
Land, Fresh Water
The Group holds land and has interests in fresh water
and geothermal resources that are subject to claims
brought against the Crown. These claims are disclosed
as contingent liabilities as the value, timing and
likelihood of success remain uncertain.
a. Wai 2358 and related claims
A claim by the New Zealand Māori Council relating
to fresh water and geothermal resources was lodged
with the Waitangi Tribunal in 2012. The Tribunal
has concluded that Māori have residual proprietary
rights and interests in fresh water and geothermal
resources, with the Government to consider how
such rights and interests may be best addressed.
The inquiry is continuing, and may result in further
law reform recommendations.
Various hapū and iwi have filed related claims in the
Waitangi Tribunal concerning geothermal resources
associated with certain geothermal fields in which
the Group has interests and operations including
the Mōkai, Rotokawa, Kawerau and Ngā Tamariki
geothermal fields. The impact of these claims on the
Group’s operations and interests remains uncertain.
b. Pouākani Claims Trust No 2
The Pouākani Claims Trust No 2 and a group of
kaumātua filed a claim in the Māori Land Court
seeking a declaration that parts of the Waikato
riverbed are Māori customary land, including the
riverbed beneath the Whakamaru, Maraetai I and II
and Waipapa dams and related power stations.
The Group holds title to the relevant riverbed land
and associated hydro assets and operates those
assets as part of its business. The claim also
extends to interests in water flowing over the riverbed.
NGĀ TAMARIKI GEOTHERMAL STATION
Crown concerning Māori interests in water and
water allocation. The Group is not a party to those
proceedings. The outcome of those proceedings,
and any implications for the legal and regulatory
framework governing freshwater resources,
remain uncertain.
3. Other Contingent Assets or Liabilities
The Group has no other material contingent
assets or liabilities.
52MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
2026
$M
2025
$M
Profit for the year321 1
Adjustments for non-cash movements:
Depreciation and amortisation 375 357
Revaluation loss of generation assets 7 -
Impairment 16 -
Adjustment for change in fair value of financial instruments 80 361
Change in the fair value of carbon units held for trading 5 (11)
Share of profit from associates and joint ventures (4) (13)
Loss/(gain) on disposal of carbon units 1 (18)
Gain on sale of property, plant and equipment (12) -
Movement in effect of discounting on long-term provisions 2 4
Amortisation of contract assets and costs 54 50
Decrease in deferred tax(40) (126)
Surrender of carbon units 5 7
Net cash provided by operating activities before
change in assets and liabilities
810 612
Change in assets and liabilities during the year:
(Increase)/decrease in trade and other receivables and prepayments(8) 136
Decrease in inventories 5 5
(Increase) in contract assets and costs, net of amortisation (48) (58)
Decrease in trade payables and accruals (31)(148)
Increase/(decrease) in provision for tax 34 (64)
Net cash inflow from operating activities 762 483
NOTE D5. RECONCILIATION OF PROFIT TO OPERATING CASH FLOWS
WAIKATO RIVER
53
MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
E. GROUP STRUCTURE
NOTE E1. ASSOCIATES AND JOINT ARRANGEMENTS
The Group financial statements include the following:
Interest held
Name of entityPrincipal activityType20262025Country
TPC Holdings LimitedInvestment holdingAssociate
1
25.00%25.00%New Zealand
Rotokawa Joint VentureSteamfield operationJoint operation64.80%64.80%New Zealand
Ngā Awa Pūrua Joint VentureElectricity generationJoint operation65.00%65.00%New Zealand
EnergySource LLCInvestment holdingJoint venture
1
20.86%20.86%United States
EnergySource Minerals LLCMineral extractionJoint venture
1
9.68%11.37%United States
Forest Partners Limited PartnershipForestry managementAssociate
1
10.00%10.00%New Zealand
1
Associates and joint ventures are equity accounted under NZ IAS 28 Investments in Associates and Joint Ventures.
AssociatesJoint ventures
2026
$M
2025
$M
2026
$M
2025
$M
Balance at the beginning of the year89 63 6 6
Additional investment during the year - 31 3 -
Share of earnings/(losses) 7 13 (3) -
Share of movement in other comprehensive income and reserves 14 (9) - -
Distributions received during the year (17) (9) - -
Impairment (6) - (6) -
Other movements 3 - - -
Balance at the end of the year 90 89 - 6
Although the Group holds a majority interest in Rotokawa Joint Venture (Rotokawa) and Ngā Awa Pūrua Joint
Venture (Ngā Awa Pūrua), the contractual arrangements require the unanimous consent of the joint operations
for decisions about the relevant activities. Accordingly, the Group does not control the arrangements.
The contractual terms give the parties rights to the assets and output of the arrangements, and obligations
for their liabilities. The arrangements are therefore classified as joint operations.
The Group’s ownership share in Forest Partners Limited Partnership (FPLP) entitles it to appoint one member
to the Advisory Committee with voting rights equal to those of all other members. The Group has determined
that this results in significant influence over the financial and operational decisions of FPLP and has classified
the investment as an associate under NZ IAS 28
Investments in Associates and Joint Ventures.
Even though the Group holds a 9.68% interest in EnergySource Minerals LLC, the contractual arrangements
require the unanimous consent of the parties sharing control for decisions regarding the relevant activities.
The Group therefore has joint control and classifies its interest as a joint venture.
At the end of the year the Group had outstanding advances to Rotokawa of $1m (2025: $1m), and outstanding
advances of $4m (2025: $4m) to its associate, TPC Holdings Limited (TPC). Refer to note E2 for the terms and
conditions of these related party receivables.
During the year, the Group recognised a $6m impairment loss on its investment in EnergySource LLC, reducing
the carrying amount of the investment to its assessed recoverable amount of nil.
The Group also recognised a $6m impairment on its investment in TPC, reducing the carrying amount from
$61m to its recoverable amount of $55m. The recoverable amount was determined using value-in-use, based
on the Group’s share of the present value of forecast cash flows expected to be generated by TPC through to
24 December 2037, with no terminal value beyond that date.
The impairment arose primarily from revised forecast electricity prices and changes in forecast operating cash
flows. The value-in-use calculation incorporated assumptions regarding forecast electricity prices, generation
volumes, operating costs, capital expenditure and the proceeds expected on termination of the investment.
The cash flows were discounted using a pre-tax discount rate of 9.29% (2025: 9.36%).
The carrying amount of TPC is equal to its recoverable amount at 30 June 2026. A 10% reduction in forecast
electricity prices would reduce the recoverable amount by $13m, while a 0.5 percentage point increase in
the discount rate would reduce it by $1m.
54MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
NOTE E2. RELATED PARTY TRANSACTIONS
Majority shareholder
The majority shareholder of the Company is the New Zealand Government. Transactions cover a variety
of services including energy, postal, travel and tax with various other Government-owned entities.
Transactions with related parties
The Group entered into a number of contracts with other Crown-controlled entities to hedge against wholesale
electricity price risk, the most significant being a contract for difference with Genesis Energy Limited for
generation produced at the Waipipi wind farm. During the year, the Group also entered into the Strategic
Energy Reserve – Huntly Firming Option with Genesis Energy Limited, Contact Energy Limited and Meridian
Energy Limited, an arrangement designed to support security of supply. All entities in this arrangement, except
Contact Energy Limited, are Crown-controlled entities.
The Company also has investments in subsidiaries, associates and joint arrangements, all of which are
considered related parties.
As these are consolidated financial statements, transactions between related parties within the Group have
been eliminated. Consequently, only those transactions between entities which have some owners external
to the Group have been reported below:
Transaction value
2026
$M
2025
$M
Associates
Management fees and service agreements received 13 22
Energy contract settlements (paid)/received (8) 17
Joint operations
Management fees and service fees received and paid 28 30
Energy contract settlements (paid)/received (8) (15)
Transaction value
2026
$000
2025
$000
Key management personnel compensation (paid and payable) comprised:
Directors' fees 1,135 1,164
Benefits for the Chief Executive and Chief Financial Officer:
Salary and other short-term benefits 2,955 4,271
Share-based payments 524 284
4,614 5,719
An advance to TPC Holdings Limited of $4m (30 June 2025: $4m) is interest free and is repayable on
demand subject to certain conditions being met.
The advance to Rotokawa of $1m (30 June 2025: $1m) carries a floating interest rate. Repayments under
the advance are linked to the level of receipts under the geothermal energy supply agreement. There is
no fixed repayment date; the agreement will terminate on receipt of any outstanding balances.
No related party debts have been written off, forgiven, or any impairment charge booked.
The decrease in salary and other short-term benefits compared with the prior period reflects the departures
and appointments of the Chief Executive and Chief Financial Officer during FY25, which had temporarily
increased costs in that year.
The increase in share-based payments reflects the introduction of an equity-settled deferred share rights
component within executives' short-term incentive (STI) plan, alongside the FY26–FY28 long-term incentive
(LTI) grant.
Other transactions with key management personnel
Key management personnel are those people with responsibility and authority for planning, directing and
controlling the activities of the Group. Key management personnel for the Group are considered to be the
Directors, the Chief Executive and the Chief Financial Officer.
Some Directors also provide directorship services to other third party entities.
The Chief Executive and the Chief Financial Officer provide directorship services to subsidiaries, associates
and joint operations as part of their employment without receiving any additional remuneration.
The Group purchases Directors' and Officers' insurance for the benefit of key management personnel
in relation to the services they provide to the Group.
55MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
F. R I S K
NOTE F1. DERIVATIVE FINANCIAL INSTRUMENTS
The Group uses a range of derivative contracts in order to manage risk and hedge against cash flow and
fair value volatility. It is the Group's policy to apply hedge accounting to reduce volatility in profit or loss,
and where possible, derivatives are designated into hedging relationships under NZ IFRS 9
Financial
Instruments
as either cash flow or fair value hedges.
Interest rate and cross currency interest rate derivatives
Interest rate and cross currency swaps are used to manage interest rate risks. Interest rate swaps where the
Group pay-fixed, and receive-floating interest rates are designated as cash flow hedges in a relationship with
a portion of floating rate debt exposure. Interest rate swaps where the Group receive-fixed, and pay-floating
interest rates are designated as fair value hedges in a relationship with the swap rate on fixed rate bonds.
Cross currency swaps are designated as both fair value and cash flow hedge relationships with the USPP and
Australian denominated green wholesale bonds (refer note D2) depending on the component of the debt
being hedged: the risk free (swap) rate as a fair value hedge; and the credit margin as a cash flow hedge.
Foreign exchange derivatives
Foreign exchange forward contracts are designated as cash flow hedges in a relationship with forecast
purchases of inventory and capital equipment, mainly for maintenance and construction of generation assets.
Electricity price derivatives
Where possible, electricity price derivatives are designated as cash flow hedges in a relationship with
forecast electricity sales and purchases. Exceptions are swaps and options used for trading (electricity
futures, options and financial transmission rights) as well as other contracts that have been deemed
not eligible for hedge accounting due to price reset mechanisms, termination options or variable volume
structures (e.g. wind and solar power purchase agreements).
Carbon options derivatives
Covered call options relating to NZUs held for trading are used to optimise the NZU portfolio and benefit
from favourable NZU market movements.
The fair values of derivative financial instruments are summarised in the following table:
2026
$M
2025
$M
CURRENT ASSETS
Electricity price derivative 170 143
Interest rate derivative 14 9
Cross currency interest rate derivative 6 20
190 172
CURRENT LIABILITIES
Electricity price derivative 190 197
Interest rate derivative 18 23
Cross currency interest rate derivative 2 5
Foreign exchange derivative - 9
Carbon option derivative 1 -
211 234
NON-CURRENT ASSETS
Electricity price derivative 117 83
Interest rate derivative 13 16
Cross currency interest rate derivative 57 -
187 99
NON-CURRENT LIABILITIES
Electricity price derivative 246 326
Interest rate derivative 20 35
Cross currency interest rate derivative - 3
266 364
56MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
Change in fair value of financial instruments
2026
$M
2025
$M
Realised (loss)/gain on unhedged electricity swaps (3) 192
Unrealised loss on unhedged derivatives and hedge
ineffectiveness through income statement
(138) (340)
Change in fair value of derivative financial instruments per income statement(141) (148)
TAUPŌ CONTROL GATES
The unrealised changes in fair values of all financial instruments recognised in the income statement and
other comprehensive income are summarised below:
Income statementOther comprehensive income
2026
$M
2025
$M
2026
$M
2025
$M
Interest rate and cross currency
interest rate derivatives
29 2 6 (16)
Electricity price derivatives(175) (347) 258 127
Foreign exchange rate derivatives - - 9 (10)
Ineffectiveness of cash flow hedges
recognised in the income statement
8 5 - -
Total unrealised change in fair value
of derivative financial instruments
(138) (340) 273 101
Movement in cash flow hedge reserve on hedged unrealised gains/losses
2026
$M
2025
$M
Opening balance (140) (217)
Effective portion of cash flow hedges recognised in the reserve 273 101
Amount transferred to balance sheet (12) 7
Equity accounted share of associates' movement
in other comprehensive income
24 (8)
Tax effect of movements(75) (23)
Closing balance 70 (140)
Unrealised gains and losses on hedged derivatives are recognised in the cash flow hedge reserve and other
comprehensive income. When the gains or losses are realised, they are released from the cash flow hedge
reserve to the balance sheet or the income statement in line with the underlying hedged item.
NOTE F1. DERIVATIVE FINANCIAL INSTRUMENTS CONT.
MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
AREA OF KEY JUDGEMENT
Fair value estimation
Valuation techniques
All fair value balances are assigned to a fair value hierarchy level as defined by NZ IFRS 13
Fair Value
Measurement.
No transfers occurred between hierarchy levels in the year ended 30 June 2026.
The following table provides a breakdown of the fair value of derivatives by the source of key
valuation inputs:
30 June 2026
Quoted
market price
Market
observable
inputs
Non-market
observable
inputsTotal
Valuation technique
Level 1
$M
Level 2
$M
Level 3
$M
$M
Financial assets
Derivative instruments
Electricity price derivatives 49 - 238 287
Interest rate derivatives - 27 - 27
Cross currency interest
rate derivatives
- 63 - 63
49 90 238 377
Financial liabilities
Derivative instruments
Electricity price derivatives 157 - 279 436
Interest rate derivatives - 38 - 38
Cross currency interest
rate derivatives
- 2 - 2
Carbon option derivatives - - 1 1
157 40 280 477
Net financial asset/(liability) (108) 50 (42)(100)
30 June 2025
Quoted
market price
Market
observable
inputs
Non-market
observable
inputsTotal
Valuation technique
Level 1
$M
Level 2
$M
Level 3
$M
$M
Financial assets
Derivative instruments
Electricity price derivatives 13 - 213 226
Interest rate derivatives - 25 - 25
Cross currency interest
rate derivatives
- 20 - 20
13 45 213 271
Financial liabilities
Derivative instruments
Electricity price derivatives 97 - 426 523
Interest rate derivatives - 58 - 58
Cross currency interest
rate derivatives
- 8 - 8
Foreign exchange rate derivatives - 9 - 9
97 75 426 598
Net financial asset/(liability) (84) (30) (213) (327)
NOTE F1. DERIVATIVE FINANCIAL INSTRUMENTS CONT.
58MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
NOTE F1. DERIVATIVE FINANCIAL INSTRUMENTS CONT.
Valuation of Level 1 financial instruments
Level 1 financial derivatives include ASX futures and financial transmission rights with fair values determined
using quoted prices. These prices represent regularly occurring market transactions on an orderly basis.
Valuation of Level 2 financial instruments
The fair values of Level 2 derivatives are determined using discounted cash flow models. Listed below are
the Level 2 derivatives and the key inputs to the valuation model.
DerivativeValuation input
Cross Currency Interest Rate Swap (CCIRS)Forward interest rate price curve and
foreign exchange rate curve
Interest rate swapForward interest rate curve
Foreign exchange contractForward foreign exchange rate curve
Valuation of Level 3 financial instruments
The Group uses various methods in estimating the fair value of an electricity financial derivative.
Where the fair value of a derivative is calculated as the present value of the estimated future cash
flows of the instrument, there are two key inputs being used:
20262025
Wholesale electricity price path$96/MWh to $135/MWh$100/MWh to $182/MWh
Discount rate3.1% to 24.3%3.2% to 21.7%
The wide range in discount rates are driven by entering into longer term derivative contracts.
Forward electricity spot prices in the front end of the curve in FY26 were lower, driven by futures prices,
thus resulting in a lower maximum price of $135/MWh in FY26 compared to $182/MWh in FY25.
The selection of valuation inputs requires significant judgement, and therefore there is a range of reasonably
possible assumptions in respect of these inputs that could be used in estimating the fair values of these
derivatives. Maximum use is made of observable market data when selecting inputs and developing
assumptions for the valuation technique.
Reconciliation of Level 3 unrealised fair value movements
The unrealised Level 3 fair value movements in the income statement are recognised within change
in the fair value of financial instruments, along with realised gains/losses on financial instruments not
in a hedging relationship.
Financial instruments
in a hedging
relationship
Financial instruments
not in a hedging
relationshipTotal
2026
$M
2025
$M
2026
$M
2025
$M
2026
$M
2025
$M
Opening balance sheet position (155) (271) (58) 236 (213) (35)
New contracts 18 (3) 21 3 39 -
Matured contracts 32 102 (4) - 28 102
Gains, losses, and ineffectiveness
Through the income statement 6 8 (58) (297) (52) (289)
Through other
comprehensive income
156 9 - - 156 9
Closing balance sheet position 57 (155) (99) (58)(42) (213)
Sensitivity of Level 3 fair value measurements
The Group uses unobservable inputs to measure the fair value of Level 3 electricity derivatives. These inputs are
most sensitive to changes in electricity forward prices. These electricity price derivatives are in a net liability
position on the balance sheet. The Group has a net 'sell' exposure with fixed strike prices so that an increase
in the forward price would likely result in a decrease in fair value and a decrease in the forward price would
likely result in an increase in fair value. Refer to note F2 for sensitivity analysis on all electricity derivatives.
The Group also holds carbon options, for which the key valuation input is the forward carbon price.
Impact on post tax profit
2026
$M
2025
$M
Electricity price increased by 10% (143) (73)
Electricity price decreased by 10% 123 67
59MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
Deferred ‘inception’ gains/(losses) on Level 3 derivatives
There is a presumption that, when derivative contracts are entered into at an arm's length basis,
the fair value at inception is zero. The contract price of non-exchange-traded electricity derivative
contracts are agreed on a bilateral basis, the pricing for which may differ from the prevailing derived
market price curve (ASX futures and the Group's internal price curve) for a variety of reasons. In these
circumstances, an inception adjustment is made to bring the initial fair value of the contract to zero
at inception. This inception adjustment is amortised over the life of the contract by adjusting the
future price path used to determine the fair value of the derivatives by a constant amount to return
the initial fair value to zero.
The table below details the movements in inception value gains/(losses) included in the fair value
of derivative financial assets and liabilities:
Electricity price derivatives
2026
$M
2025
$M
Opening deferred inception losses (17) (1)
Deferred inception (losses)/gains on new hedges (119) 4
Deferred inception gains/(losses) realised during the year 27 (20)
Closing inception losses(109) (17)
NOTE F1. DERIVATIVE FINANCIAL INSTRUMENTS CONT.NOTE F2. FINANCIAL RISK MANAGEMENT
The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks
to proactively manage these risks with the aim of protecting shareholder wealth. Exposure to price, credit, foreign
exchange, liquidity and interest rate risks arise in the normal course of the Group's business. The Group's principal
financial instruments comprise cash, trade receivables and accruals (not prepayments), advances, payables and
accruals, borrowings and derivative financial instruments.
(A) Market risk
Nature of risk exposureRisk Management Policy
Electricity price
The Group is exposed to movements in the
spot price of electricity arising from the sale
and purchase of electricity in the market.
The Group enters into electricity derivative
contracts, including swaps, futures, options and
PPAs that establish a fixed price at which future
quantities of electricity are purchased and sold.
The electricity contracts are periodically settled
with any difference between the contract price
and the electricity spot price settled between the
parties. Cash flow hedge accounting is applied.
Foreign exchange
The Group is exposed to foreign exchange risk as
a result of transactions denominated in a currency
other than the Group's functional currency. The
currencies giving rise to this risk are primarily US
Dollar, Japanese Yen, Euro, Yuan and Australian Dollar.
The Group's policy is to enter into forward
exchange contracts to hedge its committed
foreign denominated expenditure programme.
Interest rate
The Group has exposure to interest rate
risk to the extent that it borrows for fixed
terms at floating interest rates.
The Group uses mostly interest rate swaps and rarely
interest rate options to manage this exposure.
60MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
NOTE F2. FINANCIAL RISK MANAGEMENT CONT.
Derivatives in designated hedging relationships
ElectricityForeign exchangeInterest rate
2026
$M
2025
$M
2026
$M
2025
$M
2026
$M
2025
$M
Notional amount 857 986 35 215 4,248 3,432
Maturity1-10 years1-9 years0-3 year0-1 year0-7 years0-6 years
Carrying amount – asset 181 44 - - 90 45
Carrying amount – liability(81) (202) - (9) (39) (66)
Recognised in OCI 258 127 9 (10) 6 (16)
Ineffectiveness 6 7 - - 2 (2)
Hedge Ratio1:11:11:11:11:11:1
At inception, each hedge relationship is formalised in hedge documentation. Hedge accounting is discontinued
when the hedge instrument expires or is terminated, exercised or no longer qualifies for hedge accounting.
The Group determines the existence of an economic relationship between the hedging instrument and
the hedged item based on the amount and timing of respective cash flow, reference interest rates, currency,
maturities and notional amounts. The Group assesses whether the derivative designated in each hedging
relationship is expected to be, and has been, effective in offsetting the changes in cash flows of the hedged
item using the hypothetical derivative method.
The Group’s policy is to designate derivatives in hedge relationships on inception when their fair value is zero,
applying a hedge ratio of 1:1.
The main source of ineffectiveness for electricity contracts relates to the difference between the market
price and the strike price at inception of the contracts.
For interest rate derivatives, the weighted average hedge rate for cash flow hedges (receive floating, pay fixed
rate) is 3.9% (2025: 4.0%) and for fair value hedges (pay floating, receive fixed rate) is 3.5% (2025: 3.2%).
Market risk sensitivity analysis
The following summarises the potential impact of increases or decreases in the relevant market risk exposures
of the Group on profit (unhedged derivatives) and on other components of equity (hedged derivatives) from
the change in the derivative valuation. The analysis does not take into account dynamic market response over
time, which could be material. The electricity sensitivities disclosed below include Level 1 derivatives.
Impact on post-tax profitImpact on post-tax equity
2026
$M
2025
$M
2026
$M
2025
$M
Electricity forward price increased by 10% (149)(70) (40)(60)
Electricity forward price decreased by 10% 128 63 40 60
Forward foreign exchange
rates increased by 10%
- - (2) (14)
Forward foreign exchange
rates decreased by 10%
- - 3 17
Interest rates higher by 100 bps (44)(44)17 19
Interest rates lower by 100 bps 46 46 (18) (19)
(B) Credit risk
Nature of risk exposureRisk Management Policy
The carrying amounts of financial
assets recognised in the balance sheet
best represent the Group's maximum
exposure to credit risk at the reporting
date without taking account of any
collateral held by way of customer bonds.
The Group manages its exposure to credit risk under policies
approved by the Board of Directors. The Group performs credit
assessments on all electricity customers and normally requires
a bond from commercial customers who have yet to establish a
suitable credit history. In the event of a failure by a retailer to settle
its obligations to the Energy Clearing House, following the exhaustion
of its prudential security, a proportionate share of the shortfall will
be assumed by all generator class market participants. The Group
would be impacted in the event that this occurs. It is the Group's
policy to only enter into derivative transactions with banks that it has
signed an ISDA master agreement with, and which hold a minimum
long-term S&P Global (or Moody’s equivalent) credit rating of A-.
61MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
NOTE F2. FINANCIAL RISK MANAGEMENT CONT.
(C) Liquidity risk
Nature of risk exposureRisk Management Policy
Liquidity risk is the risk that the
Group will not be able to meet its
financial obligations as they fall due.
The Group manages its exposure to liquidity risk under policies
approved by the Board of Directors. Policies require that prescribed
headroom is available in undrawn and committed facilities to cover
unplanned needs and that a limited amount of facilities mature
over the immediate 12 month forward-looking period. The Group's
objective is to maintain a balance between continuity of funding
and flexibility through the use of various funding sources.
The following liquidity risk disclosures reflect all contractually fixed payoffs, repayments and interest from
recognised non-derivative financial liabilities. The timing of cash flows for non-derivative financial liabilities
is based on the contractual terms of the underlying contract.
The information on contractual cash flows are presented on an undiscounted basis, consequently the totals
will not reconcile with the amounts recognised in the balance sheet.
s Net settled derivatives include interest rate derivatives and electricity price derivatives.
s Gross settled derivatives relate to foreign exchange derivatives that are used to hedge future purchase
commitments.
s Foreign exchange derivatives may be rolled on an instalment basis until the underlying transaction
occurs. While the maturity of these derivatives are short-term the underlying expenditure is forecast
to occur over different time periods.
While the following tables give the impression of a liquidity shortfall, the analysis does not take into account
expected future operating cash flows or committed and undrawn debt facilities that will provide additional
liquidity support. The expectation of cash receipts in relation to derivative assets should also be considered
when assessing the ability of the Group to meet its obligations.
30 June 2026
Less than 6
months
$M
6 to 12
months
$M
1 to 5
years
$M
Later than 5
years
$M
Total
$M
Liquid financial assets
Cash and cash equivalents 77 - - - 77
Receivables 471 - - - 471
Non derivative financial liabilities
Payables and accruals(348) - - - (348)
Borrowings (340) (47) (1,469) (1,825) (3,681)
Lease liabilities (13) (13) (70) (113) (209)
Derivative financial liabilities
Derivative liabilities – net settled
Electricity price derivatives (186) (106) (223) (244) (759)
Interest rate derivatives (10) (8) (21) - (39)
Cross currency interest rate derivatives - - - - -
Derivative liabilities - gross settled
Foreign exchange derivatives inflows 16 6 14 - 36
Foreign exchange derivatives outflows (15) (6) (14) - (35)
Net outflows(348) (174) (1,783) (2,182)(4,487)
62MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
NOTE F2. FINANCIAL RISK MANAGEMENT CONT.
30 June 2025
Less than 6
months
$M
6 to 12
months
$M
1 to 5
years
$M
Later than 5
years
$M
Total
$M
Liquid financial assets
Cash and cash equivalents 86 - - - 86
Receivables 463 - - - 463
Non derivative financial liabilities
Payables and accruals (377) - - - (377)
Borrowings (233) (44) (1,051) (2,231) (3,559)
Lease liabilities (12) (12) (79) (86) (189)
Derivative financial liabilities
Derivative liabilities - net settled
Electricity price derivatives(85)(124)(346)(114)(669)
Interest rate derivatives(11)(12)(36)(3) (62)
Cross currency interest rate derivatives (2) (1) - - (3)
Derivative liabilities - gross settled
Foreign exchange derivatives inflows 207 - - - 207
Foreign exchange derivatives outflows (215) - - - (215)
Net outflows (179) (193) (1,512) (2,434) (4,318)
(D) Capital risk management
The Board policy is to maintain a sustainable financial structure for the Group, recognising the Group's targeted
long-term credit rating of BBB+ assigned by S&P Global and the risks from predicted short- and medium-
term economic, market and hydrological conditions along with estimated financial performance. Capital
is managed to provide sufficient funds to undertake required asset reinvestment as well as to finance new
generation development projects and other growth opportunities to increase shareholder value at a rate
similar to comparable private sector companies.
In order to maintain or adjust the capital structure, changes can be made to the amount paid as dividends
to shareholders, capital can be returned or injected or assets sold to reduce borrowings.
Consistent with other companies in the industry, the Group uses the gearing ratio as one of its metrics to
monitor capital. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total
borrowings (both current and non-current) adjusted for fair value, less cash. Total capital is calculated
as shareholders' equity plus net debt. The gearing ratio is calculated below:
2026
$M
2025
$M
Borrowings at carrying value2,4722,279
Add back: fair value adjustments(41)(10)
Less cash and cash equivalents(77)(86)
Net debt2,354 2,183
Total equity5,2634,903
Total capital7,6177,086
Gearing ratio30.9%30.8%
Under the Negative Pledge Deed in favour of its bank financiers the Group must, in addition to not
exceeding its maximum gearing ratio, exceed minimum interest cover ratios and a minimum shareholder
equity threshold.
The Group seeks to maintain a debt to EBITDAF ratio of between 2.0 and 3.0 times, on average through
time, to maintain credit metrics sufficient to support its credit rating on an on-going basis. For the purpose
of calculating this ratio and consistent with the rating agency treatment, adjustments are made to net debt
and EBITDAF based on the definitions provided by the rating agency. For the year ended 30 June 2026,
the Group had a debt to EBITDAF ratio of 2.0 times (2025: 2.5 times).
63MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2026
G. OTHER
NOTE G1. SHARE-BASED PAYMENTS
Long-term incentive plan
The Group operates an equity-settled share-based long-term incentive plan (LTI) for executives. The LTI
is designed to enhance the alignment between shareholders and those executives most able to influence
the performance of the Group.
Under the LTI, executives are granted shares at nil cost if vesting conditions are met. Performance
is measured against a combination of relative total shareholder return against industry peers and
out-performance against the Group’s internal return on capital.
Each LTI represents the grant of in-substance nil-price options to executives. The cost of the share-based
payment is recognised over the vesting period. Performance is measured over a three-year period for all
grants. For the FY26–FY28 grant, options satisfying the performance conditions are subject to a number
of conditions including an additional one-year holding period before vesting, resulting in a four-year vesting
period, aligned to the 2030 strategy. The total amount expensed is based on the Group’s best estimate of the
number of equity instruments that will ultimately vest, taking into consideration the likelihood that service
conditions will be met, multiplied by the grant date fair value of each option.
Short-term incentive plan
During the year, the Group introduced an equity-settled deferred share rights component within the executives’
short-term incentive plan (STI). Under the plan, executives will receive a portion of their FY26 award as
deferred share rights, which are in substance nil price options, if performance measures are achieved.
No STI share rights had been issued at 30 June 2026. The number of share rights to be issued will be
determined after 30 June 2026 based on the final STI outcome as determined by the Board and the
applicable volume weighted average price calculation under the plan rules. Any share rights issued
are subject to a one-year holding period before vesting.
During the year, the Group expensed $334,915 in relation to the STI equity-settled share-based payment
transactions (2025: nil) and $794,090 in relation to LTI equity-settled share-based payment transactions
(2025: $637,518).
Movements in the number of in-substance nil-price options are as follows:
20262025
Balance at the beginning of the year 379,756 827,556
Options granted 358,302 207,091
Options forfeited (113,098) (413,552)
Options exercised - (241,339)
Balance at the end of the year624,960379,756
59,567 were exercisable at the end of the year (2025: nil) with the remaining options under the plan having
a weighted average life of 2.3 years (2025: 1.5 years).
NOTE G2. SUBSEQUENT EVENTS AND OTHER MATTERS
The Board has approved a fully imputed final dividend of 17.0 cent s per share to be paid on 30 September
2026. The Group plans to continue with its dividend reinvestment plan, with a strike price to be determined
by the average of daily volume weighted average sale price for a share, calculated on all price setting
trades of shares that take place through the NZX Main Board over a period of five trading days starting
on 7 September 2026, less a 2% discount.
On 8 July 2026, the Group acquired a 12.7% minority equity interest in Datagrid Holding Group NZ Ltd
(Datagrid NZ) for US$30m (NZ$53m). Datagrid NZ is developing a large-scale data centre project in Southland.
The Group had signed a 140MW power purchase option agreement with Datagrid during the year, which
remains in force.
There are no other material events subsequent to reporting date that would affect the fair presentation
of these financial statements.
MERCURY BUILDING 33 BROADWAY
64MERCURY 2026 INTEGRATED REPORT |MENULOOKING AT THE NUMBERS
C L I MAT E S TAT EM EN T 2026
TE TAUĀKI ĀHUARANGI
Our Climate Statement outlines how we are delivering on our
purpose in the face of climate change, by identifying and
responding to climate-related risks and opportunities (CRROs)
across our business. We detail our approach across strategy, risk,
Our strategy is designed to build earnings resilience
through operating our assets well, growing renewable
generation, allocating capital with discipline, and
actively managing climate-related risks, positioning
us to support customer decarbonisation.
governance, and metrics, in line with the Aotearoa New Zealand
Climate Standards, presenting our evolving understanding of climate
change on our business. The Climate Statement incorporates our
Greenhouse Gas Inventory.
Our climate-related opportunities include
the low-carbon transition driving growth in
demand for electrification, capital markets
interest in low-carbon operations, and
growing demand for smart energy solutions.
We have updated our emissions reduction
targets to reflect updated methodology, more
mature technical evidence, and lessons
learned while progressing our initial targets.
The updated targets provide a clearer view
of what we will deliver and when.
Climate-related risks include greater
variability in weather patterns affecting
hydro generation, growing atmospheric/
storm intensity which affects generation
assets, changing market and policy settings,
and global supply chain constraints.
Our scenario analysis includes testing the
resilience of our strategy across different
time horizons.
READ MORE PG76READ MORE PG72
READ MORE PG79READ MORE PG68READ MORE PG82
65MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
CLIMATE STATEMENT 2026
CONTENTS
67 INTRODUCTION
67 SUMMARY OF KEY POINTS
68 STRATEGY
68 TRANSITION PLAN ASPECTS
OF OUR STRATEGY
71 OUR CLIMATE-RELATED RISKS
AND OPPORTUNITIES
79 OUR CLIMATE TARGETS
81 SCENARIO DEVELOPMENT PROCESS
82 SCENARIO ANALYSIS
85 DATASETS AND MODELS USED
85 OUR APPROACH TO ASSESSING
MATERIALITY
86 METRICS AND TARGETS
87 MEASURING OUR IMPACT – CROSS
INDUSTRY MEASURES AND OTHER
ACTIVITY METRICS
87 FUGITIVE EMISSIONS
88 EXPOSURE OF OUR ASSETS AND ACTIVITIES
TO CLIMATE RISKS AND OPPORTUNITIES
89 GOVERNANCE
89 BOARD OVERSIGHT OF CLIMATE-
RELATED RISKS AND OPPORTUNITIES
89 SKILLS AND COMPETENCIES TO
PROVIDE OVERSIGHT OF CLIMATE-
RELATED RISKS AND OPPORTUNITIES
MERCURY AND CLIMATE CHANGE
Mercury NZ Limited is a Climate Reporting Entity
under the Financial Markets Conduct Act 2013. This
Climate Statement has been prepared in compliance
with the Aotearoa New Zealand Climate Standards
(NZ CS) and is for the 2026 Financial Year
FY26 Climate Statement
ROBERT HAMILTON
CHAIR, AUDIT AND FINANCIAL RISK COMMITTEE
18 AUGUST 2026
SCOTT ST JOHN
CHAIR
89 MANAGEMENT’S ROLE IN ASSESSING
AND MANAGING CLIMATE-RELATED
RISKS AND OPPORTUNITIES
90 MANAGEMENT REMUNERATION IS
LINKED TO MANAGEMENT OF CLIMATE-
RELATED RISKS AND OPPORTUNITIES
92 OVERVIEW AND RELATIONSHIP BETWEEN
RESPONSIBILITIES OF OUR BOARD,
SUB-COMMITTEES AND MANAGEMENT
93 RISK MANAGEMENT
93 PROCESSES FOR IDENTIFYING AND
ASSESSING CLIMATE-RELATED RISKS
93 RISK MANAGEMENT FRAMEWORK
93 MANAGING CLIMATE-RELATED RISKS
94 GREENHOUSE GAS EMISSIONS INVENTORY
96 GHG EMISSIONS CALCULATIONS
AND RESULTS
97 EMISSIONS INCLUSIONS
99 EMISSIONS SOURCE EXCLUSIONS
101 APPENDIX A – HISTORICAL DATA –
GHG EMISSIONS INVENTORY SUMMARY
102 IMPACT OF UNCERTAINTIES
102 APPENDIX B – HISTORICAL DATA –
GHG EMISSION, REDUCTIONS AND
INTENSITY CALCULATIONS FOR
MERCURY’S ELECTRICITY
IMPORTANT INFORMATION FOR READERS
Mercury has used best efforts in the preparation of
this Climate-Related Disclosure to provide accurate
information as at 18 August 2026 but cautions
reliance being placed on representations that are
necessarily subject to significant risks, uncertainties
or assumptions.
This Climate-Related Disclosure contains forward
looking statements, including climate-related
metrics, climate scenarios, estimated climate
projections, targets, assumptions, forecasts, and
statements of Mercury’s future intentions. These
statements necessarily involve assumptions,
forecasts and projections about Mercury’s present
and future strategies and the environment in which
Mercury will operate in the future, which are
inherently uncertain and subject to limitations,
particularly as to inputs, available data, and
information which is likely to change. Mercury has
used its best efforts to provide a reasonable basis
for forward-looking statements but is constrained
by the novel and developing nature of this subject
matter. Climate-related forward-looking statements
may therefore be less reliable than other statements
Mercury may make in its annual reporting.
Descriptions of the qualitative and quantitative,
current and anticipated financial and other impacts
of climate change draw on and/or represent
estimated figures only. In particular, the risks and
opportunities described in this report, and the
forecast emissions reductions, may not eventuate or
may be more or less significant than anticipated.
There are many factors that could cause Mercury’s
actual results, performance or achievement of
climate-related metrics (including targets) to differ
materially from that described, including climatic,
government, consumer, and market factors outside
of Mercury’s control.
Nothing in this Climate-Related Disclosure should
be interpreted as capital growth, earnings, or any
other legal, financial, tax, or other advice or guidance.
66MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
INTRODUCTION
This Climate Statement outlines how we are delivering
on our purpose in the face of climate change by
identifying and responding to climate-related risks
and opportunities (CRROs) across our business.
We see ourselves as a key enabler of the transition
to a low-carbon future. Climate change is integrated
into our purpose and strategy, influencing our
investment decisions, risk management, and the
way we work with our customers, partners, and
other stakeholders. The transition requires a
transformation of the energy system and we are
playing a leading role in building that future through
our renewable generation pipeline, demand-side
innovation, and partnerships.
The environment in which we operate continues
to evolve, in particular:
s Growing evidence that recent global
temperatures have exceeded 1.5°C above
pre-industrial levels, while significant changes
are still required at pace to align activity with
a 1.5°C pathway.
s Increasing electricity demand over time
with electrification and digital infrastructure
investment reinforces the need for additional
renewable generation, subject to contracting,
timing, and market conditions.
s A changing regulatory and policy landscape,
with an increased focus on ensuring that security
of supply and access to affordable energy is
maintained while the sector navigates the
transition to a low-carbon future.
As New Zealand transitions to a low-carbon future
and more renewables are introduced to our energy
system, we are conscious that electricity supply
needs to stay reliable and affordable. In the
near-term, our energy system faces challenges to
security of supply, including a shortage in domestic
natural gas and a risk of prolonged dry weather
leading to lower hydro lake levels. This means that
thermal fuel, such as coal or potentially imported
LNG, is likely to continue to play a supporting role
to ensure the security of the broader energy system
in the near-term, particularly in those dry years
when hydro lakes are low.
Our primary role is to accelerate renewable supply
while supporting an orderly transition that maintains
security and affordability for customers and
continuing to operate in a financially prudent way.
In the near term, this includes supporting
sector-wide security arrangements, while
continuing to invest in renewable generation
and demand-side flexibility.
We are focused on ensuring that our business
is resilient and successful through the transition
by actively identifying and managing the climate-
related risks we face, while pursuing the
opportunities that the energy transition unlocks.
This Climate Statement outlines our approach
across strategy, risk, governance, and metrics, in line
with the Aotearoa New Zealand Climate Standards,
and reflects our evolving understanding of the
impacts of climate change on our business.
OUR PURPOSE
Tiakina te anamata, mā te tūhono
i ngā tāngata me ngā wāhi o te inamata.
Taking care of tomorrow:
connecting people and place today.
Key changes since our FY25
climate statement
s Greenhouse Gas Inventory is included
in the Climate Statement.
s We adjusted the scenarios and CRROs
based on internal engagement and
data reviews.
s The emissions reduction targets have
been updated to reflect updated SBTi
methodology, what we have learned
through delivery, and a clearer view
of what is achievable by 2030.
Our scenarios have four
different pathways
s Teal where global temperature increase is
limited to 1.5°C (after an overshoot to 1.6°C).
s Purple where global temperature increase
is limited to 2.5°C.
s Amber where global temperature increase
is limited to 3°C.
s Maroon where global temperature increase
is greater than 3°C.
Based on our scenarios
s We identified material CRROs that could
affect our business and captured our
view of material climate-related current
impacts to us.
Our material climate-related
risks
s Greater variability in weather patterns
(including more frequent high inflow events
and droughts) may reduce hydro generation
flexibility and increase trading risk.
s Growing intensity of atmospheric conditions
(including storm events) may cause
disruption to assets.
s Market and policy settings may prioritise
different aspects of the energy trilemma
as we transition to a low-carbon future.
s Global decarbonisation constraints (supply
chain, labour, and infrastructure) may delay
renewable development.
Our material climate-related
opportunities
s The low-carbon transition may lift
electricity demand.
s Capital markets may support investing
in low-carbon operations.
s The low-carbon transition may drive
demand for smart energy solutions
and new products and services.
We are continuing to take action to reduce
our own emissions and support the transition
to a lower-emissions future. Further details
are outlined in our FY26 Climate Action Plan.
SUMMARY OF KEY POINTS
67MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
CLIMATE STATEMENT 2026
STRATEGY
Our strategy is shaped by the risks and opportunities
of climate change. As we transition to a low-carbon
future, our focus is on delivering reliable and
affordable renewable energy, while supporting
customers, communities, and shareholders through
this change.
TRANSITION PLAN ASPECTS
OF OUR STRATEGY
Our strategy is designed to build earnings resilience
through renewable generation growth, disciplined
capital allocation, and active management of
climate-related risks. This positions us to support
customer decarbonisation while maintaining
financial discipline through the transition and
reflects our business model and strategy, which are
designed to respond to our identified climate-related
risks and opportunities. Our generation assets
produce electricity from 100% renewable sources:
hydro, geothermal, and wind, across 19 power stations
nationwide. We are also a retailer of electricity, gas,
broadband and mobile services. We serve more
than 900,000 customer connections across
electricity, gas, telecommunications, and mobile,
supported by ~1,300 permanent employees.
For more information on Our Business Model
see page 4 of our FY26 Integrated Report.
ASPIRATIONS
FY35FY30
PRIORITIESSTRATEGIC OBJECTIVES
Earn trust and enable
growth through partnerships
Create success with others
Having a deliberate focus on deepening trust with
key relationships to achieve shared goals.
KŌTUITANGA/Partnerships
We are the trusted partner of choice.
Connected and
high-performing culture
Perform with an inclusive, connected culture
Unleashing an inclusive, curious and connected
culture to lift business performance.
N GĀ TĀN GATA/Our People
We learn and grow to realise our full potential.
Capture energy
transition growth
Accelerate the shift to a low-carbon future
Leading the transition by creating solutions for customers to
electrify and support the development of a smart energy system.
KIRITAKI/Customer
Customers are at the heart of what we do.
Earnings transformation
Achieve what matters most through financial growth
Achieving sustainable performance to invest in the future
and drive value.
ARUMONI/Commercial
We are leaders in commercial growth.
Generation
development uplift
Deliver more reliable and renewable energy
Taking care of our generation assets and actioning options
for growth.
KAITIAKITANGA/Stewardship
Our assets and the natural environment are thriving.
Climate change considerations have shaped the
development of key aspects of our strategy – our
purpose, FY30 Priorities, FY35 Aspirations, and our
strategic objectives. Our strategy is aligned to our
key value drivers, namely, Kaitiakitanga/Stewardship,
Kiritaki/Customer, Kōtuitanga/Partnerships, Ngā
Tāngata/Our People, and Arumoni/Commercial.
These value drivers guide our transition plan by
focussing action on the areas most critical to our
business as we navigate the low-carbon transition.
We recognise that the most significant contributions
we can make to the energy transition are to deliver
more reliable and renewable energy to power
Aotearoa, and to accelerate the shift to a low-carbon
future by working with customers to support
decarbonisation. We also need to reduce our own
emissions, align financial growth with the transition,
and develop a high-performing workforce with
the capabilities required to deliver successfully.
The actions described below support our response
to our material CRROs, including building renewable
generation, managing hydrological variability and
physical asset risks through our asset management
and risk processes, supporting customer
electrification and demand flexibility, engaging on
policy settings, strengthening supplier relationships,
and maintaining access to sustainable finance.
68MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
THE TRANSITION PLAN ASPECTS OF OUR STRATEGY ARE:
KAITIAKITANGA STEWARDSHIP
Delivering more reliable and renewable energy.
Developing more reliable renewable energy is
one of the most meaningful ways we can support
a low-carbon economy. We are focused on developing
a diverse pipeline of wind, geothermal, and solar
opportunities to support future demand and
electrification, while continuing to invest in existing
assets that remain critical to reliable energy supply.
Bringing large-scale projects to market involves
navigating consenting challenges, policy and
regulatory change, supply chain constraints,
demand, and global competition for renewable
technology. Our decisions are also guided by our
emissions reduction targets and include initiatives
such as reinjection of non-condensable gases
(NCG) at our geothermal sites.
Examples of how our strategy and business model
are evolving include:
s Building a renewable generation pipeline that
is diverse in location and energy source. In FY26,
we completed the expansion of Ngā Tamariki
Geothermal Station, completed construction
of Stage 2 of Kaiwera Downs Wind Farm
and commenced generation at Kaiwaikawe
Wind Farm.
KIRITAKI CUSTOMER
Accelerating the shift to a low-carbon future.
We are committed to supporting customers through
the energy transition, recognising that electrification,
affordability, and access to new technologies affect
people in different ways. As demand increases,
s Improving the performance, flexibility, and lifespan
of our assets, including a $29.6 million, four-year
refurbishment of Maraetai II Hydro Station, which
will improve the station’s operational reliability
and extend its life by 20 years.
s Reducing operational emissions through initiatives
such as capturing and reinjecting non-condensable
gases (NCG) at Ngā Tamariki Geothermal Station.
In FY26, we invested approximately $1.3 million
in this initiative, with an estimated 13,490 tCO
2
e
abated. We also commissioned the fifth generation
unit (OEC5) at the station, adding 46MW of
renewable baseload capacity through the $220
million expansion project.
s Strengthening supply chain resilience through
supplier collaboration with existing and potential
new suppliers.
s Working with regulators and sector partners
to improve consenting processes and align
renewable development with environmental
and planning standards.
s Enabling greater demand flexibility to support
system efficiency and better align electricity
demand with renewable generation.
In FY26, 99% of our growth capital expenditure
(CAPEX), i.e. $560 million, was allocated to
renewable generation development, reflecting
disciplined capital allocation. We have dedicated
teams focused on generation development and the
management of our portfolio.
particularly from electric vehicles and new electricity
uses, we are focused on empowering customers
with the tools, information, and support they need
to successfully navigate this shift.
Examples of how our strategy and business model
are evolving include:
s Delivering a retail gas strategy that supports the
reduction of our scope 3 emissions by helping
customers understand their energy options and
transition pathways.
s Working with Intellihub and Bluecurrent to
scale smart hot water management, resulting
in 50,000 connected cylinders over winter 2026.
This supports demand flexibility and help manage
peak electricity demand.
s Trialling Rinnai’s GridSmart device to test the
technology and better understand how smart
hot water cylinders can increase demand flexibility
while helping ensure customers have reliable
access to hot water.
s Entering long-term electricity supply
agreements with industrial customers, including
Datagrid, to support new electricity demand
and provide greater confidence for renewable
generation investment.
s Launching Flex Rates, time-of-use plans
which give residential customers and small
and medium-sized business customers greater
control over electricity spend while helping
manage load on distribution networks.
s Delivering material support to social retailers,
Nau Mai Rā and Toast Electric, providing care
beyond our own customer base. This included
59GWh volume sold to social retailers in FY26.
We have dedicated teams focused on new
propositions, hardship support, and community
engagement to ensure our services meet
evolving needs.
69MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
ARUMONI COMMERCIAL
Achieving what matters most through
financial growth.
Our commercial strategy reflects shifting market
dynamics and growing demand for sustainable,
low-emissions operations. Our long-term earnings
growth is supported by disciplined investment
in renewable generation, matched to demand
growth, while actively managing market volatility,
weather-related variability, and policy uncertainty.
We recognise capital markets’ preference for
climate-aligned investments, which is expanding
access to green finance and reinforcing the value
of sustainable operations.
Examples of how our strategy and business model
are evolving include:
s Updating our Green Financing Framework which
supports green bonds and loans, enabling
financing and refinancing of eligible projects.
s Considering CRROs when making investment
decisions and evaluating our portfolio.
s Offering Power Purchase Agreements (PPAs)
to support electrification and attract new load.
In FY26, this included a 15-year, 140MW Power
Purchase Option Agreement (PPOA) with Datagrid.
s Strengthening financial management to better
address weather, regulatory, and market volatility.
s Building commercial capability to identify
revenue opportunities from increasing electricity
demand driven by electrification.
We are investing in the tools and processes needed
to manage climate-related financial risks and capture
emerging opportunities. We have commercial teams
focused on pricing and forecasting, contributing
toward our long-term financial resilience and ability
to thrive in a low-carbon economy.
NGĀ TĀNGATA OUR PEOPLE
Performing with an inclusive,
connected culture.
Developing a capable, resilient, high-performing and
inclusive workforce is essential to our long-term success
in a low-emissions future. As CRROs evolve, so do our
people, through the development of future skills, climate
literacy, and strong engagement with our identity,
attitude and purpose. We are committed to attracting,
retaining, and growing the widest possible pool of talent
to build the workforce of the future, one that reflects
the communities we serve and brings a diversity of
perspectives to guide and deliver meaningful change.
Examples of how our strategy and business model
are evolving include:
s Investing in learning and development to build
the capability required to deliver renewable
generation projects and support the transition
to a low-emissions energy system.
s Building workforce and asset management
capability to support long-term sustainable
performance.
s Supporting the wellbeing, inclusion, and
adaptability of our people through targeted
programmes such as the Safety Intelligence
Programme, a framework designed to raise the
standard of workplace safety by making safety
clear, human, and effective, while embedding
capability into everyday practice.
s Embedding our climate considerations into
decision-making through ongoing education,
engagement, and leadership across the business.
s Building an inclusive workforce that leverages
diverse backgrounds, perspectives, and
capabilities, strengthening leadership to deliver
on our strategic priorities.
We have dedicated teams focused on talent
development, organisational capability, and internal
engagement supporting our broader people
development programme.
THE TRANSITION PLAN CONT.
WAIPIPI WIND FARM
KŌTUITANGA PARTNERSHIPS
Creating success with others.
Strong partnerships are essential to our climate
transition. We work closely with iwi, regulators,
advocacy groups, communities, and industry to
navigate the complexity of the energy transition.
By working together, we aim to support effective
policy, maintain social licence, and share the benefits
of decarbonisation, supporting long-term value
creation for shareholders and broader stakeholders.
Examples of how our strategy and business model
are evolving include:
s Deepening engagement with iwi and hapū where
our assets are located to support long-term,
values-aligned relationships.
s Supporting local communities through initiatives
such as our Community Funds, which support
projects and organisations that contribute to
community wellbeing in regions where we operate.
s Advocating for policy settings that enable
renewable development, operational flexibility,
and equitable transition outcomes.
s Participating in sector forums to support
resilience, security of supply, and system-level
planning.
s Strengthening partnerships with community
providers that support customers.
s Supporting new and existing customers with
decarbonisation opportunities as well as new
demand sources.
We have dedicated teams focused on building and
maintaining trusted partnerships. This includes
teams focused on iwi relations, regulatory affairs,
and community engagement, working across the
business to deliver outcomes aligned to our strategy
that benefit both our shareholders and the
communities we serve.
70MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
The following tables detail material CRROs and
their anticipated unmitigated impacts (the term
‘unmitigated’ refers to the potential financial impact
if no management actions are taken, and the risk
materialises without additional interventions). The
likelihood and anticipated impact of these is based
upon our risk matrix (details in the Risk Section). We
have calculated the reasonably expected anticipated
financial impact of each material CRRO, considering
a range of factors. Where an impact pathway would
be material but not reasonably expected to occur,
or if the information available is highly uncertain,
we have provided commentary to explain what
we have considered.
The anticipated impact ranges for our CRROs
have been aligned to the financial impact ranges
in our Risk Management Framework to support
consistency across reporting periods. These ranges
are less than $75k, $75k-$750k, $750k-$7.5m,
$7.5m-$75m, $75m-$750m, and greater than
$750m. This approach reflects indicative risk
assessment ranges intended to show the general
quantum of potential impact, rather than precise
forecasts. These ranges should not be read as
forecasts, guidance or expected earnings impacts.
They are designed to support risk assessment,
planning, and governance, while avoiding a false
sense of accuracy. For more information on risks,
see the Risk section of this Climate Statement.
CRROs have been identified by considering our four
scenarios over a 30-year time horizon. In doing this,
we considered all parts of our value chain—including
Our time horizons for scenario analysis and CRROs align with our business planning and strategy processes:
CURRENT:
LESS THAN 1 YEAR
SHORT-TERM:
1 TO 3 YEARS
MEDIUM-TERM:
3 TO 10 YEARS
LONG-TERM:
10 TO 30 YEARS
Aligning with our 3-year business planning cycle.Aligning with our strategy and strategic scenarios.Aligning with the expected useful life of new
generation development.
Aligning to immediate planning and operational
considerations.
upstream, operational, and downstream activities
(without any exclusions). For physical risks, this
included considering how climate hazards may affect
us through changes to inflows, physical damage
to assets, disruption to access or surrounding
infrastructure, reduced ability to export generation,
increased costs, and changes to generation revenue.
CRROs influence strategic business decisions across
multiple functions and are reflected in our planning
processes through:
s The setting of strategic objectives and
performance incentives in the Group Scorecard
each financial year.
s The application of our Risk Management
Framework to assess physical risks to generation
plant and assets and prioritising any required
mitigation work in business plans.
s The deployment of capital and funding for the
development of new renewable generation.
s The consideration of portfolio risks when
progressing new generation development.
When allocating capital, we consider climate-related
transition impacts, such as decarbonisation
initiatives and emissions reductions pathways,
given their significance on future electricity demand
growth. We also account for CRROs over multiple
time horizons in developing our capital investment
plans. All our material CRROs are relevant to the
energy sector in New Zealand.
OUR CLIMATE-RELATED RISKS AND OPPORTUNITIES
KARĀPIRO
ARAPUNI
WAIPĀPA
MARAETAI
I AND II
WHAKAMARU
ŌHĀKURĪ
ĀTIAMURI
AR ATIATIA
NGĀ AWA
PŪRUA
+
LAKE TAUPŌ
ROTOKAWA
+
MŌKAI
+
KAWERAU
NGĀ TAMARIKI
MAHINERANGI
KAIWERA
DOWNS
TURITEA
TARARUA
WAIPIPI
KAIWAIKAWE
++
HYDRO S TATIONS
WIND FARMS
GEOTHERMAL STATIONS
+ not 100% owned by Mercury
++ under construction
71MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
OUR CLIMATE-RELATED RISKS
* For more information on RCPs and SSPs, view the Datasets and Models Used section
of this Climate Statement.
Greater variability in weather
patterns (including more frequent
high inflow events and droughts)
may reduce hydro generation
flexibility and increase trading risk.
MANAGEMENT RESPONSE:
• We manage our peak customer sales commitments by adopting a
portfolio approach that integrates generation development, existing
operations, and financial hedging, aiming to balance sales with our
physical generation and financial contract purchases to maintain
resilience during dry hydrological conditions.
• Our environmental and planning teams engage with governing
and consenting bodies, iwi, and catchment partners to manage
the operational impacts of lake storage levels and ensure we have
MATERIAL CURRENT IMPACTS:
• There were no material impacts on repairs and maintenance or
additional upgrade capital costs in FY26.
TIME HORIZON: Current, short, medium, long-term.
TIME HORIZON OVER WHICH RISK BECOMES MATERIAL:
Short to long-term (1–30 years).
LIKELIHOOD: This risk is assessed as being probable
(1–10% probability in any given year) to materialise.
RISK TYPE: Chronic Physical.
ASSESSMENT METHODOLOGY:
We considered two impact pathways - drought and extreme wet events.
For droughts, our methodology estimated lost revenue from reduced
hydro generation due to projected increases in dry days (<1mm rainfall)
around Taupō, based on Earth Sciences New Zealand’s RCP* 4.5 climate
projections. Generation loss is calculated against precipitation projection
and using national average wholesale electricity prices from Electricity
Authority data (2004–2026).
For extreme wet events (>25mm rainfall), our approach considered both
potential increased short-term generation energy margin impacts and
ANTICIPATED IMPACT RANGE: Significant: $7.5m-75m
annualised over the short to long-term.
FINANCIAL METRICS: An aggregate of: net decrease in energy
margin, increase in spillway repairs, maintenance, and upgrade costs.
LONG-TERMMEDIUMCURRENTSHORT
IMPLICATIONS:
More volatile catchment inflows from changing and increasingly extreme
weather patterns, including changing rainfall patterns, make it more difficult
to optimally manage hydro storage. This manifests through increased risk
of spill during high inflow events and reduced generation volumes during
low inflow periods and droughts, as well as potential biosecurity and
water quality challenges (e.g. algal blooms or invasive species), along
the Waikato Hydro Scheme. During low inflow periods and droughts, this
risk is further heightened as other stakeholders along the catchment
may also seek access to water. More volatile catchment inflows may
also affect spot prices in a highly renewable electricity market, with dry
periods potentially contributing to higher prices and high inflow periods
potentially resulting in lower prices due to increased renewable generation.
This variability in prices and generation heightens our trading risk.
associated increased spillway repair, maintenance, and spillway upgrade costs.
Inputs included projected rainfall from Earth Sciences New Zealand’s Zone
1 data, historical price trends, and internal CAPEX and maintenance estimates.
Both approaches assumed nominal impacts using average prices, which
may have masked intra-year volatility. Limitations included reliance on
regional RCP* data (rather than SSPs*), internal assumptions, and a lack
of granularity, making outputs more suitable for sensitivity analysis and
indicative planning than precise forecasting.
ARATIATIA RAPIDS
operational flexibility to manage inflow variability on the Waikato
Hydro System, including during high inflow events.
• We are collaborating with other sector participants to explore options
to improve security of supply and grid flexibility during periods of
hydrological variability and dry-year risk.
72MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
OUR CLIMATE-RELATED RISKS CONT.
* This year the time horizon over which the risk becomes material has been updated and
is short to long-term, rather than medium to long-term as previously disclosed in FY25.
Growing intensity of atmospheric
conditions (including storm events)
may cause disruption to assets.
MANAGEMENT RESPONSE:
• We regularly assess physical risks to generating plant and assets as a
reasonable and prudent asset owner / operator and will mitigate risks
of damage as they arise.
• We have a dam safety programme, including annual and 5-yearly
external reviews, and continue to work to gain insight into the impacts
of climate change on flood risks.
• We maintain a portfolio of geographically dispersed and fuel diverse
generation assets which reduces impacts arising from localised storm
events that could cause asset damage.
MATERIAL CURRENT IMPACTS:
• Recent flooding events impacted two hydro stations, resulting in
roading repairs at Maraetai, and inventory write-offs at Ātiamuri.
The combined financial impact is below our materiality threshold.
TIME HORIZON: Current, short, medium, long-term.
TIME HORIZON OVER WHICH RISK BECOMES MATERIAL:
Short to long-term (1–30 years).*
LIKELIHOOD: This risk is assessed as being probable
(1–10% probability in any given year) to materialise.
RISK TYPE: Acute Physical.
ASSESSMENT METHODOLOGY:
We considered several impact pathways to assess the risk based on internal
data and historical climate events - transmission line failure from storm
or wind-related damage, transformer failure from flooding, compromised
units or stations from physical damage or disrupted access, and catastrophic
cascade dam failure.
For transmission line failure, we modelled the impact of the transmission
line connecting to our largest hydro station failing. Lost generation revenue
was calculated by multiplying average output by wholesale prices and a
1.5-month outage period.
For transformer failure due to flooding, we used a similar approach,
extending the modelled outage period to 3.5 months, reflecting a
ANTICIPATED IMPACT RANGE: Significant: $7.5m-75m
annualised over the short to long-term.
FINANCIAL METRICS: An aggregate of: decrease in energy
margin, increase in spillway repairs and maintenance
and increase in CAPEX reinvestment (frequency).
LONG-TERMMEDIUMCURRENTSHORT
IMPLICATIONS:
Increasing intensity of acute physical hazards, including high-intensity
rainfall, flooding, high wind events and fire conditions, may lead to
physical damage to generation and telco assets, disrupt access to these
assets, or affect surrounding infrastructure and network connections.
These hazards may result in repair costs, lost generation revenue, reduced
ability to operate or maintain affected sites, or reduced ability to export
generation from affected stations on the Waikato Hydro System.
conservative approach, as well as considering additional spillway capital
reinvestment required as a result of increased spilling during high flow events.
We also considered compromised units or stations, and catastrophic
cascade dam failure. However, these pathways were not reasonably expected
and deemed too rare for financial quantification but underscore the criticality
of maintenance and compliance with safety standards. These are not included
in our anticipated impact range.
Across all pathways, outputs are directionally indicative, relying heavily
on internal data due to limited external benchmarks.
NGĀ TAMARIKI GEOTHERMAL STATION
• We carry insurance cover that mitigates some of the financial
impacts of replacing damaged assets and for significant business
interruption events.
• Operational teams actively monitor weather forecasts and manage
hydro reservoirs and other generation assets proactively to mitigate
the impact of extreme weather events.
73MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
OUR CLIMATE-RELATED RISKS CONT.
Market and policy settings may
prioritise different aspects of the
energy trilemma as we transition
to a low-carbon future.
MANAGEMENT RESPONSE:
• We engage on policy settings that will support a successful transition for
New Zealand, and manage carbon inventory to ensure compliance with
emissions obligations while limiting exposure to carbon price movements.
• We support decarbonisation opportunities with existing and new
commercial and industrial (C&I) customers as well as providing renewable
energy options for new demand sources, such as data centres.
MATERIAL CURRENT IMPACTS:
• No material current impacts have been identified in FY26.
TIME HORIZON: Short, medium and long-term.
TIME HORIZON OVER WHICH RISK BECOMES MATERIAL:
Short to long-term (1–30 years).
LIKELIHOOD: This risk is assessed as being highly likely
(10-30% probability in any given year) to materialise.
RISK TYPE: Transition.
ASSESSMENT METHODOLOGY:
We considered the following impact pathways - constrained demand
from electrification, delays in consenting new renewable generation
projects, and government-imposed price caps.
For constrained demand from electrification, lost revenue was estimated
by modelling reduced electricity uptake across transport and industrial
sectors, using internal demand forecasts and national electrification
scenarios. The impact was expressed as a range, reflecting uncertainty
in demand outcomes and price responses.
For delays in consenting new renewable generation projects, we used
qualitative insights due to limitations in quantifying the financial impact.
Directionally, the potential cost was assessed by estimating foregone
revenue from delayed project commissioning using internal forecasts of
generation output and wholesale price assumptions. However, this result
ANTICIPATED IMPACT RANGE: Significant: $7.5m-75m
annualised over the short to long-term.
FINANCIAL METRICS: Net decrease in energy margin.
LONG-TERMMEDIUMCURRENTSHORT
IMPLICATIONS:
Without clear and considered policy settings, the rate of electrification
of industrial process heat and transport could fall behind projections. Other
policy reforms could adversely impact our ability to progress our generation
pipeline, such as Resource Management Act reforms favouring other
environmental protection over mitigating climate impacts. Specifically,
this could include declining demand growth, loss of investor confidence,
increased costs, delayed or declined renewable generation consents,
delayed renewable electricity generation capacity development,
security of supply issues (electricity and gas), changes to carbon unit
pricing and the emissions trading scheme, and market intervention
that negatively impacts asset valuations. We also recognise the
role that we and the broader market have to play in contributing to
balancing the energy trilemma as we navigate the transition.
is shared for information only, given the high uncertainty around timing,
project prioritisation, and regulatory outcomes. It is not included in our
anticipated impact range.
For government-imposed price caps, we used qualitative insights as
quantification was limited by the unpredictability of price cap levels and
duration. We note that price caps would likely reduce market revenues
and undermine investment signals. This result is shared for information
only, given the high uncertainty of information available and as it would
not be reasonably expected to occur. It is not included in our anticipated
impact range.
Across all impact pathways, financial outcomes are indicative only, subject
to evolving policy direction and market responses, and best used for stress
testing and strategic planning.
WAIKATO RIVER
• We maintain a broad range of renewable electricity generation development
options that can be brought to market in different demand scenarios.
• We actively engage with regulators and other external stakeholders to
increase the understanding that renewable electricity is a key enabler
of the transition to a low-carbon economy, and to promote regulatory
settings that support the development of renewable electricity.
74MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
OUR CLIMATE-RELATED RISKS CONT.
* This year the time horizon over which the risk becomes material has been updated
and is short to medium-term (1-10 years), rather than short to long-term as previously
disclosed in FY25.
Global decarbonisation
constraints (supply chain, labour
and infrastructure) may delay
renewable development.
MANAGEMENT RESPONSE:
• We manage our generation development pipeline to time procurement
and development at favourable periods and with sufficient lead time
to minimise unplanned delays.
MATERIAL CURRENT IMPACTS:
• No material current impacts have been identified in FY26.
TIME HORIZON: Short, medium and long-term.
TIME HORIZON OVER WHICH RISK BECOMES MATERIAL:
Short to medium-term (1–10 years).*
LIKELIHOOD: This risk is assessed as being probable
(1–10% probability in any given year) to materialise.
RISK TYPE: Transition.
ASSESSMENT METHODOLOGY:
We considered the following impact pathways - longer lead times to
commission projects and constraints in transmission and distribution
infrastructure by third parties.
For longer lead times to commission projects, we calculated the foregone
revenue and delayed capital expenditure from postponed generation due
to global supply shortages and long-lead times, constraints in skilled labour,
and geopolitical tensions. Generation volumes were based on internal
forecasts, while wholesale prices were derived from historical demand-
weighted averages published by the Electricity Authority. Capital overruns
were informed by industry reports and historical project performance.
For constraints in transmission and distribution infrastructure by third
parties, our methodology similarly estimated the revenue loss from
delayed grid connections, factoring in timing assumptions from regulatory
approvals and infrastructure investment commitments (e.g. Transpower’s
$392.9 million grid investment).
ANTICIPATED IMPACT RANGE: Significant: $7.5m-75m
per annum.
FINANCIAL METRICS: An aggregate of: net decrease in
energy margin, potential repairs and maintenance for existing
assets and increased capital expenditure due to overruns.
LONG-TERMMEDIUMCURRENTSHORT
IMPLICATIONS:
Constrained global supply of renewable generation technology (i.e. wind
turbines, substation equipment) and skilled labour shortage could cause
construction delays and capital cost overruns. This may be exacerbated
by global data centre growth, geopolitical tensions, and the recent uptick
in renewable generation investment globally making it challenging for
manufacturers to meet that demand. In this context, the New Zealand
market is unattractive compared to larger countries due to its relatively
small market and remoteness. On a local level, transmission and distribution
constraints may impact our ability to connect new renewable generation.
However, this result is shared for information only given insufficient
information available, and is not included in our anticipated impact range.
Our pathways considered the financial impact of inflationary pressures
on capital expenditure. Limitations included reliance on internal data,
variability in delay duration, and lack of granular external data on future
infrastructure readiness, making outputs indicative for strategic planning
rather than precise forecasting.
MAHINERANGI WIND FARM
• We focus on key supplier relationship planning and management.
• We proactively engage with potential new suppliers to the region
to broaden the supply chain.
75MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
OUR CLIMATE-RELATED OPPORTUNITIES
The low-carbon transition may
lift electricity demand.
MANAGEMENT RESPONSE:
• We look to secure resource consents for generation development
projects ahead of expected increased demand.
• We ensure there is a broad pipeline of development opportunities and
maintain strong relationships with generation equipment suppliers.
MATERIAL CURRENT IMPACTS:
• There have been no material current impacts in FY26.
TIME HORIZON: Short, medium and long-term.
TIME HORIZON OVER WHICH OPPORTUNITY BECOMES MATERIAL:
Short to long-term (1–30 years).*
LIKELIHOOD: This opportunity is assessed as being almost
certain (>30% probability in any given year) to materialise.
OPPORTUNITY TYPE: Transition.
ASSESSMENT METHODOLOGY:
We considered four key impact pathways: industrial conversion, demand
stimulation (including from data centres), uptake of biogas and biomass,
and low-emissions solutions.
For industrial conversion, we used Transpower growth forecasts alongside
expected average wholesale electricity prices to estimate incremental revenue.
For demand stimulation, we considered the additional demand from
electrification and the increase in data centres in a highly electrified scenario.
For biomass, our modelling focused on industrial uptake Energy Efficiency
and Conservation Authority (EECA) projection and its potential to either
supplement or compete with electricity demand, depending on policy
and technology developments.
For biogas, our modelling focused on transitioning mass-market gas
customers to biogas.
ANTICIPATED IMPACT RANGE: Major: $75m-750m per annum.FINANCIAL METRICS: Increase in electricity margin.
LONG-TERMMEDIUMCURRENTSHORT
IMPLICATIONS:
Increased demand for renewable electricity, due to decarbonisation of
transport and industrial conversion in New Zealand and globally, may
provide greater opportunities to build renewable generation capacity
and increase sales volumes. Global growth in AI and data centres is also
contributing to increased electricity demand, reinforcing the need for
additional generation capacity.
For low-emissions solutions, we considered the increased uptake of
renewable energy certificates (RECs), and the evolution of carbon markets.
Across these pathways, we used internal price path assumptions and
strategic insights from internal and external analysis. Limitations include
the forward-looking nature of assumptions, uncertainties in demand timing,
pace of technology adoption, and future pricing dynamics, making outputs
most suitable for directional planning and investment prioritisation.
* This year the time horizon over which the opportunity becomes material has been updated
and is short to long-term (1–30 years), rather than medium to long-term as previously
disclosed in FY25.
WAIPIPI WIND FARM
• We continue to explore additional sources of demand,
actively partnering with existing and new stakeholders
to support renewable growth ambition.
76MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
OUR CLIMATE-RELATED OPPORTUNITIES CONT.
Capital markets may support
investing in low-carbon operations.
MANAGEMENT RESPONSE:
• We have issued Green Bonds and continue to communicate
our low-carbon generation profile to the investor community,
including research analysts and organisations that assess
sustainability performance.
• We continue to engage with investors, research analysts, and
sustainability rating agencies to ensure our low-carbon profile
remains relevant in evolving capital markets.
MATERIAL CURRENT IMPACTS:
• No material current impacts have been identified in FY26.
TIME HORIZON: Short, medium and long-term.
TIME HORIZON OVER WHICH OPPORTUNITY BECOMES MATERIAL:
Long-term (10–30 years).
LIKELIHOOD: This opportunity is assessed as being likely
(1-10% probability in any given year) to materialise.
OPPORTUNITY TYPE: Transition.
ASSESSMENT METHODOLOGY:
We considered two impact pathways as to how our renewable energy profile
could positively influence investor sentiment, namely, lower capital costs,
and a favourable valuation premium.
For lower capital costs, we modelled a reduction in basis points for bond
issuances and loans, reflecting investor preference for low-emissions-aligned
investments. This assumption was based on internal assessments of market
trends and stakeholder engagement. Our modelling calculated the savings
from these basis point reductions over our expected debt portfolio.
For a favourable valuation premium from stronger climate positioning, we
considered peer valuation indicators, renewable exposure, and broader
investor sentiment toward low-carbon infrastructure. Enterprise value was
calculated using market capitalisation and net debt, and EBITDAF was
ANTICIPATED IMPACT RANGE: Major: $75m-750m -
prolonged impact.
FINANCIAL METRICS: An aggregate of: decrease in cost
of capital and favourable valuation premium.
LONG-TERMMEDIUMCURRENTSHORT
IMPLICATIONS:
Our profile as a renewable electricity generator could lead to potential
reduced capital costs and favourable valuation premium as capital
markets reflect societal desire to invest in the transition to a low-
carbon economy. While green financing can provide somewhat
modest funding advantages, the larger opportunity may arise
through improved equity valuation as investors favour companies
with stronger renewable portfolios and decarbonisation strategies.
sourced from public disclosures and analyst consensus. The resulting
multiple gap (e.g., 1.5x–2.0x) was applied to our EBITDAF to estimate the
potential uplift in enterprise value. A conservative realisation factor (e.g.,
10–30%) has been applied to reflect execution risk and market variability
and is anticipated to materialise over a long-term horizon. However, our
assessment was limited by the lack of consistent external benchmarks,
structural business differences, and broader market factors unrelated
to Environmental, Social, and Governance (ESG) strategy and relies heavily
on internal data and judgement.
NGĀ AWA PŪRUA GEOTHERMAL STATION
• We actively communicate our renewable generation profile
and investment proposition to support investor understanding
of our position in the low-carbon transition.
• We monitor developments in sustainable finance to identify
new funding mechanisms beyond Green Bonds.
77MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
OUR CLIMATE-RELATED OPPORTUNITIES CONT.
The low-carbon transition may drive
demand for smart energy solutions
and new products and services.
MANAGEMENT RESPONSE:
• We are developing and implementing an electrification strategy
for our C&I customers.
• We are investing in capability to manage energy and demand-
side flexibility.
• We are actively seeking innovation opportunities to develop
new energy solutions for customers.
MATERIAL CURRENT IMPACTS:
• No material current impacts have been identified in FY26. Demand
growth remains an important long-term opportunity, but current-
year impacts have not exceeded our materiality threshold.
TIME HORIZON: Medium and long-term.
TIME HORIZON OVER WHICH OPPORTUNITY BECOMES MATERIAL:
Long-term (10–30 years).
LIKELIHOOD: This opportunity is assessed as being almost
certain (>30% probability in any given year) to materialise.
OPPORTUNITY TYPE: Transition.
ASSESSMENT METHODOLOGY:
We considered two impact pathways: energy management services from
electric vehicles (EVs), and distributed energy resources (DERs).
For EVs, we projected the growth rate for EVs based on government
adoption targets and historical uptake rates. Our analysis considered
load shifting benefits, vehicle-to-grid solutions, and accelerated EV
customer growth.
For DERs - such as energy management solutions, and flexible demand -
our analysis considered the load shifting benefits of these.
ANTICIPATED IMPACT RANGE: Significant: $7.5m-75m
per annum.
FINANCIAL METRICS: Increase in energy margin.
LONG-TERMMEDIUMCURRENTSHORT
IMPLICATIONS:
Electrification and demand flexibility may create demand for tailored
energy solutions that help customers optimise electricity use and support
a more efficient system. Solutions for our industrial customers
can create new business models, increase electricity sales, and
support further renewable generation development, strengthening
collaboration between energy providers and industrial users as
electrification progresses. Enabling demand-side flexibility for
customers can reduce cost of sales, enhance customer value, and
support a more efficient, renewables-based electricity system.
Across the pathways, we have leveraged on internal estimates, price path
assumptions, and external and internal analysis. Key limitations include
the forward-looking nature of assumptions, uncertainties in policy incentives
and technology uptake, customer adoption rates, DER integration costs, and
evolving regulatory frameworks, making this assessment most suitable for
scenario testing and strategic planning.
• We engage on regulatory and market developments that support
demand-side flexibility, including opportunities for C&I customers.
78MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
We use emissions reduction
targets to guide action,
support climate-related
decision-making, and track
our progress over time.
In FY23 we first committed to setting near and
long-term emissions reduction targets using tools
provided by the Science Based Targets initiative
(SBTi). In FY26, we have updated our targets to
incorporate updated methodology and the lessons
learnt from progressing our initial targets. We now
have a more mature technical evidence base and
a clearer understanding of delivery challenges which
we have used to inform our updated targets.
Our targets continue to be aligned to our strategy
and informed by SBTi tools, greenhouse gas
accounting principles, and target-setting principles.
We have used SBTi tools, and methodologies
that are designed to support 1.5°C-aligned target
setting, alongside Mercury’s modelling, operational
assumptions, and insight from our programme
of work to date. It is our view that by achieving
our SBTi-aligned long-term climate targets, we are
playing our part in contributing to the global effort
to limit warming to 1.5°C.
We measure progress against an FY22 base year
using emissions data from our Greenhouse Gas
Emissions Inventory, which is prepared in accordance
with The Greenhouse Gas Protocol: A Corporate
Accounting and Reporting Standard (revised edition).
OUR CLIMATE TARGETS
WHAKAMARU HYDRO STATION
Using a fixed base year allows us to compare
emissions consistently over time and assess whether
our actions are reducing emissions across our
operations and value chain. FY22 remains the
base year under our updated targets.
Our Climate Action Plan outlines the actions we
are taking to support a low emissions future and to
reduce GHG emissions in the areas where we have
the greatest ability to influence outcomes. Our
emissions reduction targets focus on reducing gross
emissions, and we do not intend to use offsets to
achieve our near-term and long-term targets.
Our targets cover emissions across our value chain.
This includes:
s Scope 1: Direct GHG emissions from sources
that are operationally controlled by Mercury.
s Scope 2: Indirect emissions from the generation
of electricity consumed at Mercury’s facilities.
s Scope 3: Indirect emissions that occur from
gas we sell to customers.
79MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
Further detail on the actions supporting our targets is provided in our Climate Action Plan.
In the last three years, our progress against these targets was:
Our Emission Reduction Targets
SCOPE 3
SCOPE 3
SCOPE 2
SCOPE 2
SCOPE 1
SCOPE 1
Reduction in electricity
generation emissions
intensity per MWh, from
an FY22 base year
Reduction in electricity
generation emissions
intensity per MWh, from
an FY22 base year
Absolute reduction in
purchased electricity
emissions, from an FY22
base year
Absolute reduction in
purchased electricity
emissions, from an FY22
base year
Absolute reduction in
emissions from gas sold
to customers from an
FY22 base year
Absolute reduction in
emissions from gas sold
to customers from an
FY22 base year
• 1.7 tCO
2
e/GWh decrease
from base year
• 6.45% decrease in emissions
intensity from base year
From: 70% by 2030
To: 41% by 2030
• 11 tCO
2
e decrease from
base year
• 0.52% absolute reduction
from base year
Unchanged: 42% by 2030
• 3,168 tCO
2
e decrease
from base year
• 2.29% absolute reduction
from base year
From: 42% by 2030
To: 34% by 2030
• 2.3 tCO
2
e/GWh decrease
from base year
• 8.90% decrease in emissions
intensity from base year
• 6.6 tCO
2
e/GWh decrease
from base year
• 25.67% decrease in
emissions intensity
from base year
Unchanged: 70% by 2040
• 230 tCO
2
e increase
from base year
• 10.83% absolute increase
from base year
• 567 tCO
2
e decrease
from base year
• 26.71% absolute reduction
from base year
From: 90% by 2040
To: 90% by 2050
• 14,418 tCO
2
e decrease
from base year
• 10.43% absolute reduction
from base year
• 18,476 tCO
2
e decrease
from base year
• 13.36% absolute reduction
from base year
From: 90% by 2040
To: 90% by 2050
FY24
Near-term
reduction
FY25
FY26
Long-term
reduction
WHY OUR TARGETS HAVE CHANGED
Our updated targets maintain our long-term
decarbonisation direction, while reflecting what
can practically be delivered, particularly where
some reductions depend on technologies, market
conditions, and wider system changes that are
still developing.
Since setting the original targets, we have gained
practical insight from the early phases of non-
condensable gas (NCG) reinjection work, feasibility
studies, and development planning, giving us a
clearer view of what can credibly be delivered by
2030. We are engaging directly with SBTi as it
updates its power sector guidance, including how
this may apply to geothermal generation emissions
and support a potential future validation pathway.
The changes we have made to our targets, effective
as at the date of this Climate Statement are:
s Scope 1 - Our long-term Scope 1 target remains
unchanged at a 70% reduction by 2040. The
near-term generation emissions intensity target
has been updated to a 41% reduction by 2030
from an FY22 base year. This reflects an FY26
technical assessment of the geothermal NCG
reinjection pathway across our geothermal
generation stations. As the reinjection programme
has progressed, practical learning from reinjection
performance, feasibility studies, and future
development planning has given us a clearer view
of what can credibly be delivered by 2030.
s Scope 2 - For Scope 2, our near-term target
remains unchanged at a 42% reduction by 2030,
while our long-term target date has moved from
2040 to 2050. This better reflects the longer-term
pathway for Scope 2 emissions and recognises
that the impact of proposed changes to the
GHG Protocol’s Scope 2 guidance, including the
treatment of renewable energy certificates, remains
unclear. The revised standard is expected to be
published no earlier than late 2027 and, depending
on the final requirements, could affect the delivery
pathway for our Scope 2 target.
s Scope 3 - The near-term gas sales target
has moved from a 42% absolute reduction
to a 34% absolute reduction by 2030 from
an FY22 base year, reflecting SBTi’s Corporate
Net-Zero Standard V1.3.1 published April 2026
for calculating absolute reduction targets.
The long-term target remains a 90% absolute
reduction, with the target date moving from
2040 to 2050 to better reflect the long-term
pathway for our gas sales emissions. This has
been influenced by increased uncertainty in
New Zealand’s gas sector since we last set our
targets, as indigenous gas supply declines, major
fields mature, and customers transition away
from gas at different rates.
We remain supportive of science-based target-
setting approaches and will continue to monitor
SBTi guidance as it evolves, particularly for
geothermal generation in New Zealand’s highly
renewable electricity system. We are not seeking
SBTi validation of the updated targets at this time.
OUR CLIMATE TARGETS CONT.
Basis: Mercury
Modelled Pathway
Basis: SBTi Corporate
Near-Term Tool
Basis: SBTi Corporate
Near-Term Tool
Basis: SBTi Corporate Net
Zero Tool
Basis: SBTi Corporate Net
Zero Tool
Basis: SBTi Corporate Net
Zero Tool
80MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
SCENARIO DEVELOPMENT PROCESS
We have a single, integrated set of scenarios
to explore a range of plausible futures in order
to assess the resilience of our business model and
strategy to climate-related risks and opportunities.
In line with NZ CS, we consider four scenarios:
one limiting global temperature increase to 1.5°C,
one exceeding 3°C, and two that assess alternative
pathways for New Zealand’s transition to a low-
carbon future. These are reviewed annually and
monitored to reflect new developments and signals.
These scenarios have been selected to reflect a
range of plausible futures across macro drivers, such
as geopolitical tensions, technology advancements,
and inequity within New Zealand. We have chosen
to have four scenarios so that we do not default to
a central or ‘most likely’ pathway when considering
what could occur in the future.
The climate aspects of these scenarios were initially
developed with support from third-party consultants
and continue to be refined by our Climate Working
Group each year. This group is led by the Strategy
and Corporate Affairs Team and involves a
cross-functional team, including representatives
from Finance, Wholesale Markets, Transformation,
People, Customer, Generation, and Generation
Development. Including the strategy function
ensures the fundamental objective of climate-
related scenario analysis to bolster the resilience
of our strategy is achieved, and includes team
members who engage externally with suppliers,
customers, iwi partners, councils, and industry
groups. Insights from this process can inform and
influence strategic investments and operational
decisions. We have previously collaborated with
external stakeholders, including through the Energy
and Telecommunications Sector climate-related
scenarios development, to test and validate our
scenarios, risks and opportunities, and identify
any gaps in our analysis.
Our scenario analysis continues to be guided by
the focal question: “What climate-related risks and
opportunities are affecting Mercury now and could
plausibly affect Mercury over the short, medium
and long terms?”
We applied the STTEEP (Social, Technological, Te Ao
Māori, Economic, Environmental, Political) framework
to structure thinking, supported by external datasets
and models to enrich our scenarios (captured in
the Datasets and Models Used section). We did not
undertake our own modelling in the construction
of our scenarios.
The boundary for our scenario analysis includes all
of our New Zealand operations, subsidiaries, joint
ventures, and investments. Our investment in Energy
Source LLC and ES Minerals LLC was not considered
to meet our materiality threshold. We assess
upstream and downstream value chain impacts,
including key suppliers, partners, and customers.
Each year, we undertake a comprehensive review of
the climate-related aspects of our scenarios as part
of our annual scenario cycle.
This process included multiple workshops with
internal subject matter experts across business units
to review and update the key drivers of our scenarios
and make amendments to our scenarios and assess
and revise CRROs, including identifying potential
new ones. We also sense-check time horizons, initial
materiality assessments, and management actions
with CRRO owners, reflect on real-world events and
whether any anticipated impacts have begun to
materialise (current impacts), and conduct financial
quantification of material CRROs and impacts with the
Finance team to inform final materiality assessment.
WAIPAPA HYDRO STATION
OUR SCENARIOS
81MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 202681
OUR SCENARIOS
TEAL SCENARIO
1
Global temperature increases are limited to
1.5 degrees by 2100 (after an overshoot to 1.6
degrees)
PURPLE SCENARIO
2
Global temperature increases are limited
to 2.5 degrees by 2100
AMBER SCENARIO
3
Global temperature increases are limited
to 3 degrees by 2100
MAROON SCENARIO
4
Global temperature increases by 3+ degrees
by 2100
Scenario narrativeA globally coordinated push for climate action
limits warming to below 1.5°C, after an overshoot
to 1.6°C. Historic inaction and increasing climate
impacts force rapid emissions cuts, driven
by strong-handed policy, creating both equity
tensions and innovation. A global carbon price
accelerates renewable investment and early
demand-driven equipment cost spikes ease
as supply expands. While the pathway is not
smooth, New Zealand builds a more sustainable
and socially supported energy system through
electrification and the adoption of smart
demand technologies.
A fractured world and rising inequality shape
a polarised transition. New Zealand balances
East–West tensions but ultimately aligns with
Western powers, impacting trade. Technology
advances benefit wealthier nations and
households, while energy volatility and grid
instability deepen inequity. Deindustrialisation
accelerates as fossil fuels exit and Methanex
closes by 2030. AI-driven energy optimisation
cuts costs for some, but others face price shocks,
prompting government intervention. Job losses
from automation fuel distrust in AI and social
unrest. Climate impacts are felt, especially in
poorer areas lacking access to technologies.
The energy system transforms, but its benefits
are uneven and shaped by division.
Global climate cooperation continues, but
technological progress slows, driving a strained
path to a low-carbon future. A carbon market
lifts prices and drives action, but surging demand
triggers supply shortages and cost blowouts,
slowing New Zealand’s renewables rollout. Capital
retreats and opposition grows, as government
underwrites offshore wind, supports system
flexibility mechanisms and restructures the
market. Intensifying storms strain infrastructure.
High living costs push workers offshore, while
climate refugees arrive. Rising inequity shifts
decision-making power, with parties that have
enduring relationships and co-governance
arrangements with iwi better placed to progress,
while others face greater consenting and social
licence challenges. The transition grinds
forward, shaped by intervention and social
and economic divides.
Global cooperation unravels as war and
protectionism stall climate action. Emissions
climb, pushing warming beyond 3°C. New
Zealand is hit hard — trade shrinks, climate
shocks batter infrastructure, and food and energy
insecurity rises. With multilateralism gone,
governments act alone. New Zealand centralises
assets to manage volatility, but political
fragmentation blocks long-term planning.
Affordability dominates policy, not emissions.
Workforce tensions and unresolved iwi and hapū
rights and interests in water and geothermal
resources add pressure. Vulnerable customers
become the majority. The energy system adapts
reactively — not through innovation or strategy
— as worsening climate impacts outpace
fragmented, short-term governance.
Key data points – global impacts
Temperature increase (2081 – 2100,
relative to 1850 – 1900)
1
1.4°C (after an
overshoot to 1.6 °C)
2.2°C2.7°C3.6°C
Technology change
2
FastFastSlowSlow
Negative emissions technologiesMedium–high useMedium useLow–medium useLow use
Key data points –
New Zealand impacts
Average number of hot days (above
25°C) (for the period 2031 – 50,
average across regions)
3
25 hot days27 hot days27 hot days30 hot days
Renewable energy percentage
of total consumption in 2050
4
89%87%74%46%
Reference scenarios/
data sources
SSP1-1.9
RCP2.6
CCC Tailwinds
NGFS Net Zero 2050
SSP4-3.4
RCP4.5
CCC Further Technology Change
NGFS Delayed Transition
SSP2-4.5
RCP4.5
CCC Headwinds
NGFS Nationally Determined
Contributions
SSP3-7.0
RCP8.5
CCC Current Policy Representation
NGFS Current Policies
SCENARIO ANALYSIS We recognise the importance of scenario analysis in assessing CRROs and testing the resilience of our strategy across different time horizons. Our scenarios can be found below.
To support transparency and informed decision-making, we conduct an annual in-depth review of climate-related aspects.
1
Shared Socioeconomic Pathways (SSP) information sourced from IPCC, 2021: Summary for Policymakers. In: Climate Change 2021:
The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on
Climate Change [Masson-Delmotte, V. et al (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA,
p. 14. (ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_SPM.pdf) and SSP Public Database, Version 2.0
(ssp.legacy.ece.iiasa.ac.at/legacy-sspdb/dsd?Action=htmlpage&page=welcome)
2
Network for Greening the Financial System (NGFS) scenario information from the Scenarios Portal (ngfs.net/ngfs-scenarios-portal)
3
RCP (Representative Concentration Pathways) information applied to New Zealand by Ministry for the Environment 2018. Climate Change
Projections for New Zealand: Atmosphere Projections Based on Simulations from the IPCC Fifth Assessment, 2nd Edition. Wellington:
Ministry for the Environment (environment.govt.nz/assets/Publications/Files/Climate-change-projections-2nd-edition-final.pdf)
4
CCC (Climate Change Commission) as in ‘Chapter 12:Long Term Scenarios to meet the 2050 target’
(climatecommission.govt.nz/public/Evidence-21/Evidence-CH-12-Long-term-scenarios-to-meet-the-2050-target.pdf)
82MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
OUR SCENARIOS
TEAL SCENARIO
1
PURPLE SCENARIO
2
AMBER SCENARIO
3
MAROON SCENARIO
4
Climate impactsExtreme weather is more frequent, causing
damage and loss of life. Adaptation technologies
have helped, but disruption persists. Pre-emptive
relocation progresses slowly due to political
sensitivity. Climate-resilient housing drives
densification as communities move from high-
risk zones, while insurance retreat and affordability
concerns rise in vulnerable areas. Communities
influence retreat plans, but the pace causes
tension. Hydrological patterns become more
volatile, with short periods of intense inflows
leading to increased operational spill despite
stable long-term averages. Occasional extreme
wind events require more frequent curtailment of
wind turbines in exposed areas.
Climate impacts are widespread, particularly in
poorer areas where adaptation technologies are
not in use. Insurers increasingly withdraw from
high-risk areas, whilst investment concentrates
in well-planned, resilient areas, deepening social
and economic divides.
Water scarcity grows as the hydrological cycle
changes, leading to contestability for uses. More
frequent extreme wind events place greater
stress on wind assets and increase the need for
curtailment. Slips, flooding, and fire events disrupt
access to hydro and geothermal sites more often,
complicating maintenance and response activities.
Climate events are expensive and disruptive
as technological solutions lag and government
support remains limited. Water scarcity
intensifies creating contestability for uses.
Investors retreat from at-risk areas, lowering
property values and deteriorating housing
stock. Poor land-use regulation results in energy
shortages in rural areas, where renewable
generation and network support is limited. Insurer
withdrawal and expensive managed retreat
place growing financial strain on communities.
Hydrological extremes become more frequent,
with intense inflows causing spill and prolonged
droughts reducing generation capacity, often
coinciding with lower wind output. Storm-driven
wind turbine damage and outages increase,
adding operational and maintenance pressure.
Disruptive and expensive events that damage
infrastructure are frequent. Retreat from coastal
and high-risk areas has begun, with wealthier
households relocating to climate-resilient areas,
pushing up living costs due to limited government
coordination. Insurance disappears from exposed
zones, forcing managed retreat for the wealthy,
while others are left behind. Hydrological changes
cause water scarcity, increasing competition
for non-hydro uses and reducing year-round
hydro generation. Low inflow periods more often
coincide with low wind output, escalating reliability
challenges. Storms cause widespread damage
to wind turbines, transmission lines and access
roads, delaying maintenance and increasing
system fragility.
Energy pathways: Grid demandHigh demand is driven from industry, transport
decarbonisation and AI adoption including
increase in data centres. Peak shaving and
demand response (smart DER) are used
efficiently to help manage the grid effectively.
Higher summer temperatures contribute to
increased cooling demand, reinforcing the
importance of flexible demand management
during periods of inflow variability.
Grid electricity use is down (despite AI uptake
driving additional grid demand) due to an
increase in DER and loss of industry. Climate-
related outages lead some households to adopt
solar-and-battery systems primarily for resilience,
widening the difference in equity between
higher- and lower-income customers. Smart grid
management optimises supply and demand,
reducing reliance on centralised power generation.
High demand is driven by transport
decarbonisation as more transport activity shifts
from fossil fuels to electricity. Demand-side
flexibility remains minimal and is only used in
emergencies (much like today).
Electricity demand has been stagnant-to-
declining due to a limited industry decarbonisation,
slow EV uptake and low adoption of AI. Gas
continues to be used quite extensively, reducing
the extent to which demand shifts on to the
electricity system.
Energy pathways: Grid supplyFossil fuels are phased out, but the energy
transition in New Zealand is initially tempered
as high global demand drives up the cost of
renewable energy equipment. As equipment
costs rise, large-scale storage projects become
more economically viable and attract renewed
interest. The lights stay on, but wholesale prices
remain volatile until storage solution technology
catches up to requirements and then prices level
off to become internationally competitive. Hydro
assets are required to ramp more frequently to
support growing wind generation, increasing
wear on ageing assets. Lake Taupō’s consented
operating limits constrain flexibility compared
to other storage schemes.
Fossil fuels and thermal generation have been
retired. The system is under-resourced and
unreliable, with security of supply remaining a
concern in dry years. More volatile hydro inflows
make generation less predictable, increasing
pressure on storage management during dry
years. Retail prices are moderate to low due
to price regulation, however wholesale price
volatility has increased and adds to the cost to
supply customers. This keeps New Zealand prices
internationally competitive, but has a negative
impact on competition.
A low-carbon energy system has been achieved
with grid scale wind and other renewable solutions
enabling this. Blended fossil and bio-gas is used
to help manage extreme peaks and security,
though security of supply remains a concern
in dry years. Wholesale volatility increases with
intermittent renewables resulting in wholesale
pricing increasing in excess of global trends
and New Zealand becoming increasingly less
competitive. Ageing hydro and wind assets
face greater operational stress from more
frequent ramping and storm-related outages,
increasing maintenance requirements. Regional
environmental limits, including lake-level
constraints and localised erosion or foundation
risks, restrict responsiveness during periods
of volatility.
Fossil fuels remain with limited growth in
renewables. Security of supply is undermined
by global conflict and extreme weather, which
disrupt supply chains, delay new generation and
maintenance, and increase the risk of outages.
Wholesale volatility remains. Government funded
large-scale storage is used to help meet peak
demand and cover dry years once they have been
built. Prices are low and managed through long-
term central buyer contracts. Average wholesale
prices rise with uncertainty around delivery of
new supply and increasing thermal fuel cost. This
increase and uncertainty around the future state
of the market causes industry to close and move
offshore. Centralised storage and generation
assets become increasingly vulnerable to
climate-related damage, creating a system that is
more centralised but also more fragile.
Resource and
technology constraints
Global competition and supply chain pressures
increase costs. New Zealand faces skills
shortages, infrastructure bottlenecks, and
cost-of-living pressures, though long-term
investment continues. In response, New Zealand
begins to innovate, developing local capabilities
and smarter deployment strategies to mitigate
supply chain constraints and build greater
resilience into the transition.
There are significant supply chain disruptions,
limiting access to critical materials for clean
energy technologies. Access to natural resources
is often contested and involves a drawn-out
process. Adaptation through technology is
prioritised over emissions mitigation, progressing
steadily but nearing its limits. Periods of global
oversupply occasionally emerge as some
countries slow climate investment, creating short
windows where renewable equipment becomes
more accessible to those with capital and
established social licence.
Physical resources are difficult to access due
to global demand and remain costly, although
some supply is available from global sources.
A stronger focus on iwi rights and interests makes
partnership and co-governance arrangements
increasingly important for access to water and
steam. Limited technology reduces the ability
to adapt to climate events effectively. Climate
pressures intensify the focus on locally tailored
resilience outcomes.
Access to knowledge and technology is difficult
and expensive. Physical resources are challenging
to access due to protectionism, war-time supply
chain constraints and global demand, and
take longer to arrive at higher prices. Limited
technology reduces the ability to adapt to climate
events at pace. Repairs to hydro, wind and
transmission infrastructure are frequently delayed
by repeated extreme weather and constrained
global supply chains, prolonging outages and
reducing system resilience.
83MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
OUR SCENARIOS
TEAL SCENARIO
1
PURPLE SCENARIO
2
AMBER SCENARIO
3
MAROON SCENARIO
4
Consumer needsConsumers value climate solutions, but cost-
of-living pressures dominate decision-making.
Demand exists, but affordability concerns lead
to slow widespread adoption of green products.
Significant wealth divide in society between rich
and poor, with vastly different needs. Demand
for green products is divided. A segment of
consumers invests in solar, batteries and other
backup technologies to improve household
resilience, while others remain exposed to
outages and price volatility.
As the wealth gap increases, demand for green
products is divided.
Financial hardship has created a large price
sensitive segment focused on the basics. There
is a culture of conserving, repairing, and reusing
limited resources. Demand for green products is
low, and only adopted by those that can afford it.
Some higher-income households and businesses
invest in off-grid systems to secure reliability, further
fragmenting access to dependable energy services.
International climate
commitments
Off the back of delayed implementation
countries are coordinating and increasing
their ambition to achieve net zero targets.
Some global agreements and commitments
are achieved, but not all. Coordination across
nations faces challenges. New Zealand
emissions budgets are met but involve
additional costs or delays.
Countries are working towards agreements
and commitments, but progress is slower than
expected. New Zealand emissions budgets are
met at considerable expense, with significant
trade-offs required.
Countries work individually without a globally
coordinated response. Progress is slow or non-
existent, and commitments may have been
abandoned. New Zealand emissions budgets
are not met or have been revised to the point
of losing significance.
Countries work individually with minimal progress
on a coordinated response. Commitments are
often fragmented or abandoned. New Zealand
emissions budgets lose significance.
Government and policy
settings for renewable energy
Governments introduce strong handed policies
to achieve a 1.5-degree future, creating
uncertainty for industry and communities.
In New Zealand, rapid regulatory shifts drive
emissions reductions, including enabling Fast-
track renewable energy development. Social
licence is impacted as a result.
International and New Zealand regulatory settings
for renewable energy somewhat constrain
development and further drive uptake of DER.
Wealthier nations invest in energy research and
renewable technology. New Zealand‘s government
introduced price caps in the energy sector to help
the growing vulnerable segment. Government
policy drives technology uptake to increase
electrification in select areas, but costs are
impacting customers at an uncontrolled rate.
International and New Zealand regulatory
settings for renewable energy delay
development. Government-backed mechanisms
and underwritten offshore wind are operated to
achieve government objectives, and government
has forcibly split gentailers. Supply chains
are impacted by uncoordinated international
incentives to invest in clean energy. Emissions
Trading Scheme (ETS) policy settings fail to
reward decarbonisation, and government
policy is slow to enable a cost-effective and
coordinated transition.
International regulatory settings for renewable
energy obstruct development. There is a lack
of coordination and cooperation internationally.
Geopolitical tensions increase driving
protectionism, impacting supply chains and the
development
of renewable technology. Government centralises
ownership of key infrastructure, including energy
and telecommunications. Reactive, poorly executed
regulation generates unintended consequences.
Limited alternatives for gas within the sector
exacerbate challenges, prompting government
intervention to ensure New Zealand’s security
of supply.
Energy sector social licence
Relationships between iwi and hapū, communities,
the energy sector, and government are tested
by the pace and scale of change. While
indigenous rights and input remain a focus,
engagement processes are sometimes rushed,
leading to contested outcomes and challenges
to social licence. Consenting becomes more
politicised as pressure to meet climate targets
grows, and trust is challenging to maintain.
Social licence varies across projects and regions,
requiring increased investment in relationship
building and transparency. Expectations from
iwi and hapū continue to strengthen in hydro
and geothermal regions, particularly in relation
to kaitiakitanga, water stewardship, and the
distribution of benefits.
Input from iwi and hapū, local communities, and
other stakeholders are considered, though not
fully integrated into decision-making processes.
This partial engagement creates challenges
in navigating consenting processes, requiring
trade-offs. Social licence is partially established,
but lingering concerns limit the pace of progress
in the energy transition. Disparities between
asset performance and the socioeconomic
vulnerability of local communities heighten
scrutiny and increase expectations of iwi
and hapū and community partners.
Stakeholder engagement is fragmented and
inconsistent, with limited coordination across
diverse groups, including iwi and hapū, local
communities, and regulatory bodies. Frequent
reforms to consenting processes create
uncertainty. As inequity rises, the role of iwi and
hapū in resource decision-making strengthens,
and parties with established co-governance
arrangements are better placed to progress.
Others face greater social licence challenges.
As a result, electrification and renewable
development is slow and costly, with ongoing
effort required.
Engagement with stakeholders, including local
communities, iwi and hapū, is minimal and
often contentious. A lack of recognition for
diverse rights and perspectives contributes to
adversarial relationships. Consenting processes
are disrupted, highly contested and prone to
repeal. The absence of social licence results
in widespread opposition, delaying renewable
generation development. Unresolved iwi
and hapū rights and interests in water and
geothermal resources contribute to prolonged
disputes, with limited progress toward stable
co-governance arrangements.
Carbon sequestration
from afforestation
Carbon sequestration from afforestation is
used extensively to offset emissions during the
transition, with a heavy reliance on fast-growing
exotic species. While this provides a quick fix for
meeting short-term targets, it raises growing
concerns about negative impacts on biodiversity,
water systems, and rural communities.
Carbon sequestration from afforestation has
been utilised for emissions reduction, along with
technological and nature-based solutions as they
become available.
Carbon sequestration from afforestation has been
widely deployed, being gradually superseded by
technological and nature-based solutions.
Carbon sequestration from afforestation is
utilised at a local level, without effective global
coordination and certification.
Nature-based solutions
Nature-based solutions have been developed
and form part of a broad portfolio of emissions
reduction solutions.
Nature-based solutions have been developed
and form part of a broad portfolio of emissions
reduction solutions.
Nature-based solutions have been developed
and form part of a broad portfolio of emissions
reduction solutions.
Nature-based solutions will be neither reliable
nor scalable for meaningful climate mitigation.
They become fragile, reactive tools with
localised benefits, not dependable levers
for global decarbonisation.
Negative emissions technology
Effective negative emissions technology has
been developed and widely deployed.
Effective negative emissions technology has been
developed and deployed.
The development of negative emissions
technology is slower than expected,
delaying development.
Negative emissions technology has not been
developed.
84MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
DATA SETS AND MODELS USED
We considered several external data sources and
models to inform our understanding of CRROs.
These data sets supported both qualitative insights
and quantitative assessments, including financial
quantification. For physical risks, we considered
publicly available New Zealand climate projection
data, including precipitation, wet day, and
temperature projections, alongside internal asset,
generation and financial data. We recognise that
physical risk assessment remains an evolving area
and that some available data is regional rather than
asset-specific. Where outputs are subject to high
levels of uncertainty or lack location-specific
granularity, we have treated the results as indicative
and used them for sensitivity analysis, strategic
planning, and risk prioritisation rather than precise
forecasting. We will continue to assess whether
more current, higher-resolution or location-specific
data becomes available for future reporting periods.
Key sources included:
s Shared Socioeconomic Pathways (SSPs) in the
IPCC Sixth Assessment Report on Climate
Change to inform our consideration of global
socioeconomic changes and data points such
as global temperature changes.
s Network for Greening the Financial System (NGFS)
Scenarios and analysis to inform our consideration
of global physical climate risks and policy and
technology trends in different scenarios.
s Representative Concentration Pathways (RCPs)
in the IPCC Fifth Assessment Report on Climate
Change and Ministry for the Environment and
NIWA Climate Change Projections for New Zealand
to inform our consideration of New Zealand-
specific impacts under different pathways.
These provided data points, such as the increased
number of hot days, and were a key input to our
financial quantification.
s Climate Change Commission Long Term Scenarios
to meet the 2050 target to inform our consideration
OUR APPROACH TO ASSESSING
MATERIALITY
Under NZ CS 3, information is material if omitting,
misstating or obscuring it could reasonably be
expected to influence decisions that primary users
(existing and potential investors, lenders, and other
creditors) make on the basis of an entity’s Climate-
Related Disclosures (CRDs).
The principle of considering the impact of information
on capital allocation decisions of end users is broadly
consistent with the materiality principle applicable
to preparing financial statements and the continuous
disclosure rules under the NZX Listing Rules.
Our approach to assessing the materiality of
information included in this Climate Statement,
including CRROs, is to consider whether the
information or the way in which information is
presented could influence the decisions of users of
our Climate Statement. When assessing materiality,
we evaluate both quantitative and qualitative factors
using our risk matrix.
s Quantitative assessment: any quantitative
impact using 2% of EBITDAF (Earnings before
net interest expense, tax expense, depreciation
and amortisation, unrealised change in the
fair value of financial instruments, gain on sale
and impairments) (rounded, this equates to
$20 million), as a threshold figure for materiality.
This is the same quantitative materiality threshold
used for preparing our financial statements.
of how different scenarios could play out in
New Zealand, including for renewable energy.
s Climate Change Projections for New Zealand from
Earth Sciences New Zealand, the Ministry for the
Environment and Stats NZ, including localised
precipitation, and wet day projections, which
supported the quantification and assessment
of CRROs and scenarios.
s Ministry for the Environment’s Climate Change
Projections Summary Dashboard, based on NIWA
regional climate modelling, to support workshop
discussion of regional climate hazards and potential
asset exposure and inform qualitative assessment
and scenario discussion.
s Historical wholesale price trends from the Electricity
Authority New Zealand, economic modelling from
BERL (Business and Economic Research Limited)
on the economic impact of electricity price changes
and electricity cost and price monitoring from
Ministry of Business, Innovation & Employment,
which informed our understanding of market
and customer-related risks.
s Research commissioned by the Parliamentary
Commissioner for the Environment on the
economics of electricity pathways, which
provided insights into long-term system costs
and transitions.
s Global analysis of renewable energy project
commissioning timelines from ScienceDirect
to inform expectations around average delivery
durations and common causes of delay across
technologies and jurisdictions.
s Challenges impacting the delivery of renewable
energy projects from McCullough Robertson
to support our understanding of current
infrastructure constraints and external risks
to timely project delivery.
s The impact of planning and regulatory delays
for major energy infrastructure from EcoStor
GmbH to highlight system-wide consenting
and regulatory barriers that affect
infrastructure rollout.
s Qualitative assessment: whether the information
could influence the decisions of primary users,
regardless of its quantitative impact, due to the
nature of the information and/or circumstances.
Aligned to our risk framework, we consider
impacts to:
— Health and safety
— Legal requirements
— Regulatory and environmental compliance
— Our reputation
— Operations and people
More broadly, we consider the general interpretation
of the type of information and whether the lack of
information could be material. We follow a four-step
process to assess materiality of information in the
preparation of Climate-Related Disclosures:
1. Identify: information that is potentially material
using our risk matrix, considering both
requirements of the NZ CS and knowledge
and information needs of primary users.
2. Assess: both qualitative and quantitative factors.
3. Organise: prepare clear and concise disclosures.
4. Review: internally (and externally if useful).
OUR SCENARIOS CONT.
85MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
Mercury’s Greenhouse Gas Emissions Inventory is
included in this Climate Statement and has been
measured and prepared in accordance with The
Greenhouse Gas Protocol: A Corporate Accounting
and Reporting Standard and the Corporate Value
Chain (Scope 3) Accounting and Reporting Standard.
The inventory section provides further information
on the methods, assumptions, limitations, and
uncertainties used in calculating our emissions.
This Metrics and Targets section focuses on the
targets and other climate-related metrics we use
to measure and manage our CRROs, including
physical risk exposure, transition risk exposure,
climate-related opportunities, capital deployment,
internal emissions price, and remuneration.
Our gross emissions continue to be primarily driven
by scope 1 emissions, which represented approximately
45% of our total emissions profile in FY26. In FY26,
our gross emissions were 432,404 tCO
2
e (FY25:
METRICS AND TARGETS
SCOPE
3
SCOPE
(Location-
based)
2
SCOPE
1
FY24
(tCO
2
e)
FY26
(tCO
2
e)
FY25
(tCO
2
e)
174,597
234,557
205,443
165,746
2,112
1,556
2,353
2,123
239,574
196,291
216,995
222,736
Base year
FY22
(tCO
2
e)
424,791 tCO
2
e; FY24: 416,283 tCO
2
e), and our scope 1
emissions were 196,291 tCO
2
e (FY25: 216,995 tCO
2
e;
F Y24: 239,574 t CO
2
e). Over the past decade, our
gross emissions have declined significantly, driven
by the closure of our Southdown gas-fired power
station in FY16, the natural decline in fugitive
geothermal emissions, and our continued investment
in geothermal NCG reinjection.
Our emissions intensity for FY26 was 0.0191 kg CO
2
e/
kWh (FY25: 0.0234 kg CO
2
e/kWh; FY24: 0.0240 kg
CO
2
e/kWh), representing an 18% decrease from FY25
and a 26% decrease compared with our FY22 base
year. This movement reflects higher hydro generation
this year and lower emissions from geothermal
generation. Since FY15, our emissions intensity
has decreased by 73%.
Scope 3 emissions from total gas sales now make up
approximately 28% of our total gross emissions. In
FY26, Scope 3 emissions from total gas sales were
119,803 t CO
2
e, representing a year-on-year decrease
of approximately 3.3% from FY25.
Capital goods emissions also increased in FY26,
primarily reflecting construction activity across
our major renewable generation projects. This
subcategory includes construction emissions from
Stage 2 of Kaiwera Downs Wind Farm, Kaiwaikawe
Wind Farm, and the Ngā Tamariki Geothermal
Station expansion. With construction activity for
both wind farms concentrated in FY26, associated
emissions are expected to have peaked in the current
year and to decline materially in FY27 as the projects
are completed.
Under the New Zealand Emissions Trading Scheme,
we surrender New Zealand Units (NZUs) to meet
compliance obligations associated with our
geothermal emissions. This is separate from our
emissions reduction targets. We continue to manage
our future NZU requirements through a range of
Emissions Intensity
Data from FY2015 to FY2021 presented in this graph has not been subject to assurance procedures.
Emissions
0
2,000
4,000
6,000
8,000
10,000
12,000
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
FY15FY16FY17FY18FY19FY20FY21FY22FY23FY24FY25FY26
GENERATION (
GWh)
EMISSIONS INTENSITY (kg CO
2
e/kWh)
FINANCIAL YEAR
Total Generation (RHS)Mercury Generation Emissions IntensityNZ Grid Emissions Intensity
0
100,000
532,171425,625323,687292,436290,314266,827245,131222,736213,645239,574216,995
2,1231,3762,1122,353
165,746183,396174,597205,443
200,000
300,000
400,000
500,000
600,000
FY25
196,291
1,556
234,557
FY26FY24FY23FY22FY21FY20FY19FY18FY17FY16FY15
TONNES CO
2
e
Scope 1
Scope 2
Scope 3
86MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
Water useFY22–FY24FY25FY26
Geothermal
Total Take ( Tonnes)7 7,525, 29680,693,87781,372,70681,487,938
Total Reinjection (Tonnes)65,738,23068,195,04768,761,44469,215,202
Hydro
Non-consumptive water use (Mm
3
)6,5277, 2006,075 8,697
METRICS AND TARGETS CONT.
supply arrangements and investments, while gas
sales-related obligations are managed through our
gas supply arrangements.
Mercury's gross Scope 1, Scope 2, and Scope 3
emissions, emissions intensity, consolidation
approach, emission factors, global warming potentials,
exclusions, methods, assumptions, limitations,
uncertainty, and base year restatements are set out
in the Greenhouse Gas Emissions Inventory section
of this Climate Statement, on page 94.
MEASURING OUR IMPACT – CROSS
INDUSTRY MEASURES AND OTHER
ACTIVITY METRICS
In addition to emissions metrics, we continue to use
the International Sustainability Standards Board (ISSB)
sector metrics for Electric Utilities and Power
Generators to guide how we report on activity metrics
relevant to the management of CRROs. These metrics
have been assessed for their materiality to us, and the
relevant metrics are disclosed in the table below.
Our geothermal generation relies on the careful
management of geothermal fluid, extracting it for
electricity generation and reinjecting it underground
to help sustain the resource. In FY26, geothermal
water take and injection remained broadly
consistent with previous years, reflecting stable
operations across our geothermal generation sites.
We are a non-consumptive user of water through our
hydro power stations. Water passes through turbines
or is spilled, continuing its journey downstream.
Hydro water flow is measured using a combination
of turbine flow and spill flow. Turbine flow is
calculated based on megawatt output and flow
ratings, while spill flow is estimated using water
level measurements and the position of spill gates
when water bypasses the turbines. Both are
combined to report total non-consumptive water
use. In FY26, non-consumptive hydro water use
rose considerably, reflecting increased water flows
through our hydro system.
We do not extract water from regions with High or
Extremely High baseline water stress, and there
were no incidents of non-compliance with water
quantity permits from operational sites during FY26.
FUGITIVE EMISSIONS
Fugitive emissions are unplanned gas releases,
mainly from our geothermal operations, and
small amounts of sulphur hexafluoride (SF
6
)
and refrigerant gases used in equipment.
MAHINERANGI WIND FARM
87MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 202687
EXPOSURE OF OUR ASSETS
AND ACTIVITIES TO CLIMATE RISKS
AND OPPORTUNITIES
We acknowledge the impact of physical risks,
transition risks, and climate-related opportunities
on our assets and therefore business activities.
Unless otherwise stated, these impacts have not
changed over the preceding two years.
Physical Risk Vulnerability:
In prior years, we disclosed that 100% of our
generation assets and related business activities
were vulnerable to acute physical risks. In FY26,
we refined this metric to focus on generation assets,
which represent the most material component of
our exposure to physical climate risks, to better
reflect differences in vulnerability by asset type,
hazard, and geography. The metrics below relate to
the material physical risks disclosed in the Strategy
section and provide a current-period view of exposure
and vulnerability of our generation sites. They should
be read alongside the relevant physical risk
disclosures, noting that the nature and degree of
assessment differs by hazard, asset type and location.
Using generation site count as the current-period
basis of measurement:
s 47% of our generation sites (hydro) are vulnerable
to drought and changing inflow conditions.
s 26% of our generation sites (wind) are vulnerable
to extreme wind events.
s 100% of our generation sites are exposed to
extreme rainfall and flooding impacts on site
access, surrounding infrastructure or network
connections, although the degree of exposure
varies by location.
This reflects the location of our hydro assets on
the Waikato River, geothermal assets in the central
North Island, and wind assets in Manawatū, South
Taranaki, Otago, and Southland, together with
publicly available New Zealand climate projections.
Our broader business activities, including retail and
corporate functions, are also exposed to physical
risks, primarily through impacts on infrastructure,
supply chains and customer demand. However,
these are not currently quantified and are instead
assessed qualitatively. We are continuing to
enhance our understanding of how these risks
may evolve over time. Details on identified material
risks are disclosed in the Strategy section of this
Climate Statement.
Transition Risk Vulnerability:
Our assets and business activities are vulnerable to
transition risks as described below. The metrics below
relate to the material transition risks disclosed in the
Strategy section and provide a current-period view
of exposure and vulnerability across our assets and
business activities. They should be read alongside
the relevant transition risk disclosures, noting that
the nature and degree of assessment differs by
transition risk driver, asset type, and business activity.
s All of our geothermal generation assets,
comprising 23% of our generation assets
recognised in our FY26 financial statements,
produce geothermal emissions that are vulnerable
to transition risks in the form of rising NZU carbon
prices in the event that geothermal emissions are
unable to be captured and/or reinjected.
s All of our generation portfolio is vulnerable to
climate transition risk from regulatory settings
impacting the balance of the energy trilemma.
Our generation development portfolio is
vulnerable to risks arising from regulatory settings
constraining renewable electricity development.
s All of our gas sales activities, comprising 4.5%
of FY26 revenue, are vulnerable to transition risks
in changes in regulatory settings and/or changes
in consumer preferences away from fossil fuels.
All, (i.e. 100%), of our existing electricity generation
assets are considered aligned with climate-related
opportunities as enablers in New Zealand’s low-
carbon transition. This metric relates to the material
climate-related opportunity disclosed in the
Strategy section that the low-carbon transition may
lift electricity demand. It should be read alongside
the relevant opportunity disclosure, noting that
the nature and degree of opportunity varies by
future demand scenario.
The majority of our capital deployment is aligned
with climate-related opportunities. Growth capital
expenditure allocated to new renewable generation
development totalled $153 million in FY24, $347
million in FY25 and $560 million in FY26 (99%
of growth CAPEX in FY26). We are also currently
pursuing climate-related opportunities to reduce
emissions through developing reinjection of
geothermal non-condensable gases.
We use the Carbon NZU spot price to value our
inventory of carbon units. As at 30 June, the Carbon
NZU spot price was FY26: $54/t, FY25: $59/t, FY24:
$50/t. We also have an internal emissions price
forecast – a metric representing the cost per metric
NGĀ TAMARIKI GEOTHERMAL STATION
METRICS AND TARGETS CONT.
tonne of CO
2
e, which guides decision-making within
our operations. This forecast informs strategic
decisions related to buying and selling carbon units
and serves as an input for business cases where they
impact our GHG profile. We assess opportunities
across various carbon forward curve scenarios for
up to 15 years into the future. These ranges, adjusted
for inflation, were FY26: $37/t-$100/t, FY25: $46/t
- $130/t, FY24: $44/t - $127/t.
The volatile carbon prices over the past years have
been primarily due to regulatory measures and
balancing market demand and supply for carbon
units. Long term, the carbon price is expected to
increase, reflecting a growing emphasis on reducing
GHG emissions.
The alignment of management remuneration to
our CRROs is discussed in the Governance section
of this Climate Statement.
88MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
GOVERNANCE
BOARD OVERSIGHT OF CLIMATE-RELATED
RISKS AND OPPORTUNITIES
The Mercury Board, assisted by two Board committees,
the Audit and Financial Risk Committee (AFRC) and
the Safety and Enterprise Risk Committee (SERC), has
oversight of CRROs and CRDs.
The AFRC has delegated authority from the Board
to oversee the preparation of CRDs, including the
identification of CRROs. The AFRC also oversees the
establishment and maintenance by management of
a suitable system of controls for managing climate-
related risks, including the keeping of proper CRD
records. The AFRC meets quarterly and, where
necessary, receives reports with updates on CRROs
and CRDs. Members of the Strategy and Corporate
Affairs Team attend these meetings to facilitate
feedback and discussion. The AFRC endorses and
the Board approves these CRDs each year.
The SERC more widely oversees and monitors our
Risk Management Framework and risk assurance
and internal audit activity. Climate-related risks are
incorporated into our risk registers and are reviewed
by the SERC as part of its oversight of our top
enterprise risks. In FY26, climate-related risks were
considered by the SERC at its May meeting as part
of the annual Risk Management Framework review
and management’s Consolidated Risk Reporting.
The Board approves charters for the AFRC and SERC
to govern their annual programme of work. Committee
Chairs deliver verbal updates at each Board meeting
on relevant discussions and decisions reached at
committee meetings, and the minutes of each
committee meeting are provided to all directors.
Sustainability and Kaitiakitanga / Stewardship are
embedded in our operating model, strategy, and
existing governance structures. Accordingly, the
Board has not established a separate sustainability
sub-committee.
The Board is responsible for monitoring strategy
implementation and performance. Quarterly, the
Board discusses relevant external environment
developments and progress towards our FY30
Priorities, including relevant climate-related changes
and elements of our CRROs. These discussions are
guided by reference to Strategic Monitoring Reports
and performance reports prepared by management.
The Board also receives regular updates from the Chief
Strategy and Corporate Affairs Officer on progress
against our Scope 1, 2, and 3 emissions reduction
targets within our sustainability quarterly updates.
For more detail on these targets, refer to the Metrics
and Targets section of this Climate Statement.
Climate considerations informed the reset of our long-
term aspirations in FY23, the reset of our three-year
objectives in FY24, and the reset of the broader strategy
in FY25. In FY26, we updated our strategic objectives
to recognise the progress we had made. Our climate-
related opportunities are reflected in our FY30 Priorities
to “Deliver more reliable and renewable energy” and
“Accelerate the shift to a low-carbon future”.
SKILLS AND COMPETENCIES TO PROVIDE
OVERSIGHT OF CLIMATE-RELATED RISKS
AND OPPORTUNITIES
Through the Nominations and Corporate Governance
Committee, the Board regularly assesses its skills and
competencies and monitors skills required for
succession planning purposes. Competencies relating
to the climate and environment are specifically
considered, and the Board Skills Matrix includes
the following as a key skill of the Board: “Climate,
environmental and natural resources stewardship,
including water, land, biodiversity, emissions reduction,
adaptation/resilience, sustainability reporting, and
climate-related financial risk. Ability to govern Mercury’s
kaitiakitanga obligations while balancing reliable
renewable growth, resource access, community
expectations, and long-term asset resilience”. In FY26,
two directors were assessed as having “substantial”
competency in this area, two directors with “medium”
competency and three directors with “some”
competency. Director competency in this area is
demonstrated through governance or executive
experience in climate, environment, water/natural
resources, sustainability reporting, adaptation,
infrastructure resilience, or resource stewardship.
In particular, Mercury’s Board includes:
s One director with extensive New Zealand
and international experience working in climate
change and sustainability, including as the
Global Sustainable Development Leader of
an overseas company reporting annually under
the United Nations Global Compact and working
with international groups on sustainable
infrastructure matters;
s Another director who has previously served
on the steering committee of Chapter Zero New
Zealand, a global network of directors committed
to climate action and who holds the Institute of
Director’s (IoD) Climate Governance Credential;
s A third director with several previous and current
executive and governance roles across
sustainability-focused businesses and governance
committees and who has completed the IoD’s
advanced Climate Governance programme; and
s Two further directors who have completed the
Governing Natural Capital Course hosted by
Deloitte and the Aotearoa Circle.
The Board also draws on internal and external
expertise and advice as required to stay up to date
with current information and enable appropriate
and informed oversight of CRROs.
In FY25, management engaged PwC to support the
financial quantification of climate-related risks and
to build internal capability in assessing their potential
organisational impacts. This work was utilised and
reported back to directors and the Board through
the AFRC. Updates on climate-related trends are
also included as part of quarterly Strategic Monitoring
Reports presented to the Board.
MANAGEMENT’S ROLE IN ASSESSING
AND MANAGING CLIMATE-RELATED
RISKS AND OPPORTUNITIES
The Board delegates all operational matters to the
Chief Executive, including the management of CRROs.
The Chief Strategy and Corporate Affairs Officer and
her team facilitate the preparation of climate-related
disclosures, including identifying metrics and targets,
and reporting on progress against those targets. The
wider management team is responsible for ensuring
that CRROs and their current impacts are effectively
identified, assessed, and managed across the business.
Our annual CRDs are prepared by management,
reviewed through the Risk Management Committee
(RMC) and AFRC governance process, and approved
by the Board before publication.
The key inputs this year were:
s Analysis by the cross-functional Climate Working
Group, which conducted workshops to update and
refine our scenarios, risks, opportunities, and
current impacts and
s Financial quantification of our risks and
opportunities.
RISK MANAGEMENT COMMITTEE
The Risk Management Committee (RMC) is
accountable for implementing the Board approved
Risk Management Policy. The RMC’s mandate
is to establish and promote risk awareness among
all staff, implement and communicate effective
risk management and internal control frameworks,
regularly monitor, report, and review risk activities,
and ensure sufficient business resources for effective
risk management. Where material, risks and issues
are escalated to the RMC.
The RMC includes the ELT, the Head of Risk Assurance,
and the General Counsel, and is chaired by the Chief
Executive. The RMC meets approximately 10 times
per year.
89MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
MANAGEMENT REMUNERATION IS LINKED
TO MANAGEMENT OF CLIMATE-RELATED
RISKS AND OPPORTUNITIES
The remuneration of the Chief Executive and the
ELT is linked to our strategic objectives, purpose
and goals. The Short-Term Incentive (STI)
component of remuneration is set as a percentage
of the executive’s base salary and for FY26 was set
at 50% for the Chief Executive (FY25 50%; FY24
60%) and up to 50% for other ELT members (FY25
40%; FY24 35%). A proportion (70% for the Chief
Executive and 70% for other ELT members in FY26)
of the STI is related to a shared set of Group Key
Performance Indicators (KPIs) that form our Group
Scorecard and are aligned with our strategic
objectives. Climate-related KPIs have been a
consistent component of our Group Scorecard,
comprising 10% in FY26 on the basis of the KPI most
directly aligned to the prior-year Climate scorecard
category, compared to 15% in FY24, and 10% in FY25.
FY25 – 27
Three-Year Objective
FY26 KPIFY27 KPIFY25 KPI
Deliver more reliable
and renewable energy
and accelerate the shift
to a low-carbon future
• Generation availability
target met
• Deliver two of three
outcomes: advancement
of new demand or
commercial and
industrial electrification;
progress emissions
reduction; Sector and
Government Energy
Transition Framework
• Delivery of generation
development projects
• CO
2
e emissions, firming
capacity and demand
capacity from electricity
and the energy system
• Advancing the Plan
to 3.5TWh of new
renewable energy
production by 2030
GOVERNANCE CONT.
ARATIATIA RAPIDS
In FY26, this KPI related to accelerating the shift
to a low-carbon future. The FY26 Group Scorecard
also included a separate KPI relating to delivery
of generation development projects under “Deliver
more reliable and renewable energy”, which is shown
in the table below as it supports Mercury’s transition
strategy. For FY27, the relevant KPIs are grouped
under one combined objective covering delivery of
reliable and renewable energy and accelerating the
shift to a low-carbon future.
The approach to executive remuneration, including
the incorporation of climate-related KPIs in the STI
scorecard, is overseen by a committee of the Board,
the People and Performance Committee (PPC).
Progress against the Group Scorecard is monitored
by the Finance Team and reported to the PPC
quarterly. The PPC reviews annual STI performance
appraisal outcomes for all members of the ELT,
including the Chief Executive, and endorses these
for Board approval.
90MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
Management and Governance Meetings in FY26-27
Review and endorsement of the FY25 Climate
Statement, GHG Inventory and Climate Action Plan
Review of our approach to CRDs against market practice
Review of our approach to CRDs against market practice
Update and endorsement of the FY26 Climate
Scenario Analysis and CRRO identification
Initial review of the FY26 Climate Statement (including
GHG Inventory)
Further review of the FY26 Climate Statement
(including GHG Inventory) and Climate Action Plan
Final review of the FY26 Climate Statement, GHG Inventory
and Climate Action Plan
Board Meeting; Discuss external changes and progress toward
our strategic objectives, approve FY25 Climate Statement
Strategy Day; Discuss external changes.
Board Meeting; Discuss progress toward our strategic objectives,
and strategic opportunities, including climate-related ones
Board meeting; Discuss progress toward our strategic
objectives and sustainability quarterly update
Board meeting; Discuss progress toward our strategic
objectives and sustainability quarterly update
Board meeting; Discuss external changes and
progress toward our strategic objectives
Discuss sustainability quarterly update
Strategy Day; Discuss external changes.
Board meeting; Discuss progress toward our strategic objectives,
and strategic opportunities, including climate-related ones
Board meeting; Discuss progress toward our strategic
objectives and sustainability quarterly update
Board Meeting; Approval of the FY26 Climate Statement
(including GHG Inventory) and Climate Action Plan
AUDIT AND FINANCIAL RISK COMMITTEEBOARD
BOARDMANAGEMENT
OCT 25
JAN 26
APR 26
JUN 26
JUL 26
AUG 25
NOV 25
DEC 25
FEB 26
MAR 26
MAY 26
AUG 26
RISK MANAGEMENT COMMITTEE
Update on FY26 Climate Scenario Analysis
and CRROs identification
Initial review of the FY26 Climate Statement (including
GHG Inventory)
Further review of the FY26 Climate Statement
(including GHG Inventory) and Climate Action Plan
Final review and endorsement of the FY26 Climate Statement,
(including GHG Inventory) and Climate Action Plan
GOVERNANCE CONT.
91MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
OPERATIONS
MANAGEMENT
CHIEF
EXECUTIVE
COMMITTEES
BOARD
• Embeds climate change into risk
management, business strategy and planning,
budgeting processes, and frameworks
• Identify, consider, and monitor CRROs,
reporting to the AFRC, SERC, and the Board
• Ensures business areas identify, manage,
and escalate risks appropriately
• Implement risk mitigation strategies
• Reviews quarterly sustainability updates
• Monitors emerging risks and opportunities
• Prepares and presents climate-related risk
reports to the SERC and AFRC (as appropriate),
including actions taken to mitigate risks
• Committee of the ELT and Risk Assurance Team,
General Counsel, chaired by the Chief Executive
• Oversees risk reporting from the Risk Assurance
Team (who report to the Chief Financial Officer)
• Promotes risk awareness and appropriate
risk management
• Monitors and reviews risk activities at
approximately 10 meetings each year
• Reporting of business risk is coordinated
through the Risk Assurance Team and Head
of Risk Assurance. Climate-related risks and
opportunities are reported to the RMC by
the Strategy and Corporate Affairs Team
• Engages third-party experts for services such
as auditing, specific climate research or strategic
management consulting when appropriate
S TAFF
Identification and day-to-day management of CRROs is dispersed throughout Mercury
OUR BOARD
AUDIT AND FINANCIAL RISK COMMITTEE (AFRC)
• Oversees and monitors financial and climate-related risk
• Oversees CRROs and CRDs
• Oversees controls for managing climate-related risks
and keeping of CRD records
EXECUTIVE LEADERSHIP TEAM (ELT)
CHIEF EXECUTIVE
RISK MANAGEMENT COMMITTEE (RMC)
SAFETY AND ENTERPRISE RISK COMMITTEE (SERC)
• Oversees and monitors all other risks (i.e. other
than financial, climate-related and people)
• Oversees Risk Management Framework and risk assurance
and internal audit activity
PEOPLE AND PERFORMANCE COMMITTEE (PPC)
• Oversees and monitors people risk
• Oversees climate-related KPIs in the management
Group Scorecard
• Endorses STI outcomes for Board approval
• Approves scenarios, strategy, Risk
Management Policy, and targets
• All operational matters are delegated to the Chief Executive
by the Board, including responsibility for risk management.
• Oversees implementation through the Executive Leadership Team,
Risk Management Committee and business areas, with reporting
to the Board and Committees as appropriate.
• Receives quarterly updates on
progress against emissions
reductions targets
• Receives updates from
Committee Chairs
• Approves statutory reporting,
including CRDs
• Approves management
STI outcomes
Overview and Relationship Between Responsibilities of Our Board, Sub-Committees and Management
GOVERNANCE CONT.
92MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
RISK MANAGEMENT
PROCESSES FOR IDENTIFYING AND
ASSESSING CLIMATE-RELATED RISKS
Risk management is integral to our business.
Our Risk Management Policy, supported by a suite
of risk management tools and practices, embeds
enterprise risk management competence across the
business. This ensures we have a consistent method
of identifying, assessing, controlling, monitoring,
and reporting on the potential risks to our business
and to the achievement of our strategy.
Our Climate Working Group supports the
identification of climate-related risks through
scenario analysis, internal stakeholder engagement,
and external data reviews (see the Scenario Analysis
section in this Climate Statement). The relevant
risk owners then assess risks using the defined risk
assessment criteria, and relevant data to understand
whether potential risks are material and to
understand the likelihood and impact of these risks.
In FY26, we built on the financial quantification work
undertaken in FY25. This informed the assessment of
our CRROs, with anticipated financial impact ranges
remaining aligned to the financial ranges in our Risk
Management Framework.
IMPACT
InsignificantMinorModerateSignificantMajorFundamental
LIKELIHOOD
Almost Certain
Highly Likely
Probable
Possible
Unlikely
Rare
Annually, climate-related risks are classified and
assessed alongside other types of risks using a
common methodology (our risk matrix assigns risk
levels based on a combination of likelihood and
impact scoring – shown below). Our risk matrix
requires consideration of both estimated quantitative
impacts, such as loss of revenue or increases in
costs, and qualitative impacts, such as loss of social
licence, or reputational impacts. The likelihood is
measured against the probability of a risk occurring
in any given year.
To determine materiality of CRROs, we assess
whether the information or the way in which
information is presented could influence the
decisions of users of our Climate Statement,
considering both quantitative (financial impacts)
and qualitative factors (non-financial impacts).
Climate-related risks disclosed in our Climate
Statement are integrated into our enterprise risk
management framework via the risk register.
These are assigned to relevant business units,
which are responsible for developing mitigation
strategies and reporting on progress.
RISK MANAGEMENT FRAMEWORK
Our Board approved Risk Management Framework
aligns with Aotearoa New Zealand Standard AS/NZS
ISO 31000 Risk Management – Principles and
Guidelines. It helps us to identify different categories
of risk – health, safety and wellbeing, compliance,
operational, reputational, financial and people risks.
Climate-related risks are fully integrated into
our enterprise Risk Management Framework with
oversight from the RMC, AFRC and SERC. This
ensures they are actively monitored and managed
across the business. These risks are monitored
using our risk register and are reassessed on an
ongoing basis to reflect changes in external factors,
regulatory developments, and business conditions.
More information on our risk management approach
can be found in the Assurance and Managing Risk
Section of our Corporate Governance Statement
on our website.
MANAGING CLIMATE-RELATED RISKS
The day-to-day management of climate-related
risk occurs across various business units including
Wholesale Markets, Generation, Generation
Development, Customer, Finance and Legal, and
Sustainability, with escalating responsibilities up
to the RMC. The SERC and AFRC oversee the
appropriate management of our climate-related
risks and the implementation of effective systems
of control, assurance, reporting, policies, and
procedures in place.
In relation to markets, our Wholesale Markets and
Finance teams manage risks and opportunities
presented by:
s The electricity market—we continually model
scenarios of resource availability, electricity
market supply and demand, and adjust our
approach accordingly.
s The carbon market—we are involved in forest
carbon investments and have long-term
contracts in place.
Regulatory risks and opportunities are managed
by the Strategy and Corporate Affairs team. We
engage in broader regulatory and sector work where
climate-related considerations arise, including
Electricity Authority work programmes to support
market arrangements that enable a more
renewable future.
Physical risks and opportunities from climate
change fall into acute (event-driven), such as
increased severity of extreme weather events,
and chronic (longer-term shifts in precipitation
and temperature and increased variability in weather
patterns, such as sea level rise). We continue to
monitor proposed methodologies for climate change
risk assessment and adaptation planning, both
nationally and internationally.
We have models of storm events experienced within
the Waikato Hydro System (WHS) and we work in
partnership with Waikato Regional Council to engage
in periodic training exercises and flood simulations
to educate and familiarise our staff and council
staff on the management of storms and flood risks.
We continue to refine and mature our climate-related
scenario analysis to assess the impacts of our
changing climate on our assets and business while
working with research organisations to improve the
quality of our climate data, including potential future
inflows to the WHS. During FY26, we continued to
develop a tool commissioned by the Dam Safety
Hydrology Group to incorporate climate change into
flood modelling for the Waikato Hydro catchments.
The tool can now support climate change assessments
of potential flood levels out to 2100.
93MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
REPORTING PERIOD
Our GHG emissions have been measured and
prepared in accordance with The Greenhouse Gas
Protocol: A Corporate Accounting and Reporting
Standard (revised edition) and the Corporate Value
Chain (Scope 3) Accounting and Reporting Standard.
The inventory supports Mercury's disclosures under
the Aotearoa New Zealand Climate Standards,
including NZ CS 1 and NZ CS 3.
This inventory covers the reporting period 1 July
2025 to 30 June 2026. Comparative data is
presented for FY2022 to FY2025 where available
and relevant to support trend analysis and base
year comparison.
EntityPrincipal ActivityTypeInterest Held
as at 30 June 2026
Country
Mercury NZ LimitedElectricity generation (hydro, wind, and
geothermal), electricity, gas and telco retail
Listed Company (NZX Main Board and
ASX Foreign Exempt Listing)
100%New Zealand
Mercury Geothermal LimitedElectricity generation (geothermal)Subsidiary100%New Zealand
TPC Holdings LimitedInvestment holdingAssociate25%New Zealand
Rotokawa (Joint Venture)Steamfield operationJoint Operation64.8%New Zealand
Ngā Awa Pūrua (Joint Venture)Electricity generationJoint Operation65%New Zealand
NOW New Zealand LimitedBroadband retailSubsidiary100%New Zealand
EnergySource LLCInvestment holdingJoint Venture20.86%United States
EnergySource Minerals LLCMineral extractionJoint Venture9.68%United States
Forest Partners Limited PartnershipForestry managementAssociate10%New Zealand
GREENHOUSE GAS EMISSIONS INVENTORY
This section forms our GHG Emissions Inventory
1
for the financial year ended 30 June 2026. It brings the information previously
published in our standalone GHG Emissions Inventory Report into this Climate Statement, creating a single source of emissions data.
Table 1: Summary Of Entities and Treatment of Joint Ventures
CONSOLIDATION APPROACH
We apply the operational control consolidation
approach to our GHG inventory to determine
organisational boundaries. This allows us to focus
on the emissions where we have operational control
and can investigate the potential to manage and
reduce these. The table below sets out how each
entity is treated.
Our organisational boundary determines the
parameters for GHG reporting and is set with
reference to the GHG Protocol. The boundary
encompasses the operations owned and controlled
by Mercury, our subsidiaries, associate companies,
and joint ventures.
EMISSIONS ASSESSMENT AND
MATERIALITY
We assess our business activities and facilities for
emissions sources using the GHG Protocol. Emissions
sources from prior years are maintained unless the
associated business activity or facility has ceased or
been divested.
We consider Scope 1 and Scope 2 emissions as
material. For Scope 3 emissions, we may exclude
categories where emissions are estimated as being
below 5% of total emissions across all categories,
provided the total excluded emissions
do not exceed 5% of all emissions.
ORGANISATIONAL BOUNDARIES
100% of emissions from Mercury NZ Limited,
Mercury Geothermal Limited, TPC Holdings Limited,
Rotokawa (Joint Venture), Ngā Awa Pūrua (Joint
Venture), and NOW New Zealand Limited are
included within Mercury’s operational boundary
and therefore reported within Scope 1, Scope 2,
and Scope 3 emissions.
EnergySource LLC, EnergySource Minerals LLC,
and Forest Partners Limited Partnership are outside
Mercury’s operational control and are treated as
Scope 3, Category 15 emissions based on the
percentage of interest held. These have been
assessed as immaterial.
1
All emissions figures are gross emissions unless stated otherwise. They exclude removals and exclude the purchase, sale or transfer of GHG offsets or allowances. Scope 2 emissions are calculated using the location-based method.
94MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
ScopeCategoryFY2022
tonnes CO
2
e
FY2023
tonnes CO
2
e
FY2024
tonnes CO
2
e
FY2025
tonnes CO
2
e
FY2026
tonnes CO
2
e
Scope 1 - direct emissionsGeothermal emissions for exported power222,345212,382236,307212,531193,714
Sub-total generation emissions222,345212,382236,307212,531193,714
Scope 1 - direct emissions contd.Mobile combustion (vehicle fleet)246398335123502
Stationary combustion (generation site plant and equipment)934622,9274,3142,000
Fugitive emissions (sulphur hexafluoride (SF6) releases)524035049
Refrigerant gases---2726
Total Scope 1222,736213,645239,574216,995196,291
Scope 2 - indirect emissionsElectricity consumption (location-based)2,1231,3762,1122,3531,556
Total Scopes 1 and 2224,859215,021241,6862 19, 348197,8 47
Scope 3 - indirect emissionsPurchased Goods and Services6,5849,0299, 37814,15512,361
Capital Goods20,54937,17 728,73266,192100,302
Fuel and energy related activities: Transmission and distribution losses124104190186118
Fuel and energy related activities: Huntly Strategic Reserve----1,177
Business travel and accommodation2101,1761,1861,049796
Use of sold products (gas and LPG sales)138,279135,910135,111123,861119,803
Total Scope 3165,746183,396174,597205,443234,557
Total All Scopes390,605398,417416,283424,791432,404
Table 2: Summary of Mercury’s Emissions
GREENHOUSE GAS EMISSIONS INVENTORY CONT.
Note: Data from FY2022 to FY2024 for Purchased Goods and Services and Capital Goods presented in table 2 has not been subject to assurance procedures.
95MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
Table 3: GHG Emissions, Reductions and Intensity Calculations for Mercury’s Electricity Generation
GHG HoldingsFY2015FY2022FY2025FY2026
Scope 1 - Direct Emissions from generation (tCO
2
e)529,900222,345212,531193,714
Total annual reductions (tCO
2
e)-19,19923,7 7618,817
Total reductions from FY2015 (tCO
2
e) -307,555317,369336,186
% Reduction from FY2015 (tCO
2
e)-58.04%59.89%63.44%
Total Generation (GWh)7,5838,6569,08110,146
Emissions Intensity (kg CO
2
e/kWh)0.0700.0260.0230.019
Emissions Intensity NZ grid electricity
2
(kg CO
2
e/kWh)0.1200.1030.0890.079
Emissions Intensity reduction from FY2022 base year--8.90%25.67%
Emissions Intensity reduction from FY2015-63.30%66.57%72.72%
GREENHOUSE GAS EMISSIONS INVENTORY CONT.
2
The NZ grid Electricity Emissions Intensity is based on MfE advised figures. The FY figure is calculated by averaging the emissions intensities from that and the previous calendar years. The FY26 figure is based
on CY2025 only.
Data from FY2015 presented in table 3, has not been subject to assurance procedures.
FY16-FY21 information is presented in Appendix B.
EMISSION FACTORS AND GWP SOURCES
GHG specific information
Our GHG emissions are converted to tonnes of carbon
dioxide equivalent (tCO
2
e) using relevant emission
factors and global warming potential (GWP) rates.
Emission factors are sourced from physical sampling
for geothermal fugitive emissions, New Zealand
Government guidance, IPCC publications, Thinkstep
documents, and other recognised GHG emissions
databases, where relevant.
GWP rates are sourced from the latest Ministry for
the Environment guidance, and Thinkstep documents,
based on AR5. In previous years, direct methane
emissions from geothermal sources were converted
using different GWP rates due to variations in
calculation methodologies. These methodologies
have now been aligned.
EMISSIONS INTENSITY
Our emissions intensity for FY2015, the base year
(i.e., FY2022), and FY2025 to FY2026 are shown
in Table 3 and Figure 1. Our emissions intensity
is impacted by the volatility of hydro and wind
generation. The intensity calculation uses gross
Scope 1 generation emissions only, no adjustments
have been made in relation to NZUs surrendered
under the NZ ETS.
GHG EMISSIONS CALCULATIONS
AND RESULTS
Emissions source data sets were gathered from
across the business from metered consumption
points, financial records, and from specific third-
party suppliers such as liquid fossil fuel providers.
The factors required to calculate the associated
emissions are sourced from:
s Analysis of physical samples (for geothermal
fugitive emissions only).
s New Zealand Government guidance documents
published by the Ministry for the Environment
(MfE) - MfE Measuring Emissions: Measuring
Emissions Catalogue 2026.
s Thinkstep-anz. (2024). Emission Factors for
New Zealand: Greenhouse Gas Emission Intensities
for Commodities and Industries. v1.1. Wellington:
thinkstep-anz.
Following these calculations, our emissions profile
is dominated by Scope 1 emissions, namely fugitive
emissions from geothermal electricity generation,
which account for approximately 45% of all emissions.
Scope 3 emissions from subcategories Purchased
Goods and Services, Capital Goods, and Use of sold
products are also significant sources of emissions.
WAIKATO RIVER
96MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 202696
Table 4: Summary of Emissions Source Inclusions
ScopeCategoryGHG emission sourceFacilities includedData sourceData collection unitMethod, data quality,
uncertainty (qualitative)
Scope 1Fugitive emissionsFugitive emissions from
geothermal generation
Kawerau, Mōkai, Ngā Awa
Pūrua, Ngā Tamariki, Rotokawa
Records from sites, submitted
as part of NZ ETS requirements
for the Government
Geothermal ResourcesEmissions factors (EFs) from NZ EPA. Captured
by the geothermal resources team, audited by
Deloitte for ETS use, high quality data
Scope 1Sulphur Hexafluoride
(SF6) releases
SF6 releases during operationsKawerau, Mōkai, Ngā Awa
Pūrua, Ngā Tamariki, Rotokawa,
Arapuni, Aratiatia, Ātiamuri,
Karāpiro, Maraetai I and II,
Ōhākurī, Waipāpa, Whakamaru
Maintenance records
(SF6 top ups)
Asset Management TeamEFs from MfE guidance documents. Review of
calendar year records, reasonable data quality,
medium level of uncertainty due to use of
calendar year for financial year
Mobile combustionVehicle fleet fuelVehicle fleetFuel cards cover most of fuel
purchases, there will be a
limited number of purchases
made by staff using cash/card
FinanceEFs from MfE guidance documents. Review of
fuel card records, good data quality, very low
level of uncertainty
Stationary combustionFuel used in generators and
on-site plant and equipment
Kawerau, Mōkai, Ngā Tamariki,
Rotokawa, Ngā Awa Pūrua.
Aratiatia, Arapuni
Delivery company data
and finance records
FinanceEFs from MfE guidance documents. Review
of delivery company data, good data quality
Refrigerant GasesHydrofluorocarbons (HFCs)
from air-conditioning systems
All generation sites and
office locations
Records from sitesFacilitiesEFs from MfE guidance documents.
Scope 2Electricity – Offices and
other sites
Electricity consumed in
offices and internal sites
Auckland, Wellington, Taupō,
Rotorua, Hamilton, Tauranga,
Oamaru, Palmerston North
Electricity internal customer
category in financial records,
electricity bills for facilities
billed through agents
CustomerEFs from MfE guidance documents. Calculation
based on internal invoicing with some estimation,
low level of uncertainty
Scope 2Electricity generation sitesGrid electricity consumed
at generation sites
Hydro, geothermal, and windSCADA extractTechnologyEFs from MfE guidance documents. Calculation
based on recorded revenue meter data, low level
of uncertainty but some lines consumption may
not be Mercury’s
GREENHOUSE GAS EMISSIONS INVENTORY CONT.
EMISSIONS INCLUSIONS
97MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
ScopeCategoryGHG emission sourceFacilities includedData sourceData collection unitMethod, data quality,
uncertainty (qualitative)
Scope 3: Subcategory 1 –
Purchased Goods & Services
Operational goods
and services
Emissions associated with
acquiring operational goods
and services
AllOperational expense data from
Mercury’s finance system
FinanceEFs from Thinkstep-anz documents.
Calculations based on internal finance data.
Low level of uncertainty
Scope 3: Subcategory 2 –
Capital Goods
Capital GoodsEmbodied emissions from
procurement of capital goods
and related expenditures
AllCapital expenditure data from
Mercury’s finance system
Finance and supplier
provided data
EFs from Thinkstep-anz documents.
Calculations based on internal finance data and
supplier data. Moderate level of uncertainty
Scope 3: Subcategory 3 –
Fuel and energy related
activities
Transmission and distribution
losses for imported electricity
Transmission and distribution
losses for imported electricity
Generation sites, offices
and other internal sites
Electricity invoicing, internal
customer category, and
SCADA extracts
Customer and TechnologyEFs from MfE guidance documents.
Calculation based on internal invoicing with
some estimation and recorded revenue meter
data, low level of uncertainty
Scope 3: Subcategory 3 –
Fuel and energy related
activities
Electricity supply and security
arrangements
Emissions from third-
party electricity generation
purchased by Mercury and
sold to customers
Captured by WholesaleWholesale records of annual
exercised volumes, electricity
generated, and coal used
WholesaleEFs from MfE guidance documents. MSO and
HFO use the NZ Grid Average factor, while HSR
uses the relevant industrial coal factor or the
default where coal type is unknown. Good data
quality, with moderate uncertainty where the
electricity source or coal type is unknown.
Scope 3: Subcategory 6 –
Business travel
Business travel,
accommodation
Emissions from flights,
accommodation, and
car rentals
AllFlight, accommodation,
and car rental reports
Travel service providerEFs from MfE guidance documents. Calculation
based on flights and accommodation invoicing,
good data quality, low level of uncertainty
Scope 3: Subcategory 6 –
Business travel
MileageEmissions from staff business
travel using private vehicles
AllMileage expense claim reportsFinanceEFs from MfE guidance documents. Calculation
based on spend-based assessment of mileage
expenses, moderate level of uncertainty
Scope 3: Subcategory 11 –
Use of sold products
Use of sold products
(including distribution losses)
Gas purchased
(reticulated gas only)
Captured by CustomerReticulated gas invoices
from direct purchases and
nomination report
CustomerEFs from MfE guidance documents. Invoiced
volumes and traded nominations provided
by Customer so high-quality data, carbon
is included in the credits required to be
surrendered under the NZ ETS
Scope 3: Subcategory 11 –
Use of sold products
Use of sold productsLPG purchasesCaptured by CustomerLPG invoicesCustomerEFs from MfE guidance documents. Invoiced
volumes from purchase invoices so high-quality
data
GREENHOUSE GAS EMISSIONS INVENTORY CONT.
Table 4: Summary of Emissions Source Inclusions cont.
EMISSIONS INCLUSIONS CONT.
98MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
The emissions sources listed in table 5 below are excluded from our GHG inventory report because they are considered immaterial in the context of the inventory or may not be applicable.
Table 5: Emissions Source Exclusions
ScopeGHG emission sourceFacilities included / descriptionAssessment / Reason for exclusion
Scope 3: Subcategory 4
Upstream transportation and distribution
Emissions associated with purchased transport and
distribution services, e.g. freight, postage, courier
N/AAssessed as below materiality threshold, high level
of data uncertainty
Scope 3: Subcategory 5
Waste generated in operations
Emissions associated with waste to landfill
from offices and wastewater treatment
AllAssessed as below materiality threshold, high level
of data uncertainty
Scope 3: Subcategory 7
Employee commuting
Emissions associated with employee travel to and
from work
AllAssessed as below materiality threshold
Scope 3: Subcategory 8
Upstream leased assets
Emissions associated with telecommunications
network from leased assets
AllAssessed as below materiality threshold
Scope 3: Subcategory 9
Downstream transportation and distribution
Emissions associated with non-Mercury purchased
transportation and distribution services of products
to customers
N/AAssessed and considered not applicable as we
do not conduct business activities in this area
Scope 3: Subcategory 10
Processing of sold products
Emissions associated with processing of sold productsN/AAssessed and considered not applicable as our
sold products do not undergo further processing
Scope 3: Subcategory 12
End-of-life treatment of sold products
Emissions associated with end-of-life of
broadband routers and household appliances
N/AAssessed as below materiality threshold
Scope 3: Subcategory 13
Downstream leased assets
Agricultural emissionsWe lease small landholdings near our generation
facilities to local farmers mainly for grazing
Assessed as below materiality threshold
Scope 3: Subcategory 14
Franchises
Emissions from operations of franchisesN/AAssessed and considered not applicable as
Mercury does not grant franchise licenses
Scope 3: Subcategory 15
Investments
Emissions from companies that Mercury
provides capital and/or financing services to
EnergySource LLC, EnergySource Minerals LLC,
Forest Partners Limited Partnership
Assessed as below materiality threshold
GREENHOUSE GAS EMISSIONS INVENTORY CONT.
EMISSIONS EXCLUSIONS
99MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
NOTABLE CHANGES IN EMISSIONS
The most notable change in this year’s inventory is
the increase in capital goods emissions. This reflects
the high level of construction activity across our
renewable generation projects, including Stage 2 of
Kaiwera Downs Wind Farm, Kaiwaikawe Wind Farm,
and the Ngā Tamariki Geothermal Station expansion.
Capital goods emissions are expected to reduce
materially in FY27 as these projects are completed.
A new emissions category, fuel-and energy-related
activities, has also been included in FY26. This
captures emissions associated with electricity
generated by third parties, purchased by us and
sold to customers. These emissions have previously
been below our materiality threshold and have not
been separately disclosed. Following our agreements
supporting the continued operation of Huntly’s
Rankine Units and the establishment of a strategic
fuel reserve from 2026, we have included this
category in the inventory and expect to continue
reporting it going forward.
MŌKAI GEOTHERMAL STATION
GREENHOUSE GAS EMISSIONS INVENTORY CONT.
Our two largest emissions categories, geothermal
generation and the use of sold products from gas
sales, both decreased in FY26. This reflects a reduction
in emissions from the two sources that continue to
make up the majority of our gross emissions profile.
Our geothermal fugitive emissions and emissions
intensity by station for the past eight years are shown
in Figures 1 and 2 below. The results show how
emissions performance has changed over time across
our geothermal stations. Data presented for FY19
to FY21 in Figures 1 and 2 has not been subject to
assurance procedures.
Figure 2: Geothermal Emissions by StationFigure 1: Geothermal Emissions Intensity by Station
KEY:
kgC0
2
e/MWh
FINANCIAL YEAR
0
20
40
60
80
100
120
140
20192020202120222023202420252026
Kawerau
Mōkai
Ngā Awa Pūrua
Ngā Tamariki
Rotokawa
KEY:
tC0
2
e
0
20K
40K
60K
80K
100K
120K
140K
KAWERAUNGĀ AWA PŪRUANGĀ TAMARIKIROTOKAWAMŌKAI
FY2019
FY2020FY2021FY2022FY2023FY2024FY2025FY2026
100MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
THE BASE YEAR, COMPARATIVES,
AND ANY RESTATEMENTS
The chosen base year is 1 July 2021 to 30 June 2022
and is unchanged from previous reports. In line with
the GHG Protocol, additional Scope 3 categories
Purchased Goods and Services and Capital Goods
have been retrospectively applied to the FY2022 base
year and subsequent reporting years following the
finalisation of calculation methodologies. Emissions
reported for FY26 have been assured, whereas
historical emissions for Purchased Goods and
Services and Capital Goods for FY2022 to FY2024
have not yet been subject to assurance.
These updates have increased Scope 3 emissions
for FY2022 by approximately 19%, and contributed
to a higher total emissions figure, ensuring consistency
and comparability across all reporting periods. Table
3 in this report compares our direct emissions over
the past two financial years to our FY2022 base year
as well as to FY15, when we began measuring CO2.
This comparison highlights the improvements and
progress we have made since 2015.
DATA COLLECTION
We have developed robust GHG information systems
to record fugitive emissions from geothermal
generation, which makes up most of our carbon
footprint and have been required to meet our
obligations under the NZ ETS since 2010. These
unique emission factors for geothermal are subject
to external audit and assurance. The preparation
of this emissions inventory report has prompted
collation of additional, less material, data sets in
a way that ensures ongoing conformance with the
GHG Protocol. Future emissions inventory reports
will follow the same data collection and collation
ScopeCategoryFY2015
Tonnes C02e
FY2016
Tonnes C02e
FY2017
Tonnes C02e
FY2018
Tonnes C02e
FY2019
Tonnes C02e
FY2020
Tonnes C02e
FY2021
Tonnes C02e
Scope 1 – Direct EmissionsGeothermal emissions for exported power362,375361,553321,565291,950289,7 76265,212241,544
Thermal combustion (gas-fired generation)167,52563,518-----
Sub-total Generation Emissions529,900425,071321,565291,950289,776265,212241,544
Scope 1 – Direct Emissions ContinuedMobile combustion (company vehicle fleet)461492485449458281316
Stationary combustion (generation
site plant and equipment)
1,712361,61127708563
Fugitive emissions (SF6 releases)98262610101,2493,208
Scope 2 – Indirect EmissionsElectricity consumption (location based)n/rn/rn/rn/rn/rn/rn/r
Total Scopes 1 and 2532,171425,625323,687292,436290,314266,827245,131
Scope 3 – Indirect EmissionsUse of sold products (gas sales)57, 29354,51357, 35663,39262,00967,10466,576
Transmission and distribution losses
for electricity consumption
n/rn/rn/rn/rn/rn/rn/r
Total All Scopes589,464480,138381,043355,828352,323333,931311,707
Appendix A - Historical Data - GHG Emissions Inventory Summary
Data from FY2015 to FY2021 presented in Appendix A has not been subject to assurance procedures.
process, with opportunities taken to improve data
integrity, completeness, and emissions reporting
accuracy. Additional data required to produce this
emissions inventory comes from internal operational
data, with data sets around scope 2 and 3 emissions
sourced from specific providers, internal financial
records, and, where available, supplier provided
emissions data. Quantification of the associated
emissions currently uses spreadsheets to relate
consumption and usage to emissions factors.
Emissions factors are sourced from either New Zealand
Government guidance documents, IPCC publications,
or recognised GHG emission databases.
GREENHOUSE GAS EMISSIONS INVENTORY CONT.
101MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
GHG MetricsFY2016FY2017FY2018FY2019FY2020FY2021
Scope 1 – Direct Emissions from Generation (tC02e)425,071321,565291,950289,7 76265,212241,544
Total Annual Reductions (tC02e)104,829103,50629,6152,17424,56423,668
Total Reductions from FY2015 (tC02e)104,829208,335237,950240,124264,688288,356
% Reduction from FY2015 (tC02e)20%39%45%45%50%54%
Total Generation (GWh)7,8918,5718,6407,8747,5037, 386
Emissions Intensity (kg C02e/kWh)0.0540.0380.0340.0370.0350.033
Emissions Intensity NZ Grid Electricity* (kg C02e/kWh)0.1040.0970.1010.1040.1150.119
Emissions Intensity Reduction from FY2022 Base Year------
Emissions Intensity Reduction from FY201523%46%52%47%49%53%
Appendix B - Historical Data - GHG Emission, Reductions and Intensity Calculations for Mercury's Electricity
* The NZ grid Electricity Emissions Intensity is based on MfE advised figures. The FY figure is calculated by averaging the emissions intensities from that and the previous calendar years. Data from FY2016 to FY2021 presented in Appendix B has not been subject to assurance procedures.
IMPACT OF UNCERTAINTIES
Our GHG emissions inventory follows the GHG
Protocol, using calculation methods based on the
quality of available data and the significance of
each emissions source. The most significant sources
of emissions are fugitive geothermal sources at
geothermal generation sites and emissions from
the use of sold products (gas), both of which have
low levels of uncertainty. Geothermal steam data
is gathered and recorded internally at each site,
the associated emissions factors are subject to
independent assurance. Gas sales data is gathered
from gas measuring systems that are subject to
New Zealand gas measurement technical standards.
Capital goods and purchased goods and services
represent the next largest source of emissions,
calculated for the first time in FY25.
A spend-based method was used for purchased
goods and services, while a hybrid method was
applied to capital goods, combining finance system
data with supplier-provided emissions estimates
for key construction materials. Emission factors
from the 2022 Thinkstep-ANZ data set were used,
with adjustments based on the latest CPI data to
reflect current pricing. Basic price emission factors
were selected to reflect business-to-business
procurement. For spend under $200,000, we
applied an average emissions factor based on
the ratio of emissions to spend over $200,000.
We have used turbine-specific data from our wind
supplier’s life cycle assessment (LCA), focusing
on the turbine only figure. The estimate from the
LCA has been adjusted to align with a cradle-to-
gate boundary for capital goods which excludes
emissions from operations and end-of life. We
acknowledge that both spend-based, and supplier-
derived methods carry high levels of uncertainty
due to generalised emissions factors, boundary
assumptions, and product variation. We are focused
on improving data quality over time, including
reducing reliance on spend-based methods by
using more accurate data based on quantities
or supplier information where possible. Mercury
operates various facilities, including offices, internal
sites, and generation sites, for which Scope 2
imported electricity and refrigerant gas emissions
are calculated.
There are uncertainties in our calculation approach
for these facilities as we rely on estimations based
on employee numbers and usage data from offices
where information is available, in the absence of
comprehensive site-specific data. Our scope 3
emissions from business travel comprise air travel,
accommodation, and staff mileage. Air travel and
accommodation are derived from a third-party
report, and staff mileage is derived from our staff
mileage claims. We reconcile these invoices against
our business travel spend to ensure there are no
significant discrepancies. While these uncertainties
exist, we consider that the impact on our overall
emissions reporting is not material. We do, however,
acknowledge these limitations and will continue
to work on improving data accuracy and reliability.
GREENHOUSE GAS EMISSIONS INVENTORY CONT.
102MERCURY 2026 INTEGRATED REPORT |MENUCLIMATE STATEMENT 2026
A member firm of Ernst & Young Global Limited
Independent Limited Assurance Report
To the Shareholders of Mercury NZ Limited
Under section 461ZH(3) of the Financial Markets Conduct Act 2013, the Auditor-General is the
assurance practitioner of Mercury NZ Limited (the Company) and its subsidiaries and controlled
entities (together referred to as the Group). The Auditor-General has appointed me, Matthew
Cowie, using the staff and resources of Ernst & Young, to carry out a limited assurance
engagement, on his behalf, on the greenhouse gas (GHG) emissions information disclosed
in the Group’s Climate Statement (GHG disclosures), for the year ended 30 June 2026.
Conclusion
Based on the procedures we have performed and the evidence we have obtained, nothing
has come to our attention that causes us to believe that the Group’s GHG disclosures within
the scope of our limited assurance engagement (as outlined below) for the year ended
30 June 2026, are not fairly presented and prepared, in all material respects, in accordance
with Aotearoa New Zealand Climate Standards, issued by the External Reporting Board.
Scope of the engagement
The GHG disclosures below are within the scope of our limited assurance engagement:
• The gross emissions, in metric tonnes of carbon dioxide equivalent, classified as Scope 1,
Scope 2 (location-based) and Scope 3, on page 86.
• The statement describing the standard(s) that the GHG emissions have been measured
in accordance with, on page 86, to the extent this pertains to Scope 1, Scope 2 (location-
based) and Scope 3 GHG emissions.
• The statement on the consolidation approach used to consolidate GHG emissions
on page 94, to the extent this pertains to Scope 1, Scope 2 (location-based)
and Scope 3 GHG emissions.
• The sources (or references to sources, where applicable) of Scope 1, Scope 2 (location-
based) and Scope 3 emission factors and the global warming potential rates used, on
page 96.
• The summary of specific exclusions of Scope 1, Scope 2 (location-based) and Scope 3
emissions sources, including facilities, operations or assets with a justification for their
exclusion, on page 99.
• The description of the methods and assumptions used (including the rationale for doing so,
where applicable) to calculate or estimate Scope 1, Scope 2 (location-based) and Scope 3
GHG emissions, and the limitations of those methods, on pages 97 to 98 and 102.
• The description of any uncertainties relevant to the Group’s quantification of its Scope 1,
Scope 2 (location-based) and Scope 3 GHG emissions, including the effects of these
uncertainties on GHG disclosures, on pages 97 to 98 and 102.
Other matters
As explained in the footnotes to Table 2: Summary of Mercury’s Emissions on page 95 and
Appendix A – Historic Data – GHG Emissions Inventory Summary on page 101, emissions for
Scope 3 - Purchased Goods and Services, and Capital Goods from FY2022 to FY2024 as well
as FY2015 to FY2021 emissions summary data has not been subject to assurance procedures.
As such, it is not covered by our assurance conclusion. Our conclusion is not modified in
respect of this matter.
Certain comparative information, being the Group’s FY22 – FY24 GHG disclosures on
page 86 was assured by Ernst & Young in the firm’s own capacity. Ernst & Young expressed
unmodified reports dated 22 May 2023, 11 August 2023 and 20 August 2024 respectively.
The 2025 comparative information for the GHG disclosures on page 86 was assured by
Ernst & Young on behalf of the Auditor-General.
A member firm of Ernst & Young Global Limited
Key matters
Key matters are those matters that, in our professional judgement, were of most significance
in carrying out this limited assurance engagement on the Group’s GHG disclosures for the
current year.
Key matters were addressed in the context of our limited assurance engagement on the Group’s
GHG disclosures, and in forming our conclusion thereon. We do not provide a separate
conclusion on these matters.
As disclosed on page 98 and 102 of the Climate
Statement, the Group measured the GHG emissions
from Scope 3, Category 1 - Purchased Goods and
Services and Category 2 - Capital Goods, in part,
using the spend-based calculation method per the
GHG Protocol. These Scope 3 components make
up approximately 26% of the Group’s total GHG
emissions and approximately 48% of Scope 3
emissions for the period ended 30 June 2026.
This method estimates emissions by multiplying
the value of purchased goods and services and
capital goods with relevant emission factors.
This approach carries an inherent uncertainty
which may result in significant differences
between estimated and actual emissions.
Future changes to the calculation method or
assumptions could lead to material changes and
restatements of previously reported amounts.
Geothermal generation is a material source of
electricity generation for the Group and accounts
for approximately 45% of the Group’s total GHG
emissions for the period ended 30 June 2026.
These emissions are calculated by measuring
the volume of steam flows by plant and applying
a Unique Emissions Factor (UEF) for each plant.
Since the Group owns and operates the geothermal
plant infrastructure, it conducts the steam flow
measurements.
The UEFs used are calculated internally based on
the properties of the geothermal steam for each
plant. The steam properties are determined by
testing of samples taken throughout the year by
a third party. Where the properties of a plant’s
geothermal steam materially deviates from the
prior year, these emissions factors are externally
assured by a third party.
In reviewing the Group’s measurement and
disclosure of Scope 3 emissions using spend-based
methods, we:
• Gained an understanding of the spend-based
calculation method, assumptions and estimation
uncertainties through enquiries of management.
• Considered the alignment of the Group’s
methodology with the GHG Protocol.
• Considered the reasonableness of the selected
emission factors and their application.
• Performed analytical procedures on the spend
amounts on purchased goods and service and
capital goods used in the calculations.
• Reviewed the adequacy of the disclosures
related to the calculation method, assumptions
and uncertainties in estimating these emission
sources, included on page 98 and 102 of the
Climate Statement.
In reviewing the Group’s measurement and disclosure
of Scope 1 – Geothermal emissions, we:
• Gained an understanding of the calculation method,
assumptions and estimation uncertainties through
enquiries of management.
• Performed analytical review procedures on the
steam flow data which is collated from meters at
each relevant plant and obtained explanations
from management on any unexpected patterns
or anomalies.
• Considered the UEFs used, including reviewing any
changes in the properties of the geothermal steam.
• Reviewed the capabilities, competence and
objectivity of the third party which performs
the testing of the geothermal steam properties.
• Reviewed the adequacy of the disclosures
related to the calculation method, assumptions
and uncertainties in estimating this emission
source, included on page 97 and 101 of the
Climate Statement.
Description of key matter
Description of key matter
How we addressed this matter
How we addressed this matter
Spend-based methods used in measurement of Scope 3, Category 1 -
Purchased Goods and Services and Category 2 - Capital Goods
Scope 1 – Geothermal emissions
The board of directors’ responsibilities
Subparts 2 to 4 of Part 7A of the Financial Markets Conduct Act 2013 set out requirements
for a climate reporting entity in preparing a climate statement, which includes proper
record keeping, compliance with the climate-related disclosure framework and subjecting
it to assurance.
The Aotearoa New Zealand Climate Standards have been issued by the External Reporting
Board as the framework that applies for preparing and presenting a climate statement or
group climate statement. The board of directors of the Group is therefore responsible for
preparing and fairly presenting a Group climate statement for the year ended 30 June 2026,
in accordance with those standards.
The key matters are described below:
A member firm of Ernst & Young Global Limited
• We evaluated whether the Group’s methods for developing estimates are appropriate
and had been consistently applied. Our procedures did not include testing the data on
which the estimates are based or separately developing our own estimates against which
to evaluate the Group’s estimates.
• We performed analytical procedures on particular emission categories by comparing
the expected GHG emissions to recorded GHG emissions and made inquiries of
management to obtain explanations for any significant differences we identified.
• We evaluated the appropriateness of the emission factors applied.
• We evaluated the overall presentation and disclosure of the Scope 1, Scope 2
(location-based) and Scope 3 disclosures.
• Obtained director representation.
The procedures performed in a limited assurance engagement vary in nature and timing
from, and are less in extent than for, a reasonable assurance engagement. Consequently,
the level of assurance obtained in a limited assurance engagement is substantially lower
than the assurance that would have been obtained had a reasonable assurance engagement
been performed.
We believe that the evidence obtained is sufficient and appropriate to provide a basis for
our limited assurance conclusion.
Inherent limitations
As outlined on pages 97 to 98 and 102, GHG quantification is subject to inherent
uncertainty because of incomplete scientific knowledge used to determine emissions
factors and the values needed to combine emissions of different gases.
The board of directors is also responsible for the design, implementation, and maintenance
of internal control relevant to preparing the climate statement that is free from material
misstatement, whether due to fraud or error.
Our responsibilities
Section 461ZH of the Financial Markets Conduct Act 2013, requires the GHG disclosures
included in the Group’s Climate Statement to be the subject of an assurance engagement.
Aotearoa New Zealand Climate Standards 1
Climate-related disclosures, paragraph 25
requires such an assurance engagement at a minimum to be a limited assurance engagement,
and paragraph 26 specifies the scope of the assurance engagement on GHG disclosures.
To meet this responsibility, we planned and performed procedures (as summarised below),
to provide limited assurance in accordance with New Zealand Standard on Assurance
Engagements 1
Assurance Engagements over Greenhouse Gas Emissions Disclosures, and
International Standard on Assurance Engagements (NZ) 3410
Assurance Engagements
on Greenhouse Gas Statements, issued by the New Zealand Auditing and Assurance
Standards Board.
Summary of work performed
The procedures we performed were based on our professional judgement and included
enquiries, observation of processes performed, inspection of documents, analytical
procedures, evaluating the appropriateness of quantification methods and reporting
policies, and agreeing or reconciling with underlying records.
Given the circumstances of the engagement, in performing the procedures listed above:
• We obtained, through enquiries, an understanding of the Group’s control environment,
processes and information systems relevant to the preparation of the Scope 1, Scope 2
(location-based) and Scope 3 disclosures. We did not evaluate the design of particular
control activities or obtain evidence about their implementation.
A member firm of Ernst & Young Global Limited
Other information
The Integrated Report and Climate Statement within it contains information other than the
GHG disclosures and the assurance report thereon. The board of directors is responsible
for the other information.
Our assurance engagement does not extend to any other information included, or referred
to, in the Integrated Report on pages 1 to 93, 95 to 96 and 100 to 102, and therefore,
no conclusion is expressed thereon, apart from our opinion on the financial statements.
We read the other information identified above and, in doing so, consider whether the other
information is materially inconsistent with the GHG disclosures, or our knowledge obtained
in the assurance engagement, or otherwise appears to be materially misstated.
Where such an inconsistency or misstatement is identified, we are required to discuss it with
the board of directors and take appropriate action under the circumstances, to resolve the
matter. There are no inconsistencies or misstatements to report.
Independence and quality management
We complied with the Auditor-General’s independence and other ethical requirements,
which incorporate the requirements of Professional and Ethical Standard 1
International
Code of Ethics for Assurance Practitioners (including International Independence Standards)
(New Zealand)
(PES 1) issued by the New Zealand Auditing and Assurance Standards Board.
PES 1 is founded on the fundamental principles of integrity, objectivity, professional
competence and due care, confidentiality and professional behaviour. These principles
for example, do not permit us to be involved in the preparation of the current year’s GHG
information as doing so would compromise our independence.
We have also complied with the Auditor-General’s quality management requirements,
which incorporate the requirements of Professional and Ethical Standard 3
Quality
Management for Firms that Perform Audits or Reviews of Financial Statements, or Other
Assurance or Related Services Engagements
(PES 3) and Professional and Ethical Standard 4
Engagement Quality Reviews (PES 4) issued by the New Zealand Auditing and Assurance
Standards Board.
PES 3 requires our firm to design, implement and operate a system of quality management
including policies or procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory requirements. PES 4 deals with an
engagement quality reviewer’s appointment, eligibility, and responsibilities.
In addition to this engagement, we have carried out assignments in the areas of financial
statement audit, interim financial statements review, agreed upon procedures and other
assurance engagements which are compatible with the independence requirements.
Other than this engagement and these assignments, we have no relationship with or
interests in the Group or any of its subsidiaries.
Matthew Cowie
Ernst & Young Limited
On behalf of the Auditor-General
Auckland, New Zealand
18 August 2026
LEADERSHIP AND GOVERNANCE
MANA WHAKAHAERE
In this section we introduce our Board and Executive Leadership
Team, provide an overview of our governance framework,
and include a summary and link to our Corporate Governance
Statement. We outline our approach to remuneration and how
it supports the delivery of our strategy and long-term value.
We also cover our statutory, regulatory and security-holder
disclosures and provide supporting sustainability and
reference information.
Our Board of Directors and Executive Leadership Team
lead the organisation and give effect to our purpose, strategy
and objectives.
Our Corporate Governance Statement
provides details of our compliance with
the NZX Corporate Governance Code
during FY26, including any exceptions,
and outlines our governance framework
and practices.
Our Remuneration Report details the
remuneration structures, key performance
indicators, short and long-term incentives,
and our directors and executive
remuneration policies.
Our Workforce of the Future Policy delivers
on our commitment to attracting, retaining,
and developing talent that reflects the
communities we serve.
Our FY27 Group Scorecard aligns to our
strategy, with five KPIs to ensure alignment
and strong focus on the key things that will
create the most value.
READ MORE PG111READ MORE PG112
READ MORE PG118READ MORE PG114
READ MORE PG108
107MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
LEADERSHIP AND GOVERNANCE
SUSAN PETERSON
DIRECTOR
Tenure:
First appointed: 1 Sep 2022
Last elected: 19 Sep 2025
Key skills*: Commercial experience; large
organisation and cultural leadership; AI;
data and digitisation; retail and mass market
business leadership; risk governance; M&A
and capital structure.
ADRIAN LITTLEWOOD
DIRECTOR
Tenure:
First appointed: 1 Aug 2023
Last elected: 19 Sep 2023
Key skills*: Commercial experience; large
organisation and leadership experience; major
project investment; stakeholder relationships;
retail and mass market.
HANNAH HAMLING
DIRECTOR
Tenure:
First appointed: 1 Feb 2020
Last elected: 19 Sep 2023
Key skills*: Natural resource management
(including water and climate change); health
and safety; risk management; energy industry;
commercial experience.
SCOTT ST JOHN
CHAIR
Tenure:
First appointed: 1 Sep 2017 (Chair since Jan 2024)
Last elected: 19 Sep 2025
Key skills*: M&A and capital structure;
stakeholder relationships; commercial
experience; people leadership.
MARK BINNS
DIRECTOR
Tenure:
First appointed: 1 Sep 2023
Last elected: 19 Sep 2023
Key skills*: Energy industry; wholesale
markets trading; commercial experience;
major project investment.
ROB HAMILTON
DIRECTOR
Tenure:
First appointed: 1 Apr 2025
Last elected: 19 Sep 2025
Key skills*: M&A and capital structure;
investment analysis; audit and risk
management; commercial experience.
A A N P
P P
S S S A
S
YOUR BOARD OF DIRECTORS
P N N
A
RACHEL TAULELEI
DIRECTOR
Tenure:
First appointed: 20 Aug 2025
Last elected: 19 Sep 2025
Key skills*: Iwi and other stakeholder
relationships; commercial experience;
natural resource management (including
water and climate change); governance.
JASPER VAN HALDER
FUTURE DIRECTOR
Term: 1 Dec 2025 to 30 Nov 2026
Key skills*: Corporate transformation;
innovation and growth, venture
investment; legal and governance.
Committee Membership key:
Tenure key:
N
A
Nominations and Corporate
Governance Committee
P
S
People and Performance Committee
Safety and Enterprise Risk Committee
Audit and Financial Risk Committee
< 3 years
6
+
years
3-6 years
Chair of the committee
* Key skills are defined as the particular skills each director
brings to the Mercury Board, and which we consider in
our succession planning.
108MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
YOUR BOARD OF DIRECTORS CONT.
PAST DIRECTORS
JAMES MILLER
DIRECTOR
1
Tenure:
First appointed: 2 May 2012
Last elected: 22 Sep 2022
Key skills*: M&A and capital structure;
investment analysis; audit and risk
management; energy industry.
MIKE TAITOKO
DIRECTOR
2
Tenure:
First appointed: 28 Aug 2015
Last elected: 19 Sep 2024
Key skills*: Iwi and other stakeholder
relationships; natural resource management
(including water and climate change); digitisation.
LORRAINE WITTEN
DIRECTOR
3
Tenure:
First appointed: 1 Sep 2022
Last elected: 22 Sep 2022
Key skills*: Governance; commercial experience;
audit and risk management; innovation.
A N P
A
* Key skills are defined as the particular skills
each director brings to the Mercury Board, and
which we consider in our succession planning.
1
James Miller was a director of Mercury from
2 May 2012 to 19 September 2025.
2
Mike Taitoko was a director of Mercury from
28 August 2015 to 19 September 2025.
3
Lorraine Witten was a director of Mercury from
1 September 2022 to 15 September 2025.
KE Y BOAR D S TAT S
1
TENUREGENDERETHNICITY
KEY:
6+ years (28.57%)
3-6 years (14.29%)
< 3 years (57.14%)
KEY:
Female (42.86%)
Male (57.14%)
Gender diverse (0%)
KEY:
Māori (14.29%)
European/Other
(85.7 1%)
These charts provide a snapshot
of the Board's composition as at
30 June 2026.
Committee Membership key:
Tenure key:
N
A
Nominations and Corporate
Governance Committee
P
S
People and Performance Committee
Safety and Enterprise Risk Committee
Audit and Financial Risk Committee
< 3 years
6
+
years
3-6 years
Chair of the committee
1
As at 30 June 2026 Jasper Van Halder (Future Director) is not included in this data.
109MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
YOUR EXECUTIVE LEADERSHIP TEAM
The Executive Leadership Team leads our business to deliver on
strategy, ensuring we continue to succeed while also positioning
us for future opportunities and challenges. The team brings
MICHELE MAUGER
CHIEF PEOPLE OFFICER
SURAIYA PHILLIMORE-SMITH
CHIEF CUSTOMER OFFICER
STEW HAMILTON
CHIEF EXECUTIVE
KE VIN TAYLOR
CHIEF OPERATING OFFICER
– GENERATION
CATHERINE THOMPSON
CHIEF STRATEGY AND CORPORATE
AFFAIRS OFFICER
TIM THOMPSON
EXECUTIVE GENERAL MANAGER
– WHOLESALE
MATT TOLCHER
EXECUTIVE GENERAL MANAGER
– GENERATION DEVELOPMENT
RICHARD HOPKINS
CHIEF FINANCIAL OFFICER
enterprise-wide leadership capability, along with deep subject-
matter expertise. Together, they provide leadership for our people,
while guiding Mercury through a changing operating environment.
Craig Neustroski, formerly Chief Strategy and Transformation Officer, left Mercury in July 2026.
110MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
CORPORATE GOVERNANCE
Mercury’s full Corporate Governance Statement
is available on our website. The statement reports
against the NZX Corporate Governance Code dated
31 March 2026 and has been prepared in accordance
with NZX Listing Rule 3.8.1.
The Corporate Governance Statement explains how
Mercury complied with the NZX Corporate Governance
Code during FY26, and includes further information
about Mercury’s governance framework, Board and
Committee structure, governance policies, risk
management and assurance processes, and
shareholder engagement practices.
The Corporate Governance Statement is current as
at 30 June 2026 and was approved by the Board
of Mercury NZ Limited on 18 August 2026.
Mercury is listed on the NZX Main Board and has
an ASX foreign exempt listing. As a foreign exempt
listed entity, Mercury is primarily regulated by the
NZX Listing Rules. Mercury also has regard to
the ASX Corporate Governance Principles and
Recommendations where appropriate.
Mercury’s Annual Report and online Corporate
Governance Statement should be read together.
The NZX Corporate Governance Code Index (found
online in the Corporate Governance Statement)
identifies where Mercury’s disclosures against each
NZX Code recommendation can be found.
GOVERNANCE FRAMEWORK
Mercury’s governance framework supports effective
oversight, clear accountability, responsible decision-
making and transparent reporting to shareholders.
The Board is responsible for Mercury’s strategic
direction and overall governance, including oversight
of performance, risk, culture, financial and non-
financial reporting, and compliance with legal and
regulatory obligations. Management is responsible
for day-to-day operations and implementing the
strategy and policies approved by the Board.
The Board Charter and key governance policies are
available in the Corporate Governance section of
our website.
The Board also considered whether any matter could
materially influence, or could be perceived to materially
influence, each director's capacity to bring independent
judgement to decisions.
The Chair, Scott St John, is an independent,
non-executive director.
BOARD AND COMMITTEE STRUCTURES
The Board is responsible for Mercury’s strategic
direction and overall governance and has delegated
responsibility for day-to-day management to the
Chief Executive and the Executive Leadership Team.
The Board’s responsibilities are set out in its Charter.
The performance of the Board, its Committees, and
individual directors is regularly evaluated using a range
of methods including external review, questionnaires,
and Board discussion.
The Board has four standing Committees: the
Audit and Financial Risk Committee, the Safety
and Enterprise Risk Committee, the People and
Performance Committee, and the Nominations and
Corporate Governance Committee. Each committee
focuses on specific areas of governance. Together,
they strengthen the Board’s oversight of Mercury.
Each standing Committee operates under a written
charter approved by the Board. Each Committee is
required to confirm to the Board annually that it has
fulfilled the requirements of its Charter. The Board
and Committee Charters are available in the
Corporate Governance section of our website.
NZX CORPORATE GOVERNANCE CODE
During FY26, we followed the recommendations
in the NZX Corporate Governance Code, except
for Recommendation 3.3 as set out below.
Recommendation 3.3 - Remuneration Committee
Period: 1 July 2025 to 30 June 2026.
Reason: Mercury does not have a separate
remuneration committee. The Board has determined
that the governance of remuneration is appropriately
allocated between the People and Performance
Committee and the Nominations and Corporate
Governance Committee.
Alternative governance practice: The People and
Performance Committee oversee matters relating
to people, culture, and the remuneration and
performance of the Chief Executive and Executive
Leadership Team. The Nominations and Corporate
Governance Committee oversees matters relating
to director remuneration and Board composition.
The Board considers this allocation provides
appropriate oversight of remuneration matters having
regard to Mercury's Board and Committee structure.
Board approval: The alternative governance practice
has been approved by the Board. Further information
is included in the Board Committees section of the
online Corporate Governance Statement and the
Remuneration Report.
BOARD COMPOSITION AND INDEPENDENCE
As at 30 June 2026, Mercury’s Board comprised
seven non-executive directors: Scott St John, Mark
Binns, Rob Hamilton, Hannah Hamling, Adrian
Littlewood, Susan Peterson, and Rachel Taulelei.
Rob Hamilton and Rachel Taulelei were elected
by shareholders at the 2025 Annual Shareholders’
Meeting. James Miller, Mike Taitoko, and Lorraine
Witten ceased as directors in September 2025.
The Board has determined that, as at 30 June 2026,
all directors were Independent Directors for the
purposes of the NZX Listing Rules and the NZX
Corporate Governance Code. In making this
determination, the Board considered the NZX Listing
Rules, the factors in Table 2.4 of the NZX Corporate
Governance Code, each director’s interests, positions,
associations, relationships, and length of tenure.
Throughout FY26, no director determined by the
Board to be independent was subject to any of the
factors set out in Table 2.4, and the Board did not take
into account any conflict management arrangements
when determining director independence.
CONFLICTS AND DIRECTORS’ INTERESTS
Mercury maintains a directors’ interests register.
The register is reviewed at each Board meeting to
ensure it remains current and to identify any actual,
potential or perceived conflicts in relation to matters
before the Board.
Current directors’ interests, directors’ securities holdings
and other statutory disclosures are set out in the
Directors’ Disclosures section of the Annual Report.
DIRECTORS' SHAREHOLDINGS
Non-executive directors are encouraged, within three
years of the date the Non-executive Director
Remuneration Policy was first approved or three years
of their appointment (whichever is later), to purchase
and hold Mercury shares equivalent to the non-
executive director’s fixed annual base fee after tax.
Directors’ shareholdings are disclosed in the Directors’
Disclosures section.
GOVERNANCE POLICIES
Mercury’s key governance policies, including its
Code of Ethics (Mercury Code), are available on the
Corporate Governance section of our website. These
policies set expectations for ethical conduct and
compliance with legal and regulatory obligations.
ASSURANCE AND RISK MANAGEMENT
The Board oversees Mercury’s risk management
framework and material risks, supported by its Board
Committees. Further information is included in the
Corporate Governance Statement.
Climate-related risks are addressed in Mercury’s
Climate Statement.
111MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
WORKFORCE OF THE FUTURE
We are building a future-ready workforce grounded in inclusivity,
belonging, purpose, and performance.
Research shows that diverse perspectives drive
innovation, strengthen decision-making, and enhance
performance—this knowledge continues to underpin
our commitment to attracting, retaining, and
developing talent that reflects the communities
we serve.
Our Workforce of the Future Policy, available in the
Corporate Governance section of our website, guides
our approach, bringing together initiatives that engage
our people, build external partnerships, grow capability,
and support a diverse, inclusive, and belonging culture.
This work is guided by the following principles:
s Commitment to diversity: We value and actively
promote diversity at all levels of our organisation,
fostering an open and transparent culture.
s Holistic approach: We adopt a comprehensive
approach that integrates into every aspect of
the employee lifecycle.
s Inclusive work environment: We are dedicated to
creating a flexible, inclusive, and safe workplace
that embraces individual differences and
empowers everyone to reach their full potential.
s Leadership alignment: Our leadership is committed
to Workforce of the Future initiatives, and it is
demonstrated in their behaviours and decisions.
s Embracing diverse talent: We strive to attract,
retain, and grow a talented, diverse workforce
that represents Aotearoa New Zealand by
implementing an inclusive recruitment and
development strategy, allowing us to attract our
workforce talent from all areas of the community.
s Investment in people and communities: We invest
in people and communities to achieve equitable,
long-term outcomes, working in partnership across
our sector to do so.
s Respecting Te Ao Māori: Mercury has a unique
whakapapa and relationships with tāngata whenua.
We commit to empowering our kaimahi to engage
with Te Ao Māori confidently, and to evolve our
partnerships and ways of working to make
positive impacts.
In addition to our cultural recognition initiatives,
employee-led networks, and engagement and
education programmes, we are leveraging external
partnerships to help accelerate leadership
development, mentoring and talent pipelines for
underrepresented groups. External partnerships
include Global Women and Champions for Change
and WING (Women in Geothermal), promoting
advancement and visibility of women; Toi ki Tua,
focused on Māori talent pathways in the Bay of
Plenty, and TupuToa, focused on Māori and Pasifika
graduates entering the corporate workforce. We
actively participate in cross-sector initiatives to scale
our diversity efforts and drive industry-wide progress.
Our progress is governed by measurable objectives
set and reviewed by the Board, including specific
targets and industry benchmarks to ensure
transparency and accountability. Where appropriate,
we set aspirational goals to drive performance.
We maintain a zero-tolerance approach to harassment
and discrimination, guided by our comprehensive
Anti-Bullying, Harassment, Discrimination Policy,
Whistleblowing Policy and Domestic Violence
Free Policy.
Our key priority remains ensuring our workforce is
representative of New Zealand. This will be achieved
through focused actions to enhance our young
talent pathways, develop inclusive leaders, and
ensure our talent acquisition practices reflect our
long-term targets.
112MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
ObjectivesFuture years - targets
Gender
We have clear and simple targets for gender diversity
of 40:40:20 at all levels.
This means we aim for a minimum of 40% female
and 40% male, with the balance being any gender.
Pay equity
We ensure that everyone is rewarded fairly for their work.
Employee groupOur long-term targetsJune 2025 actuals (female/male)June 2026 actuals (female/male)
Gap to
2030
All employees40:40:20
51%49%51%49%
●
People leaders40:40:20
45%55%
49%51%
●
ELT40:40:20
25%75%
33%67%
●
Board40:40:20
33%67%
43%57%
●
Gender pay equityOur target is 100% +/- 5%97.5%96.8%
●
Gender pay equity weighted approachOur target is 100% +/- 5%99.9%99.8%
●
Ethnicity
Aligned to our goal of having clear and simple targets,
we have simplified long-term targets for ethnicity of
15:15:10. This means we aim for a minimum of 15% Māori,
15% Asian and 10% Pasifika at all levels (these are closely
aligned to our population demographics
and are minimums).
EthnicityOur long-term targetsJune 2025 actualsJune 2026 actuals
Māori
Employees
People leaders
15%
15%
7%
8%
7%
10%
●
●
Asian
Employees
People leaders
15%
15%
20%
10%
21%
10%
●
●
Pasifika
Employees
People leaders
10%
10%
4%
2%
4%
1%
●
●
Age
To ensure our business is diverse in a range of ways,
we monitor our age profile to check that we are aligned
to the national median.
The median age of the NZ workforce is 41 years (National Labour Force
projections, 2024). Benchmark against national median age of the
labour force in New Zealand National Labour Force projections.
42.242.8
●
WORKFORCE OF THE FUTURE CONT.
At 30 June 2026, the proportion of women on the ELT (who represent Mercury's Officers, including the Chief Executive) increased to 33%
or three out of nine (as at 30 June 2025 this was 25% or two out of eight). The proportion of women on the Board at balance date has
also increased, to 43%, or three out of seven (as at 30 June 2025 this was 33.3%, or three out of nine). No Directors
or ELT/Officers self-identify as gender diverse (also the case as at 30 June 2025).
In order to maintain consistency of measurement against our targets, we have adopted the Stats NZ prioritised ethnic groups. This involves
each person being allocated to a single ethnic group based on the groups they have identified with, which are, in order of personal priority:
Māori, Pacific, Asian and European/Other.
At 30 June 2026, our gender pay equity was 96.8% (as at 30 June 2025 this was 97.5%). Gender pay equity is calculated as the average
position in range (relative to the role's band midpoint) of female fixed remuneration compared with the average position in range of male
fixed remuneration. Our gender pay gap which compares the median hourly rate between males and females was 31.8% (as at 30 June
2025 this was 34.4%).
This year we have introduced an additional gender pay equity reporting measure to enhance insight on our standard approach. Standard
approach: compares the average position in range (PIR), relative to the role's band midpoint, of female fixed remuneration against the
average PIR of male fixed remuneration. At 30 June 2026, our gender pay equity was 96.8% (as at 30 June 2025 this was 97.5%).
New weighted approach: calculates pay equity for each remuneration band, weights each band's result by its share of total employees, then
sums these weighted results to produce one overall pay equity figure. Using the weighted approach, our FY26 gender pay equity result was
99.8% (as at 30 June 2025 this was 99.9%).
Pay equity by ethnicity compared to "other" ethnicity was Māori 97.67%, Asian 98.52% and Pasifika 94.95% (as at 30 June 2025
this was Māori 98.8%, Asian 98.2% and Pasifika 96.7%). The ethnicity pay gap which compares the median hourly rate between each
ethnicity and "other" ethnicity was Māori 20.41%, Asian 7.08% and 39.41% for Pasifika (as at 30 June 2025 this was Māori 25.4%,
Asian 9.1% and Pasifika 38.5%).
The Board believes that for this reporting period we have continued to make progress towards achieving our Workforce of the Future
objectives. However, the Board acknowledges the challenges associated with increasing people leader ethnicity diversity and remains
committed to the continued focus required.
113MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
Dear Shareholder
As Chair of the People and Performance
Committee (PPC), it is my pleasure to present
our Remuneration Report.
While Mercury continues to accelerate the building
and expansion of critical national infrastructure
to support New Zealand's electrification ambitions
for economic growth, we have remained focused
on ensuring that we can attract, retain, and develop
the high-performing workforce we need.
PERFORMANCE AND PAY
We are pleased with the strong operational and
financial outcomes achieved throughout the year.
As noted in the Annual Report, Mercury has delivered
a net profit after tax of $321 million, which represents
an increase of $320 million from last year. EBITDAF
was $1,068 million, an increase of $282 million from
last year, reflecting disciplined investment, effective
cost management, the strength of Mercury’s
integrated portfolio, and the commitment and
capability of our people.
Operating costs were $370 million, a reduction of
$26 million from last year. The lower costs primarily
reflect lower employee costs following operating-
model changes and the completion of major
generation maintenance programmes.
The remuneration outcome of our short-term
incentive (STI) for the year reflected strong
performance against our Group Scorecard targets.
The Group Scorecard outcome was assessed at
125% of target (78.1% of maximum opportunity).
The Chief Executive’s individual performance
assessment resulted in an award of 125% of his
STI target opportunity.
The remuneration outcome for the FY24-FY26 long-
term incentive (LTI) was assessed at 34.5%. The
absolute total shareholder return (TSR) performance
hurdle was not met, resulting in zero vesting for this
component, while 69% was achieved for the Relative
TSR component based on performance against the
REMUNERATION REPORT
disclosed peer group. The Board did not consider
it appropriate to exercise any discretion in respect of
the STI and LTI outcomes. More detailed information
on the STI and LTI outcomes for both the Chief
Executive and Chief Financial Officer can be found
on pages 117-122.
LEADERSHIP APPOINTMENTS
In the past year we were delighted to welcome
three new executives, Catherine Thompson as Chief
Strategy and Corporate Affairs Officer, Michele Mauger
as Chief People Officer, and Suraiya Phillimore-Smith
as Chief Customer Officer. Each of these leaders
brings extensive experience and capability to our
executive team.
We also farewelled Fiona Smith as our Chief People
Experience Officer. We warmly thank Fiona for her
leadership and commitment to the success of
Mercury and extend our very best wishes to her
for the next chapter of her career.
EXECUTIVE REMUNERATION REVIEW
AND CHANGES
Over the last 18 months, the Committee undertook
an independent review of our executive remuneration
structure and how it might more effectively support
the successful delivery of the strategy. The Committee
was motivated to ensure that there was a tighter
connection between pay and performance. As part
of that review, Scott and I engaged with some of our
investors and stakeholders, including the New Zealand
Shareholders' Association, to listen to their thoughts.
We want to thank those involved for the time they
gave us during this process. Their feedback helped
to shape our new executive remuneration structure.
As a result of the review, the executive STI structure
was adjusted away from awarding the STI all in cash,
to instead awarding part in cash and part in equity
that is deferred for one year. This new structure is
intended to better incentivise performance over time
and to provide an opportunity for executives to be
more closely aligned to the interests of shareholders.
In addition, the executive remuneration structure
has been rebalanced to increase the proportion of
performance pay by increasing their LTI opportunity
as a percentage of base pay. For the Chief Executive,
this has resulted in his LTI opportunity increasing from
40% to 60% of his base salary. While the performance
period of the LTI remains three years and the LTI
performance metrics are unchanged, the peer group
was expanded to 11 industry relevant companies from
across Australasia. We introduced a one-year hold
period to align the LTI timeframe with the delivery
of Mercury’s 2030 strategy.
The Committee has reviewed and simplified our
FY26 Group Scorecard to reduce the number of key
performance indicators (KPIs) to align with Mercury’s
five strategic priorities. We also introduced an
Executive Minimum Shareholding Policy, whereby
the Chief Executive and Chief Financial Officer are
required to accumulate and maintain a holding in
Mercury shares equivalent to at least 50% of their
annual base remuneration (before tax) within a
five-year period.
The cumulative effect of these changes is that a
greater proportion of an executive’s total reward
depends on the delivery of sustained shareholder
value, further strengthening the alignment
between executive reward and performance.
More details of the Executive Minimum
Shareholding Policy and all the changes to the
executive remuneration structure and KPIs are
included in the Remuneration Report.
PAY EQUITY
As part of our ongoing commitment to a fair and
equitable workplace we completed our annual
review of gender pay equity. This review resulted in
related compensation increases for approximately
36 employees.
We have also included an additional weighted pay
equity measure. We believe that the addition of this
measure provides greater insight into our progress.
EMPLOYEE SHARE SCHEME AND ENERGY/
TELCO BENEFITS
We are pleased to have announced our new Employee
Share Scheme and an enhanced employee product and
service offering. These initiatives will enable everyone
at Mercury to experience first-hand what it is like to be
both a Mercury shareholder and a Mercury customer.
We believe that these changes will strengthen our team’s
collective commitment to delivering outstanding
shareholder and customer outcomes.
DIRECTORS’ FEES
The setting of the Chair, Director and Board Committee
fees is governed by Mercury's Non-Executive Director
Remuneration Policy which is reviewed periodically to
ensure it remains appropriate. There were no changes
to Director remuneration during FY26. It has been three
years since we last reviewed Director remuneration and
we will look to do this in FY27. More detail can be
found on page 123 of this report.
NOTE OF APPRECIATION
On behalf of all my colleagues on the Committee, I
would like to warmly thank our team for their dedication,
commitment, and support over the course of the year.
It has been a successful year and their ongoing support
is greatly appreciated. We are looking forward to an
exciting year ahead.
SUSAN PETERSON
CHAIR, PEOPLE AND PERFORMANCE COMMITTEE
114MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
The Board did not apply discretion to the FY26 STI
or FY24-26 LTI outcomes. All outcomes reflect the
performance results of the FY26 STI Group Scorecard
and the FY24-26 LTI plan.
CHANGE IN CONTROL
In a change of control situation, the Board has
discretion to adjust the terms of grants or unvested
share rights under the LTI and STI schemes. This may
include adjusting eligibility criteria or performance
conditions, or permitting early exercise of share rights.
EXECUTIVE REMUNERATION POLICY
Mercury’s current Executive Remuneration Policy is
available on our website. We are reviewing this Policy
and the updated Policy will be available on our website
once the review has been completed.
Mercury’s new Executive Remuneration Framework
is intended to support the outcomes in the adjacent
table through a set of guiding principles.
EXTERNAL AND INDEPENDENT ADVICE
In FY26, Mercury obtained independent external
advice from PricewaterhouseCoopers (PwC) to
support its comprehensive executive remuneration
review, which commenced in FY25.
PwC also provided independent executive
benchmarking data, calculated LTI volume-weighted
average share prices to support grant date allocations
and vesting outcomes, and independently assessed LTI
performance outcomes against the relevant measures.
This Remuneration Report discloses employees who
received remuneration and other benefits, in their
capacity as employees, which was or exceeded
$100,000 per annum, in brackets of $10,000, as
required by the Companies Act 1993. This can be
found on page 122.
Mercury’s Board is committed to an Executive
Remuneration Framework that supports a high-
performance culture, aligns executive reward with
Mercury's strategy, and creates sustainable value
for our shareholders. The Board is committed to
transparency in its Executive Remuneration Policy
and practice.
The PPC assists the Board in fulfilling its
responsibilities relating to Mercury’s People strategy,
policies and practices, and the remuneration and
performance plan of the Chief Executive and
Executive Leadership Team (ELT). More on PPC’s
responsibilities and members of the Committee is
available in the ‘Board Committees’ section of our
Corporate Governance Statement. The PPC operates
under a written charter, available on our website.
The PPC reviews annual performance outcomes
for all ELT members and recommends these to
the Board for approval. Reviews take into account
external benchmarking against comparable market
peers, along with each individual’s performance,
skills, expertise, and experience.
USE OF DISCRETION
The Board retains absolute discretion in the
assessment of performance-based remuneration,
including whether STI and LTI performance hurdles
have been met.
It reviews outcomes in the context of the full
year, considering any factors that affected results,
and may apply specific adjustments in its final
assessment. This includes malus and clawback
provisions, allowing the Board to reduce or
extinguish STI or LTI outcomes if an adverse
event occurs.
The Board also retains absolute discretion over
how variable remuneration is treated when
employment ends.
EXECUTIVE REMUNERATION
EXECUTIVE REMUNERATION GOVERNANCE
REMUNERATION BENCHMARKING
PwC provided Mercury with benchmark remuneration
data from a core comparator group of Australasian
listed companies. This group reflects companies of
comparable scale, complexity, and/or industry to
Mercury, includes Australasian energy, utility, and
retail-focused companies.
The peer group include: AGL Energy, APA
Group, Auckland International Airport, Channel
Infrastructure, Chorus, Contact Energy, Genesis
Energy, Meridian Energy, Origin Energy, Spark,
and Vector. PwC matched each Mercury executive
role to comparator roles with broadly similar
accountabilities. PwC also provided benchmarking
data from other selected NZX companies to ensure
broad alignment.
• Attract and retain high quality talent by offering packages benchmarked
against a market peer group of companies.
• Attract international, low cost of capital investors.
• Align performance of management with delivery of long-term
sustainable shareholder value.
• Align behaviours of management with shareholder goals and risk appetite.
• Motivate delivery of successful outcomes by linking the quantum
of reward with the quantum of business performance outcomes
as measured by shareholder value.
• Fairly distribute and reward performance, based on the relative influence
of the individual on the business outcomes and the impact on our ability
to fund the reward.
• Create transparency and clarity of expectation through the selection
of a focused set of targets.
PRINCIPLEDESIRED OUTCOME
Competitive
Aligned
Reward Performance
Fair and Flexible
Simplicity
115MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
EXECUTIVE REMUNERATION CONT.
EXECUTIVE REMUNERATION COMPONENTS
Total remuneration for ELT members has three
components: fixed remuneration, short-term
incentive, and long-term incentive. Mercury’s
philosophy is to align pay with performance and
shareholder interests.
SHORT-TERM PERFORMANCE INCENTIVE
The STI is a variable, at-risk incentive that rewards
executives for individual performance and delivery
against the Group Scorecard for the financial year.
Each ELT member’s STI target is set annually as a
percentage of base salary. In FY26, the target was
50% for the Chief Executive and Chief Financial
Officer (CFO), and 40% for other ELT members.
STI outcomes are determined against two
performance measures: 70% is based on the
Group Scorecard, which reflects Mercury’s strategic
priorities for the financial year and aligns ELT focus
with delivering them. The remaining 30% is based
on individual performance. The Board retains
absolute discretion in assessing performance
and determining STI outcomes.
Consistent with Mercury’s pay for performance
philosophy, the minimum STI opportunity is 0%, the
target is 100% and the maximum is 160%. For FY26,
no STI payment would be made if there was a fatality
or the normalised hydrology/wind adjusted EBITDAF
did not reach 80% of the EBITDAF target. For FY27,
no STI payment will be made if there is a permanent
disabling injury or a fatality or the normalised
hydrology/wind adjusted EBITDAF does not reach
80% of the EBITDAF target.
The Executive STI plan was updated in FY26 as part
of the executive remuneration review to include a
deferred equity component. From FY26, executive STI
awards consist of a cash component and a deferred
equity component. 70% of the Chief Executive’s and
CFO’s STI performance outcome is awarded in cash,
and 30% is awarded in share rights.
FIXED REMUNERATIONSHORT-TERM INCENTIVELONG-TERM INCENTIVE
PURPOSE
Attract and retain Executives
with the experience and leadership capability required
to deliver our strategy.
To motivate and reward performance against the
Group Scorecard together with individual performance
over the financial year.
Equity opportunity in the form of Performance
Share Rights to incentivise and reward the
delivery of long-term shareholder value.
FY26 APPROACH
Fixed remuneration consists of base salary and
benefits including insurance, KiwiSaver, and vehicle
as applicable.
Rewarding performance with cash incentives
and deferred share rights (equity component).
Performance assessed against a Group Scorecard
based on business priorities for the next 12 months
and against individual performance.
Following performance assessment, the STI
outcome is split into (1) Cash component and
(2) Equity component. The equity component
is subject to a one-year deferral period.
Performance measured by total shareholder return
against (1) relative TSR: a peer group and (2)
absolute TSR: the cost of equity plus 1%, in each
case over the three-year performance period.
The performance outcome is then held for a
further one-year period before the share rights
vest to align Executives to the FY30 strategy.
STI TARGETDESCRIPTIONPERFORMANCE MEASURES
50% of base salary• 70% cash component
• 30% equity component (deferred share rights)
• 70% based on FY26 Group Scorecard
• 30% based on individual performance
For all other Executives, 75% of their STI outcome is
awarded in cash and 25% is awarded in share rights.
STI share rights are deferred for one year, after which
they convert to ordinary shares, subject to Board
discretion. STI awards are subject to good conduct,
malus and claw back provisions and the Board retains
absolute discretion over all elements of the STI plan.
ELT members are responsible for all tax obligations
on any shares received.
Breakdown of Chief Executive’s and CFO's FY26 STI
Executive Remuneration Components
116MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
• Stretch target achieved.
• Perceived confidence lifted 6% from baseline of 44% to 50%.
• OUTCOME 160% of target; 100% of maximum.
In determining the overall outcome, the Board
considered performance across the full scorecard
and all relevant factors for the year. These
considerations are reflected in the final assessment.
The Board did not exercise discretion in determining
the FY26 Group Scorecard outcome.
GOALWEIGHTINGKPISKPI TARGE T SKPI OUTCOME
Financial growth50%
Deliver more reliable
and renewable energy
20%
10%
10%
10%
Accelerate shift to
low-carbon future
Rebuild sector and
customer confidence
Our people
FY26 Group Scorecard
• Threshold: $921.5m
• Target: $950 m
• Stretch: $997.5m
• EBITDAF Stretch target achieved. EBITDAF of $1,057m achieved and
exceeded Stretch target of $997.5m by $59.5m.
• OUTCOME 160% of target; 100% of maximum.
• Threshold: +3%
• Target: OPEX $370m and Stay in Business (SIB) CAPEX $150m
• Stretch: -5%
• TOTEX Target achieved. OPEX of $370m and $150m SIB CAPEX
achieved and landed right on target.
• OUTCOME 100% of target; 62.5% of maximum.
• Threshold: 2 of 3 on plan (KWK, KD2, OEC5) (safety, budget, programme)
• Target: + additional 1 FID reached to support system reliability
• Stretch: + strategy to deliver 1.5TWh/year of additional
geothermal generation by 2035 endorsed by the board
• Threshold target achieved and exceeded. 3 out of 3 Threshold target
projects on plan with target landing top end of the threshold.
• FID Target not met.
• Stretch target achieved. Strategy to deliver additional geothermal
generation endorsed by the Board.
• OUTCOME 90% of target; 56.3% of maximum.
• Threshold: 13,000 (16,000 annualised) tonnes CO
2
e of Scope 1
emissions reinjected
• Target: Increase portfolio firming and flexibility by 40MW
• Stretch: + Memorandum of Understanding in place for 0.5 PJ of
biogas development and 1TWh of new demand or electrification
opportunities identified
• Threshold, Target and Stretch targets achieved.
• CO
2
e outcome of 13,490 tonnes achieved against Threshold target
of 13,000.
• Greater than 50MW achieved against Target of 40MW.
• Stretch target achieved.
• OUTCOME 160% of target; 100% of maximum.
• Threshold: Maintain baseline (+/- margin of error)
• Target: Improve baseline of 44% by 2%
• Stretch: 5% lift in baseline over 12 months
• Threshold: Total recordable injury frequency rate (TRIFR) less than 0.5
• Target: Culture Performance Index at target of 70%
• Stretch: Culture Performance Index increase by 5%
• TRIFR Threshold target of less than 0.5 was exceeded with a TRIFR
outcome of 0.31 achieved.
• Culture Performance outcome was 73%. Target of 70% met but Stretch
target of 75% not met.
• OUTCOME 100% of target; 62.5% of maximum.
Safety and culture
performance
6
Perceived confidence in the
sector’s ability to meet NZ’s
energy transition needs
5
CO
2
e emissions, firming
and demand capacity from
electricity and energy system
4
Delivery of generation
development projects
3
TOTEX (OPEX + Stay in
Business CAPEX) (worth 25%)
2
EBITDAF
1
(wor th 25%)
1
EXECUTIVE REMUNERATION CONT.
FY26 STI GROUP SCORECARD OUTCOMES
KPIs aligned with Mercury’s strategy were selected
for the FY26 Group Scorecard and weighted to reflect
their relative importance. Performance was assessed
against three levels: Threshold (50%), Target (100%)
and Stretch (160%). Following consideration of
performance against each KPI, the Board approved
an overall FY26 Group Scorecard outcome of 125% of
target, equivalent to 78.1% of the maximum opportunity.
The Board determined that Stretch performance was
achieved for KPIs 1, 4 and 5, while Target performance
was achieved for KPIs 2 and 6, as outlined in the table
below. For the Delivery of Generation Development
Projects KPI, performance was assessed at 90% of
Target. All three projects within this KPI progressed
to plan, supporting an assessment at the upper
end of Threshold performance. However, the Final
Investment Decision (FID) target was not achieved.
While the Stretch target for perceived sector confidence
was achieved, the Board acknowledged the importance
of maintaining a continued focus on strengthening
market confidence.
1
EBITDAF normalised for positive and negative annual variations in hydrology and wind. For FY26, normalised EBITDAF was $1,057 million.
117MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
FY27 GROUP SCORECARD
The FY27 Group Scorecard is aligned with Mercury’s
strategy and comprises five key performance
indicators (KPIs), providing clear focus on the
priorities expected to deliver the greatest value.
Each KPI has defined Threshold, Target and Stretch
performance levels, corresponding to 50%, 100%
and 160% achievement respectively, with weightings
reflecting the relative value and importance of
each measure.
STI outcomes may range from 0% to 160%, depending
on performance against the Group Scorecard.
No STI payment will be made where there has been
a permanent disabling injury or fatality, or where
normalised hydrology/wind adjusted EBITDAF is less
than 80% of target.
The Board retains absolute discretion over STI
outcomes to ensure that final payments appropriately
reflect performance over the relevant financial year.
The maintenance of good conduct together with
malus and clawback provisions apply.
EXECUTIVE REMUNERATION CONT.
GOALWEIGHTINGKPISKPI TARGE T S
10%
20%
50%
10%
10%
Rebuild sector confidence
Deliver more reliable
and renewable energy
and Accelerate shift
to low-carbon future
Financial growth
Safety
Our people
FY27 Group Scorecard
EBITDAF
2
• Threshold: -3% from Target
• Target: $1,080m
• Stretch: +5% from Target
• Threshold: Deliver FY27 growth CAPEX projects to plan
• Target: Achieve a major milestone on a keystone
growth project
• Stretch: 1TWh of new demand or electrification
opportunities identified
• Threshold: Maintain baseline target of 50%
• Target: Score shifts >2% from baseline
• Stretch: Score shifts >5% from baseline
• Threshold: <0.6
• Target: <0.4
• Stretch: <0.3
• Threshold: WEI shifts no more than -3% from baseline
• Target: WEI baseline maintained
• Stretch: WEI shift >5% from baseline
Advancing the Plan to 3.5TWh of new
renewable energy production by 2030
Perceived confidence in the sector's
ability to meet NZ's energy transition
need (Talbot Mills' survey)
Total recordable injury
frequency rate (TRIFR)
Culture Amp Workplace
Engagement Index (WEI)
1
2
3
4
5
2
EBITDAF normalised for positive and negative annual variations in hydrology and wind.
118MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
LONG-TERM PERFORMANCE INCENTIVES
LTIs give the ELT an equity opportunity designed
to incentivise the delivery of shareholder value.
Under the LTI plan, Performance Share Rights are
granted annually with performance measured over
three years. The LTI plan is dividend protected, and
ELT members are granted a number of Performance
Share Rights determined by dividing the grant’s
face value by the value of one Mercury share at
the grant’s commencement date.
Subject to meeting performance hurdles, each
Performance Share Right converts to one ordinary
share at vesting. The LTI outcome is capped at
100%, though ELT members may also receive
additional shares representing dividends paid over
the vesting period. ELT members are responsible
for all personal tax obligations on shares received.
The Board retains absolute discretion over the final
LTI outcome, allowing appropriate adjustments where
unanticipated circumstances positively or negatively
impact performance over the three-year period.
As part of the Executive remuneration construct
review, a new LTI plan was introduced. The first grant
under this new LTI plan is the FY26-FY28 LTI grant,
TranchePerformance hurdles for FY26-FY28 LTI grant
Tranche 150% of the grant is based on Mercury’s TSR relative to the performance of an
industry peer group comprising AGL Energy, APA Group, Auckland International
Airport, Channel Infrastructure, Chorus, Contact Energy, Genesis Energy, Meridian
Energy, Origin Energy, Spark and Vector. There is no positive TSR performance
gate on this tranche but Mercury’s TSR must be at the 50th percentile of
the comparator group for any award to be made on this component.
Tranche 250% of the grant is based on Mercury’s absolute TSR against the
company’s cost of equity over the vesting period, plus 1%.
EXECUTIVE REMUNERATION CONT.
which commenced on 1 July 2025. Performance
Share Rights continue to be granted annually with
performance measured over three years but are now
subject to a one-year hold period before any shares
vest and are issued. The Tranche 1 peer group was
also expanded to an industry peer group of 11
companies from across Australasia.
Our prior peer group, which is still applicable to
FY24-FY26 and FY25-FY27 LTI grants, consists of
Contact Energy, Meridian Energy, Genesis Energy,
and Manawa Energy. With Manawa Energy ceasing
to trade and delisted on 7 July 2025, it could no
longer be included in our peer group and
performance hurdle for the relative tranche.
For the FY26-FY28 LTI grant commencing 1 July
2025, the value represented 60% of the Chief
Executive's base salary and 40% of base salary
for the CFO and other ELT members.
119MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
Chief ExecutiveTotal remuneration paid
$
8
Percentage
STI against
maximum
%
Percentage
vested LTI
against
maximum
%
Span of LTI
performance
period
Stew HamiltonFY262,163,44378.134.52023 – 2026
FY251,629,67058.9
9
02022 – 2025
Vince Hawksworth
(departed)
FY251,238,906002022 - 2025
F Y242,581,47960352021 – 2024
FY233,846,111811002020 – 2023
FY222,072,44377Not eligibleNot eligible
8
Total remuneration paid including salary, benefits, STI and LTI payments.
9
For FY25, Stew Hamilton's STI includes a combined assessment against the maximum he could achieve for the two months that he was in
the Executive GM Generation role and ten months in the Chief Executive role.
EXECUTIVE REMUNERATION CONT.
Five-year summary – Chief Executive’s remuneration
DescriptionPerformance measuresPercentage achieved
by Stew Hamilton
STI
10
Set at 50% of base salary.
Based on a combination of
key financial and non-financial
performance measures
70% Cash component/30% Equity
component (deferred share rights)
70% based on the company shared
goals (weighted 10-50%)
125%
30% based on individual measures125%
LTI
11
FY24-FY26 grant set at
25% of base salary.
Share rights issued at 25 September
2023 with value of $127,000.
Volume weighted average
price (VWAP)
12
of $6.4895.
50% relative TSR performance against
industry peer group – Contact Energy,
Meridian Energy, and Genesis Energy
69%
50% absolute TSR against the
company’s cost of equity over
the vesting period, plus 1%
0%
Breakdown of Chief Executive’s pay for performance (FY26)
10
The above STI percentages achieved by Stew Hamilton is the percentage STI against target. The percentage achieved by Stew Hamilton
against the maximum STI percentage of 160% for both measures is 78.1%. The above STI cash component for FY26 will be paid in FY27
and the STI equity component will be issued to Stew Hamilton in share rights in FY27.
11
The above LTI outcome for FY24-FY26 was assessed as 34.5%. The associated vested share rights will be issued in shares to Stew Hamilton
in F Y27.
12
The volume weighted average price calculated across the 10 trading days from the Commencement Date of 1 July 2023.
KEY TERMS OF CHIEF EXECUTIVE’S EMPLOYMENT AGREEMENT
ItemIndividual conditions
Employment agreementOngoing individual employment agreement
Base salarySubject to annual review
Performance payEligible to participate in Mercury’s STI and LTI schemes
Notice periodSix months' notice
Termination of employment Six months' notice
Post employment restraint of tradeSix months
CHIEF EXECUTIVE’S REMUNERATION
Chief Executive’s remuneration (FY25 and FY26)
Chief ExecutiveSalary
3
$
Benefits
4
$
Subtotal
$
Pay for performance
$
Total
remuneration
$
STI
(Cash)
STI
(Equity
$ Value)
LTISubtotal
Stew Hamilton
FY261,276,56861,8101,338,378546,875234,375
5
43,815
6
825,0652,163,443
FY251,129,18044,3841,173,564456,106N/A0
7
456,106 1,629,670
Vince Hawksworth
(departed)
FY251,172,25866,6481,238,9060N/A0
7
01,238,906
3
Actual salary paid includes holiday pay paid as per NZ legislation. The base salary for Stew Hamilton for FY26 was $1,100,000 for the period
1 July 2025 to 31 August 2025 and $1,250,000 from 1 September 2025. The base salary for Stew Hamilton for FY25 in the Chief Executive
role was $1,100,000. Stew Hamilton started in the Chief Executive role from 31 August 2024. The base salary for Vince Hawksworth for
FY25 was $1,349,460. FY25 actual salary for Vince Hawksworth includes approximately four months’ notice in lieu paid out on termination
as agreed by the Board. As part of ensuring a smooth Chief Executive transition process, Vince agreed to be available during this
four-month period as required.
4
Benefits include KiwiSaver and insurance.
5
The FY26 STI equity value relates to the value of the STI deferred share rights that will be issued to Stew Hamilton for the FY26
performance year.
6
The FY26 LTI value relates to the grant for the FY24–FY26 performance period ending 30 June 2026. Performance against the LTI measures
for FY24-FY26 was assessed as 34.5%. The value shown is the total value of 34.5% of the share rights issued to Stew Hamilton at the time
of the grant on 25 September 2023. 34.5% of the share rights for the FY24-FY26 grant will transfer to Stew Hamilton after this integrated
report is published. The market value of the vested share rights will be calculated at transfer date and will be reported in our FY27
integrated report.
7
The FY25 LTI value relates to the grant for the FY23–FY25 performance period ending 30 June 2025. Performance against the LTI measures
for FY23–FY25 was assessed as 0%. No share rights transferred to Stew Hamilton or Vince Hawksworth for the FY23-FY25 grant.
120MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
Gentailer PeersAll Peers
KEY:
MCY
-15
-10
-5
0
5
10
15
20
30 Jun
2026
30 Jun
2025
30 Jun
2024
30 Jun
2023
30 Jun
2022
EXECUTIVE REMUNERATION CONT.
KIWISAVER
The Chief Executive is a member of KiwiSaver.
As a member of this scheme, the Chief Executive
is eligible to contribute and receive a company
contribution of 3.5% of gross taxable earnings.
For FY26, the company’s KiwiSaver contribution
for Stew Hamilton was $53,687.
FY27 CHIEF EXECUTIVE’S
REMUNERATION REVIEW
The FY27 remuneration package for the Chief
Executive is shown in the following graph.
FIVE-YEAR SUMMARY – TSR PERFORMANCE (COMPANY VS PEER GROUPS
17
)FY27 FIXED VS PERFORMANCE PAY FOR CHIEF EXECUTIVE
LTI
13
Performance periodGrant
year
Share rights
issued date
Number of share
rights issued
on grant
Value of share
rights on grant
date $
14
Number of
share rights
vested including
dividend shares
15
Value of shares on
transfer date
$
16
Share transfer
date
FY22-FY241 July 2021 to 30
June 2024
FY229 September 202117,723118,74 46,99046,30922 August 2024
FY23-FY251 July 2022 to
30 June 2025
FY2316 September
2022
21,194122,24700Not applicable
FY24-FY261 July 2023 to
30 June 2026
F Y2425 September
2023
19,570127,0007,7 14To be determined
on transfer date
August 2026
FY25-FY271 July 2024 to
30 June 2027
FY2522 October 202469,730439,996To be determined
after vesting date
To be determined
on transfer date
August 2027
FY26-FY281 July 2025 to
30 June 2028
FY2616 April 2026122,149749,995To be determined
after vesting date
To be determined
on transfer date
August 2029
FY27-FY291 July 2026 to
30 June 2029
FY27To be determined
on issue
To be determined
on issue
To be determined
on issue
To be determined
after vesting date
To be determined
on transfer date
August 2030
Chief Executive’s long-term performance incentives
13
This table includes the LTI grants made to Stew Hamilton both
during and prior to his appointment as Chief Executive. The grant
for the FY27-29 LTI will be made during the course of FY27. Details
will be included in the FY27 Remuneration Report.
14
The value of share rights on the grant date is calculated using
the volume weighted average price of Mercury shares over the
10 trading days from the commencement date of the grant.
15
Vesting is subject to the performance hurdles being met. See page
119 for the performance hurdles.
16
The value of share rights on the transfer date is calculated using
the number of vested share rights including dividend shares
multiplied by the volume weighted average price of Mercury shares
over the 5 days prior to the share transfer date.
17
The "Gentailer Peers" group applies to LTI grants prior to FY26 and consists of Contact Energy,
Meridian Energy and Genesis Energy. The "All Peers" group applies to LTI grants made from FY26
and consists of AGL Energy, APA Group, Auckland International Airport, Channel Infrastructure,
Chorus, Contact Energy, Genesis Energy, Meridian Energy, Origin Energy, Spark and Vector.
0.5
0
1.0
1.5
($millions)
2.0
2.5
3.0
3.5
FixedTargetMaximum
Annual variable
with performance
hurdles
Long-term incentives
performance pay
granted (2030 vesting)
Fixed payPerformance pay
KEY:
Base salary
and benefits
121MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
CHIEF FINANCIAL OFFICER’S FY26 REMUNERATION
Richard Hopkins' FY26 STI was set at 50% of base salary. 70% of Richard Hopkins' STI is based on performance
against the Group Scorecard and 30% based on individual performance. The percentage outcome achieved
for Richard Hopkins for the FY26 STI was 125% on the Group Scorecard and 125% on the individual measures.
70% of Richard Hopkins' performance outcome will be awarded in cash and 30% will be awarded in share rights.
Chief
Financial
Officer
Salary
18
$
Benefits
19
$
Subtotal
$
Pay for performance
20
$
Total
remuneration
$
STI
(cash)
STI
(equity
$ value)
LTISubtotal
Richard
Hopkins
712,38732,20374 4,589
306,250131,250N/A437,500
1,182,089
William Meek
21
(departed)
125,743125,743
125,743
18
Actual salary paid includes holiday pay paid as per NZ legislation.
19
Benefits for Richard Hopkins include KiwiSaver and insurance. The company's KiwiSaver contribution for Richard Hopkins was $28,018.
20
The STI cash component for Richard Hopkins relates to FY26, but paid in FY27. The FY26 STI Equity value relates to the value of the STI
deferred share rights that will be issued to Richard Hopkins for the FY26 performance year.
21
William Meek, Mercury's former CFO, departed Mercury on 31 March 2025. The FY26 LTI value relates to the grant for the FY24–FY26
performance period ending 30 June 2026. Performance against the LTI measures for FY24-FY26 was assessed as 34.5%. The value shown
is the total value of 34.5% of the share rights issued to William Meek at the time of the grant on 25 September 2023. 34.5% of the share rights
for the FY24-FY26 grant will transfer to William Meek after this integrated report is published. The market value of the vested share rights
will be calculated at transfer date.
SHARE OWNERSHIP
The Chief Executive's and CFO's ownership of Mercury shares as at 30 June 2026 are:
ExecutiveNumber of shares owned (excludes
shares held in trust for the LTI scheme)
Change in shares owned since
30 June 2025
Chief Executive – Stew Hamilton
22
11,989.28 +4,166.28
CFO – Richard Hopkins
30,900
+30,900
22
Stew Hamilton's shares include shares held in both a personal capacity and held by a custodian.
MANDATORY EXECUTIVE MINIMUM SHAREHOLDING
In FY26, we introduced an Executive Minimum Shareholding Policy. Under this new policy approved
by the Board in December 2025, Chief Executive Stew Hamilton and CFO Richard Hopkins are required
to accumulate and maintain a holding in Mercury shares that is equivalent to at least 50% of their annual
base remuneration before tax. They are required to achieve the minimum shareholding by the later of:
the 5th anniversary of the date this policy was first approved (five years from December 2025) and the
5th anniversary of their appointment to the ELT. Both Stew Hamilton and Richard Hopkins currently
meet these new minimum shareholding requirements. This policy is available to view on our website.
Remuneration
band $
24
Currently
employed
No longer
employed
Total
100,000-110,00071677
110,001-120,00052658
120,001-130,00078886
130,001-140,00090494
140,001-150,000651277
150,001-160,00047855
160,001-170,00043346
170,001-180,00053659
180,001-190,00019120
190,001-200,00023225
200,001-210,00016319
210,001-220,00014115
220,001-230,0009110
230,001-240,00013-13
240,001-250,00011-11
250,001-260,000617
260,001-270,000617
270,001-280,00010-10
280,001-290,0003-3
290,001-300,0006-6
300,001-310,000314
Remuneration
band $
24
Currently
employed
No longer
employed
Total
310,001-320,0001-1
320,001-330,0006-6
330,001-340,000213
340,001-350,0002-2
350,001-360,0001-1
360,001-370,0002-2
370,001-380,0001-1
380,001-390,0003-3
390,001-400,000 -11
410,001-420,0002-2
480,001-490,0001-1
490,001-500,0001-1
520,001-530,0002-2
530,001-540,0001-1
760,001-770,0001-1
920,001-930,000 -11
930,001-940,0001-1
940,001-950,0001-1
1,790,001-1,800,0001-1
Total66767734
EMPLOYEE REMUNERATION
During FY26, the company paid remuneration
23
in excess of $100,000 including benefits to 734 employees
(not including directors) in the following remuneration bands:
TOTAL REMUNERATION RATIO
The total remuneration ratio for FY26 between employee (median) and Chief
Executive was 1:23. This is based on, for employees, actual remuneration paid
in FY26 (employee median was $94,599) and for the Chief Executive, the
amount specified in the table on page 120, $2,163,443.
1:23
23
The remuneration bands above include STI payments made to employees during FY26 in respect of FY25 performance. The FY23-FY25
LTI award vested during FY26; however, as the performance assessment outcome was 0%, no value was attributed to the vested shares
and therefore no associated share value is included above.
24
The remuneration bands above include 13 employees who received redundancy payments in FY26.
EXECUTIVE REMUNERATION CONT.
122MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
DirectorBoardAudit & Financial
Risk Committee
Safety & Enterprise
Risk Committee
People &
Performance
Committee
Nominations
& Corporate
Governance
Committee
Total
1
No. of meetings11
4
5
2
45
3
3
Fees
$
Meetings
attended
Fees
$
Meetings
attended
Fees
$
Meetings
attended
Fees
$
Meetings
attended
Fees
$
Meetings
attended
Fees
$
Scott St John
(Chair)11-5
(ex officio)
-4
(ex officio)
-5
(ex officio)
-3
(ex officio)
230,000
Mark Binns
114,00010--10,0003-1
(observer)
--124,000
Robert Hamilton
114,0001124,2505
(2 as chair)
---1
(observer)
--138,250
Hannah Hamling
114,0001113,000520,0004
(chair)
----147,000
Adrian Littlewood
114,00011--10,000411,00054,5003139,500
Susan Peterson
114,0001113,0005--22,0005
(chair)
6,0003155,000
Rachel Taulelei
Joined as a director on 20 August 2025.
Fees are representative of part-year payments.
98,1679
-
1
(observer)
-
3
(observer)
8,2504--106,417
James Miller
Resigned as a director on 19 September 2025.
Fees are representative of part-year payments.
28,50027,000
1
(chair)
----1,500-37,000
Mike Taitoko
Resigned as a director on 19 September 2025.
Fees are representative of part-year payments.
28,5002----2,7501--31,250
Lorraine Witten
Resigned as a director on 15 September 2025.
Fees are representative of part-year payments.
23,75022,7081------26,458
Total978,917-59,958-40,000-44,000-12,000-1,134,875
DIRECTOR REMUNERATION
Mercury has a Non-Executive Director Remuneration
Policy which can be found on the Corporate
Governance section of our website.
The directors’ remuneration is paid in the form of
directors’ fees. The Board Chair receives a base fee
which covers attendance at all Committee meetings.
Additional fees are payable to directors for service
as a Committee Chair or Committee member,
recognising the increased responsibilities and time
commitment associated with these roles. The approved
fees for Board and committee roles during FY26 are
set out below. The total pool of directors’ fees includes
headroom which may be used to pay ad hoc
compensation to directors for significant additional
work performed outside usual Board and committee
responsibilities (e.g. special projects). No additional
compensation was paid in FY26.
The total pool of fees able to be paid to directors is
subject to shareholder approval and currently stands at
$1,231,450 for a Board of eight directors. Directors’ fees
were last reviewed in 2024. There has been no change
to the directors' fee pool in FY26. We will look to
complete a review of directors' fees in FY27. The
comparator group used by PwC in 2024 is summarised
in PwC's summary report which can be found on the
Corporate Governance section of our website.
Under Mercury’s Non-Executive Director Remuneration
Policy, Non-Executive Directors are expected to achieve
and maintain a minimum shareholding in Mercury
equivalent to their fixed annual base fee after tax,
generally within three years of appointment.
Mercury meets directors’ reasonable travel and other
costs associated with Mercury business. Mercury
does not pay any retirement benefits and does not
offer share incentives or share options to directors.
Details of directors’ interests in Mercury securities
can be found on page 125.
The following people held office as directors during
the year to 30 June 2026 and the remuneration set
out in the table was received during the period. The
number of meetings and attendance rate by directors
during the year to 30 June 2026 was as follows:
For reference: Future Director Jasper Van Halder was paid $11,667 in relation to his role as
future director in FY26. Jasper Van Halder’s position as future director began on 1 December
2025 and will end on 30 November 2026.
1
Disclosure Committee meetings are not reported because they occur on an ad-hoc,
as-required basis.
2
This includes four regular Audit and Financial Risk Committee meetings and one out
of cycle meeting relating to climate-related disclosures.
3
This includes four regular People and Performance Committee meetings and one out
of cycle meeting relating to executive remuneration.
4
This includes nine regular Board meetings and two out of cycle meetings.
DIRECTOR REMUNERATION
Approved Board and committee fees for FY26
Chair fees
$
Member
fees
$
Board230,000114,000
Audit and Financial Risk Committee28,00013,000
Safety and Enterprise Risk Committee20,00010,000
People and Performance Committee22,00011,000
Nominations and Corporate Governance Committee-6,000
123MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
DIRECTORS’ DISCLOSURES
INTERESTS REGISTER
Disclosure of directors’ interests
Section 140(1) of the New Zealand Companies Act 1993 requires a director of a company to disclose certain
interests. Under subsection (2) a director can make disclosure by giving a general notice in writing to the
Company of a position held by a director in another named company or entity. The following are particulars
included in the Company’s Interests Register, based on disclosure made as at the date of this report for
the year ending 30 June 2026:
Mark Binns
National Infrastructure Funding and Financing LimitedChair
Hynds LimitedChair
Auckland International Airport LimitedDirector
Meridian Energy Limited Shareholder
Manawa Energy Limited Shareholder
Contact Energy Limited Shareholder
Genesis Energy Limited Shareholder
Vector Limited Shareholder
Robert Hamilton
Westpac New Zealand LimitedDirector
Tourism Holdings LimitedDirector
Oceania Healthcare LimitedDirector
Cyprus Enterprises LimitedDirector
Hannah Hamling
ArcActive LimitedShareholder
Adrian Littlewood
Craigs Investment Partners LimitedDirector/Shareholder
CIP Holdings LimitedDirector/Shareholder
2
Crown HoldCo LimitedDirector
1
Crown TopCo LimitedDirector
1
CIP Holding No.2 Limited and CIP Tui Holdings LimitedShareholder
1
Contact Energy LimitedShareholder
Spark New Zealand LimitedShareholder
Susan Peterson
Vista Group International LimitedChair/Shareholder
Craigs Investment Partners LimitedDirector/Shareholder
CIP Holdings LimitedDirector/Shareholder
2
Crown HoldCo LimitedDirector
1
Crown TopCo LimitedDirector
1
CIP Holding No.2 Limited and CIP Tui Holdings LimitedShareholder
1
Xero LimitedDirector/Shareholder
Kiwibank LimitedChair
1
Kiwi Group Capital Limited Director
1
Scott St John
Next Foundation (and associated vehicles)Director
ANZ Bank New Zealand LimitedChair
Australia and New Zealand Banking Group LimitedDirector
ANZ Group Holdings LimitedDirector
Nominating Committee of the Climate Change CommissionMember
Rachel Taulelei
ANZCO Foods Limited Director
1
The Warehouse Group Director
1
Wellington International Airport Limited Director
1
Wellington Regional Stadium Trust (Sky Stadium) Chair
1,2
NZ Rugby Appointments and Remuneration Panel Chair
1
Fonterra Sustainability Panel Chair
1,2
James Miller
Channel Infrastructure NZ Limited Chair
Vista Group International LimitedDirector
Ryman Healthcare LimitedDirector
Mike Taitoko
Takiwā LimitedDirector/Shareholder
Waiora Consulting LimitedDirector/Shareholder
Toha Foundry LimitedDirector/Shareholder
Takiwā NZ LimitedDirector/Shareholder
Toha Network LimitedDirector/Shareholder
Toha Aotearoa 2030 LimitedDirector/Shareholder
Lorraine Witten
Rakon LimitedChair/Shareholder
Rakon PPS Trustee LimitedDirector/Shareholder
RETIRED DURING THE REPORTING PERIOD
James Miller retired as a director during the period on 19 September 2025, Lorraine Witten retired as a
director during the period on 15 September 2025 and Mike Taitoko retired as a director during the period
on 19 September 2025. The following are the particulars recorded against their names in the Company's
Interests Register at the date they ceased to be directors.
1
Entries added by notices given by the directors during the year ended 30 June 2026.
2
Entries removed by notices given by the directors during the year ended 30 June 2026.
124MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
DIRECTORS’ AND OFFICERS’ INDEMNITIES
Indemnities have been given to and insurance has
been effected for, directors and senior managers
|of the Group to cover acts or omissions of those
persons in carrying out their duties and
responsibilities as directors and senior managers.
DISCLOSURE OF DIRECTORS’ INTERESTS
IN SHARE AND BOND TRANSACTIONS
Directors disclosed, pursuant to section 148 of the
New Zealand Companies Act 1993, the following
acquisitions and disposals of relevant interests
in Group shares and bonds for the the financial
year ending 30 June 2026:
DIRECTORS’ DISCLOSURES CONT.
DirectorInterest Entity
Stewart Hamilton
1
Chief Executive OfficerMercury NZ Limited
Richard Hopkins
1
Chief Financial OfficerMercury NZ Limited
Howard Thomas
1
Nil-
Kevin TaylorNil-
Craig NeustroskiNil-
1
This person is a Director of more than one subsidiary of Mercury NZ Limited, please refer to Company Disclosures.
Name of directorDate of acquisition/disposal
of relevant interest
Nature of transaction
and relevant interest
Consideration
(NZD)
Securities in which a
relevant interest was
acquired/(disposed)
Susan Peterson18 June 2026Acquisition of ordinary shares in Mercury NZ Limited$29,444.134,311
Adrian Littlewood2 June 2026Acquisition of a relevant 4,160 ordinary shares held by his spouse,
Claire Littlewood, under section 235(1)(c) of the Financial Markets
Conduct Act 2013, by virtue of having the power to exercise, or to
control the exercise of, voting rights attached to those ordinary shares
$04,160
Robert Hamilton30 April 2026Acquisition of ordinary shares pursuant to a make-up transaction
following election by Robert David Hamilton to participate in Mercury NZ
Limited's Dividend Reinvestment Plan (DRP), to correct an administrative
processing error by the broker in implementing the DRP election
$747.61121
Susan Peterson1 April 2026Acquisition of beneficial interest of ordinary shares as a result
of participation in Mercury's Dividend Reinvestment Plan
$520.7484
Mike Taitoko
1
4 November 2025Sale of ordinary shares. The relevant interest was disposed
of after ceasing his role as a Non-Executive Director
$13,020(2,000)
Susan Peterson30 September 2025Acquisition of beneficial interest of ordinary shares as a result
of participation in Mercury's Dividend Reinvestment Plan
$735.12110
Robert Hamilton3 September 2025Acquisition of beneficial interest of ordinary shares$50,016.737,500
DISCLOSURE OF DIRECTORS’ INTERESTS
IN SHARES AND BONDS
Directors disclosed the following relevant interests
in Group shares and bonds, based on information
known and disclosures made for the financial year
ending 30 June 2026:
DirectorNumber of shares in which
a relevant interest is held
Nature of relevant
interest
Number of bonds in which a relevant interest is heldNature of
relevant interest
Change since
30 June 2025
Mark Binns28,240Beneficial150,000 MCY050 Capital BondsBeneficial-
Robert Hamilton7,62 1Beneficial--+7,621 shares
Hannah Hamling16,300Beneficial---
Adrian Littlewood8,320Beneficial--+4,160
Susan Peterson9,991Beneficial--+4,505 shares
Scott St John 50,099Beneficial---
Rachel Taulelei0----
James Miller
1
40,320Beneficial20,000 MCY070 Green BondsBeneficial-
Mike Taitoko
1
0---(2,000)
Lorraine Witten
1
0----
DISCLOSURE OF SUBSIDIARY DIRECTORS’
INTERESTS
The following are particulars included in the
Interests Register for Mercury’s subsidiary
companies as at 30 June 2026:
1
This person ceased to be a director during the period.
1
This person ceased to be a director during the period.
125MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
SECURITY HOLDER INFORMATION
SHAREHOLDER INFORMATION
Twenty largest registered shareholders as at 30 June 2026
1
NameNumber
of shares
% of shares
2
The Sovereign in right of New Zealand acting by and through their
Minister of Finance and Minister for State Owned Enterprises
728,943,181 51.15
HSBC Nominees (New Zealand) Limited 66,012,487 4.63
BNP Paribas Nominees (NZ) Limited 58,760,427 4.12
Custodial Services Limited 52, 387,706 3.68
HSBC Nominees (New Zealand) Limited A/C State Street 45,508,688 3.19
Citibank Nominees (New Zealand) Limited 42,858,492 3.01
JPMorgan Chase Bank NA NZ Branch-Segregated Clients Acct 34,112,809 2.39
Forsyth Barr Custodians Limited 32,991,358 2.32
Apex Custodian Nominees (NZ) Limited 25, 287, 376 1.77
Accident Compensation Corporation 25,259,558 1.77
HSBC Nominees A/C NZ Superannuation Fund Nominees Limited 15,367,882 1.08
New Zealand Depository Nominee Limited 15,167,065 1.06
FNZ Custodians Limited 13,576,112 0.95
JBWere (NZ) Nominees Limited 12,395,156 0.87
Simplicity Nominees Limited 9,662,210 0.68
PT (Booster Investments) Nominees Limited 8,061,024 0.57
Generate Kiwisaver Public Trust Nominees Limited 7,320,577 0.51
BNP Paribas Nominees (NZ) Limited 4,661,916 0.33
Forsyth Barr Custodians Limited 4,035,533 0.28
JBWere (NZ) Nominees Limited 2,995,075 0.21
Total 1,205,364,632 84.58
1
As required by the NZX Listing Rules, New Zealand Central Securities Depository (NZCSD) holdings are included
above and not detailed separately.
2
Percentage calculated on the basis of Mercury having 1,425,040,949 ordinary shares on issue as at 30 June 2026.
Distribution of shareholders and holdings as at 30 June 2026
Size of holdingNumber of
shareholders
% of
shareholders
Number of
shares
Holding
quantity %
1
1 to 1,0002525240.05 17,055,865 1.20
1,001 to 5,0003007447.70 70,470,998 4.95
5,001 to 10,00047917.60 35,316,250 2.48
10,001 to 100,00028314.49 58,859,919 4.13
100,001 and above1060.17 1, 243, 337,917 87. 25
Total 63,054 - 1,425,040,949 100
1
Rounding applied.
Substantial product holders as at 30 June 2026
Class of securitiesNumber of securities
in substantial holding
Total number of
securities in class
The Sovereign in right of New ZealandOrdinary shares74 4, 372,188
1
1,425,040,949
2
1
This comprises (a) 728,943,181 shares held by the Crown on its own account; (b) 15,421,007 shares forming part of the New Zealand
Superannuation Fund which are the property of the Crown; and (c) 8,000 shares held by Public Trust on trust for the Crown and certain iwi.
The New Zealand Superannuation Fund holding is reported on a trade-date basis and includes 53,125 shares purchased on 29 June 2026
that settled on 1 July 2026.
2
As at 30 June 2026, Mercury had 1,425,040,949 ordinary shares on issue.
126MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
BONDHOLDER INFORMATION
Twenty largest registered holders of MCY030 green bonds (1.56%) as at 30 June 2026
1
NameNumber of MCY030
green bonds
% of MCY030
green bonds
2
BNP Paribas Nominees (NZ) Limited 31,630,000 15.82
Custodial Services Limited 31,225,000 15.61
Apex Custodian Nominees (NZ) Limited 30,407,000 15.20
HSBC Nominees (New Zealand) Limited 15,000,000 7.50
Forsyth Barr Custodians Limited 9,306,000 4.65
FNZ Custodians Limited 8,552,000 4.28
Citibank Nominees (New Zealand) Limited 6,331,000 3.17
Accident Compensation Corporation 5,521,000 2.76
JBWere (NZ) Nominees Limited 5,050,000 2.53
Queen Street Nominees Ltd No.1 5,000,000 2.50
MT Nominees Limited 4,448,000 2.22
NZPT Custodians (Grosvenor) Limited 4,328,000 2.16
NZX WT Nominees Limited 4,123,000 2.06
FNZ Custodians Limited 3,665,000 1.83
China Construction Bank (New Zealand) Limited 3,500,000 1.75
Custodial Services Limited 2,526,000 1.26
Forsyth Barr Custodians Limited 2,404,000 1.20
HSBC Nominees (New Zealand) Limited A/C State Street 1,896,000 0.95
JPMorgan Chase Bank NA NZ Branch-Segregated Clients Acct 1,700,000 0.85
Forsyth Barr Custodians Limited 1,557,000 0.78
Total 178,169,000 89.08
1
As required by the NZX Listing Rules, New Zealand Central Securities Depository (NZCSD) holdings are included above
and not detailed separately.
2
Percentage calculated on the basis of Mercury having 200,000,000 MCY030 green bonds on issue as at 30 June 2026.
Distribution of MCY030 (1.56%) green bondholders and holdings as at 30 June 2026
Size of holdingNumber of
MCY030 green
bondholders
% of MCY030
green bonds
Number of
MCY030 green
bonds
Holding
quantity %
1,001 to 5,000156.30 75,000 0.04
5,001 to 10,0005121.43 475,000 0.24
10,001 to 100,00012150.84 4,505,000 2.25
100,001 and above5121.43 194,945,000 97.47
Total238- 200,000,000 100
Twenty largest registered holders of MCY040 green bonds (2.16%) as at 30 June 2026
1
NameNumber of MCY040
green bonds
% of MCY040
green bonds
2
BNP Paribas Nominees (NZ) Limited 40,748,000 20.37
Custodial Services Limited 35,321,000 17.66
Accident Compensation Corporation 22,588,000 11.29
FNZ Custodians Limited 20,432,000 10.22
Generate Kiwisaver Public Trust Nominees Limited 14,615,000 7. 31
Southland Building Society 9,250,000 4.63
Forsyth Barr Custodians Limited 7,744,000 3.87
NZX WT Nominees Limited 5,583,000 2.79
Citibank Nominees (New Zealand) Limited 4,805,000 2.40
Forsyth Barr Custodians Limited 3,973,000 1.99
Dunedin City Council 3,000,000 1.50
MT Nominees Limited 3,000,000 1.50
JPMorgan Chase Bank NA NZ Branch-Segregated Clients Acct 2,507,000 1.25
JBWere (NZ)Nominees Limited 2,013,000 1.01
Investment Custodial Services Limited 1,606,000 0.80
Pathfinder Nominees Limited 1,495,000 0.75
FNZ Custodians Limited 1,391,000 0.70
JBWere (NZ) Nominees Limited 1,288,000 0.64
Forsyth Barr Custodians Limited 1,278,000 0.64
Custodial Services Limited 1,270,000 0.64
Total 183,907,000 91.95
1
As required by the NZX Listing Rules, New Zealand Central Securities Depository (NZCSD) holdings are included above
and not detailed separately.
2
Percentage calculated on the basis of Mercury having 200,000,000 MCY040 green bonds on issue as at 30 June 2026.
Distribution of MCY040 (2.16%) green bondholders and holdings as at 30 June 2026
Size of holdingNumber of
MCY040 green
bondholders
% of MCY040
green bonds
Number of
MCY040 green
bonds
Holding
quantity %
1,001 - 5,000177. 39 85,000 0.04
5,001 - 10,0005624.35 535,000 0.27
10,001 - 100,00011248.70 4,353,000 2.18
100,001 and above4519.57 195,027,000 97.51
Total230- 200,000,000 100
127MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
BONDHOLDER INFORMATION CONT.
Twenty largest registered holders of MCY050 capital bonds (5.73%) as at 30 June 2026
1
NameNumber of MCY050
capital bonds
% of MCY050
capital bonds
2
Forsyth Barr Custodians Limited80,469,00032.19
JBWere (NZ) Nominees Limited33,804,00013.52
HSBC Nominees (New Zealand) Limited22,108,0008.84
Custodial Services Limited17,897,0007.16
Citibank Nominees (New Zealand) Limited11,550,0004.62
FNZ Custodians Limited8,971,0003.59
Forsyth Barr Custodians Limited8,802,0003.52
Generate Kiwisaver Public Trust Nominees Limited5,686,0002.27
Forsyth Barr Custodians Limited5,633,0002.25
Adminis Custodial Nominees Limited3,705,0001.48
CML Shares Limited3,655,0001.46
Millar Capital Fund Limited3,000,0001.20
BNP Paribas Nominees (NZ) Limited2,618,0001.05
NZX WT Nominees Limited2,107,0000.84
Masfen Securities Limited2,000,0000.80
Best Farm Limited1,500,0000.60
Investment Custodial Services Limited1,336,0000.53
Fletcher Building Educational Fund Limited1,000,0000.40
JBWere (NZ) Nominees Limited1,000,0000.40
Robert William Bentley Morrison & Andrew James
Stewart & Anthony James William Howard
1,000,0000.40
Total217,841,00087.14
1
As required by the NZX Listing Rules, New Zealand Central Securities Depository (NZCSD) holdings are included above
and not detailed separately.
2
Percentage calculated on the basis of Mercury having 250,000,000 MCY050 capital bonds on issue as at 30 June 2026.
Distribution of MCY050 (5.73%) capital bondholders and holdings as at 30 June 2026
Size of holdingNumber of
MCY050 capital
bondholders
% of MCY050
capital bonds
Number of
MCY050 capital
bonds
Holding
quantity %
1,001 - 5,00011011.79 548,000 0.22
5,001 - 10,00020822.29 1,990,000 0.80
10,001 - 100,00055559.49 18,677,000 7.47
100,001 and above606.43 228,785,000 91.51
Total933- 250,000,000 100
Twenty largest registered holders of MCY060 green bonds (5.64%) as at 30 June 2026
1, 3
NameNumber of MCY060
green bonds
% of MCY060
green bonds
2
Custodial Services Limited64,419,00042.95
HSBC Nominees (New Zealand) Limited20,600,00013.73
FNZ Custodians Limited11,901,0007.93
Forsyth Barr Custodians Limited11,176,0007.45
BNP Paribas Nominees (NZ) Limited11,053,0007. 37
JBWere (NZ) Nominees Limited4,062,0002.71
NZPT Custodians (Grosvenor) Limited3,101,0002.07
Forsyth Barr Custodians Limited 2,364,0001.58
Investment Custodial Services Limited2,258,0001.51
JPMorgan Chase Bank NA NZ Branch-Segregated Clients Acct842,0000.56
Custodial Services Limited832,0000.55
Fletcher Building Educational Fund Limited670,0000.45
Forsyth Barr Custodians Limited665,0000.44
PT (Booster Investments) Nominees Limited 638,0000.43
HSBC Nominees (New Zealand) Limited A/C State Street 600,0000.40
NZX WT Nominees Limited582,0000.39
Apex Custodian Nominees (NZ) Limited560,0000.37
Omega Investments Limited550,0000.37
Citibank Nominees (New Zealand) Limited500,0000.33
JBWere (NZ) Nominees Limited 500,0000.33
Sirius Capital Limited500,0000.33
South Pacific Securities Limited500,0000.33
Total138,873,00092.58
1
As required by the NZX Listing Rules, New Zealand Central Securities Depository (NZCSD) holdings are included above
and not detailed separately.
2
Percentage calculated on the basis of Mercury having 150,000,000 MCY060 green bonds on issue as at 30 June 2026.
3
The table above reports the top 22 bondholders as there are four holders sharing the 19th position.
Distribution of MCY060 (5.64%) green bondholders and holdings as at 30 June 2026
Size of holdingNumber of
MCY060 green
bondholders
% of MCY060
green bonds
Number of
MCY060 green
bonds
Holding
quantity %
1
1,001 - 5,000248.57 120,000 0.08
5,001 - 10,0005318.93 503,000 0.34
10,001 - 100,00015956.79 5,063,000 3.38
100,001 and above4415.71 144,314,000 96.21
Total280- 150,000,000 100
1
Rounding applied.
128MERCURY 2026 INTEGRATED REPORT |MENULEADERSHIP AND GOVERNANCE
BONDHOLDER INFORMATION CONT.
Twenty largest registered holders of MCY070 capital bonds (6.42%) as at 30 June 2026
1
NameNumber of MCY070
capital bonds
% of MCY070
capital bonds
2
Forsyth Barr Custodians Limited158,476,00045.28
Custodial Services Limited47,888,00013.68
JBWere (NZ) Nominees Limited42,510,00012.15
Forsyth Barr Custodians Limited15,866,0004.53
HSBC Nominees (New Zealand) Limited15,000,0004.29
FNZ Custodians Limited13,545,0003.87
Forsyth Barr Custodians Limited3,656,0001.04
Masfen Securities Limited3,100,0000.89
Cassington Holdings Limited2,868,0000.82
Best Farm Limited2,000,0000.57
Investment Custodial Services Limited1,748,0000.50
Garrett Smythe Limited1,743,0000.50
Generate Kiwisaver Public Trust Nominees Limited1,700,0000.49
Richard Barton Ada
[TRUNCATED]
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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