2026 Half-Year Results Presentation

TO and welcome to contacts interim results presentation for F Y26. We're going to start by reflecting on highlights from the first half and we'll take you through the financial results. We'll then move to the onto a separate presentation on the 525 million equity raised to announced this morning and then we'll open for question and answers when both presentations have been made. We won't stop at the end of the result section. Turn to page four. first half of um 2020 FY26 with transformation of the for contact. We completed the mano acquisition on the 11th of July 2025 welcoming the man staff and assets to the fold. Integration has since progressed very well and we've secured more than 80% of the announced cost synergies in the first six months of ownership that is on a run rate basis. mana hydro and renewable PPA increased our renewable generation in the first half by 1.3 terowatt hours and we generated 2 terowatt hours to our new tooka 3 geothermal power station what that meant is that generation was 97% renewable in the first half 26 up from 89% in first half 2025 daff was also up 24% to 500 million as a result of the mano acquisition and our renewal Investments profit was up 44% and the board have declared a dividend of 16 cents per share consistent with our indication of 40 cents per share total dividend for F.6. We continue to deliver for our customers. We started supplying electricity to New Zealand Steel's new electric arc in December last year. We've also secured the all of government gas contract and are now supplying two pedigles of gas to support critical infrastructure and community assets throughout New Zealand. We continue to support our retail customers through innovative products like the time of use good plans with more than 150,000 customers now choosing discounted or free off- peak power. into page five onto the market. We've seen significant hydro inflows across New Zealand in the first half with inflows at 128% of mean leading to lower spot prices for electricity. As a result, generation was more than 90% renewable across the market and hydro storage lakes filled up with natural storage entering the period at 128% of mean. Hydro storage together with gas storage at AGS being nearly full and the Genesis stockpile replenished has put the market in a very good position going into winter 2026 with reducing fueling risk. Gas scarcity remains a key issue with production down 16% in the first quarter of the financial year compared to the same period a year but year before. We're seeing an uptick in demand coming through. Demand was up 4% in first half 26 or 1% when normalized for the dry response of NZ aluminium smelters which was activated in the dry conditions of first half 2025. If you remember lines cost stepped up significantly from the 1st of April 2025 as this is a pass through cost to customers. This has created upward pressure on overall electricity tariffs across the market on project execution. Our renewable build program is tracking well. Contact is 1.1 terowatt hours of renewable generation and 100 megawatts of battery capacity currently under construction. Construction is complete on the Glen Brook battery and transparent system integration is nearing completion as commissioning continues. Commissioning actually began in early February and we expect the battery online around about the end of March. At Tami stage two site construction by the EPC contractor is progressing to schedule with cooling towers on site and supporting civils complete. Kofi Park which is being built through our JV with light source BP over 50% of solar panels have been installed. We expect to have the solar farm online around the end of June. Putting this together with our recently completed geothermal builds, THAAR and Tuka 3, we have maintained a continuous build program since 2021. This has led to a continuity of our major project expertise, key staff, suppliers, contractors setting up us up well as we continue with our renewable build plans on the contact 31 strategy. Looking ahead, we have better clarity across the key market risks, giving us confidence to invest in line with our strategy. With New Zealand aluminium smelters now in a long-term contract, which includes demand response and the HFO now in place, the market is in a much better place to manage a dry year risk and support security of supply through the energy transition. We saw a measured response from the government alongside the release of the frontier report in October. The review found that the current market design and the rules are working well to facilitate market entry and investment in generation. The industry commissioned an extensive report themselves on the sector from BCG which was published in November. It shows that we are developing renewable generation at the fastest rate in New Zealand history and that the market challenges we are seeing are largely due to the rapid decline in the gas market. We expect to see resolution on further key market topics this year including the all of government energy procurement LNG infrastructure and RMA reform which there have already been announcements on. As always, the electricity sector is likely to be a focus in an election year. This is not new. However, we expect at least the mainstream parties to draw from the government review and the BCG report to understand industry challenges and the investment required now and going forward. And with that, I'll hand over to Matt to take you through the results. >> Thanks, Mike Ka. My name is Matt Forbes and I'm pleased to present contacts 1 half26 financial results. This half was defined by delivery, good financial performance, the successful integration of minor energy and continued progress across our renewable development program. This result reflects the deliberate choices we have made to reposition the business for larger scale, improved earnings quality, and lower risk, leaving us well placed for the next phase of growth under our contact 31 strategy. Before turning to the detail, I'll step through three key themes from the first half. The first key theme was the acquisition of Manoa. The $2 billion acquisition completed on the 11th of July 2025 and is already contributing as expected, adding capability and scale, improving earnings quality and materially reducing portfolio risk from day one. On an annualized basis, Manoa adds 1.9 terowatt hours of lowcost long life hydrogeneration and exposure to contracted renewable supply PPAs. This structurally reduces our exposure to clutter hydrovolatility, the gas market uncertainty that we faced and aging thermal assets. Importantly, Manua increases our expected earnings while reducing the level of overall risk and underpinned by the early delivery of the cost synergies with the majority already secured within the first six months. The second theme for the results is our sales discipline. Long-term PPAs with major counterparties were fully in placed. A new supply to New Zealand steel commenced and we benefited from the fixed price mercury contract acquired with Manawa. These long-dated inflation protected arrangements now underpin a meaningful proportion of forecast generation. They improve our earnings visibility and cash flow confidence while continuing to invest in new renewable capacity. And so our approach to strate channel management remains really deliberate. We prioritizing channels for stability and generation shape while retaining some market exposure to ASX or a market link pricing. The third theme in the results is our operational delivery. To hooker 3 was online in the period and has consistently generated above its business case. Planned statutory outages including a toara were well managed and we strengthened our gas position contracting an additional seven pigles annually from Greymouth on top of the gas from OMV. Together, these actions support customers, underpin system reliability, and reduce contacts dry year risk. Turning now to financial performance, EBIDAF for 1 half26 was $500 million, an increase of $96 million on the prior period, driven primarily by the portfolio scale from the new geothermal generation and the monowac position partially offset by normalization of pricing uh which reflects the unusually stressed conditions in 1 half25. Renewable generation volumes increased by 1.5 terowatt hours contributing $123 million to Ebadaf versus 1 half25 and this reflects the structural increase in geothermal output with Jooka 3 online and the inclusion of mana rather than any short-term market or hydrarology effects. Pricing was a headwind. Long-term contractor channels reduced EBA by $13 million while market link pricing reduced EBA by $37 million. Importantly, this reflects the proportion of volumes in longdated PPA channels and the normalization from elevated 1/25 pricing in market link channels. Other income increased by $42 million driven by higher retail gas margins, Manoa income streams, insurance proceeds, and the absence of the methanex gas loss recorded last year. Fixed operating costs increased by $68 million, primarily reflecting the inclusion of the Manoa operating cost base and timebound transaction and integration costs. Turning briefly to net profit impact increased by $63 million driven primarily by the increase in Ebadaf. Depreciation and interest increased as expected following the Mono acquisition and the fair value movements were positive versus the prior period. These are non-cash and do not affect underlying cash earnings. Looking at our segment performance, this highlights this impact of the Manoa acquisition and the strength of our wholesale business alongside impressively disciplined retail execution. Wholesale EBIT DAFF increased by $110 million to 577 million driven by higher renewable generation volumes and the inclusion of Manawa. As mentioned, these benefits were partially offset by lower achieved prices reflecting the normalization of market conditions. The retail business EBA was a loss of $25 million consistent with the prior period. This is despite $79 million of network and energy cost inflation during the first half. Approximately 90% of these higher costs were recovered, reflecting the disciplined pricing and strong margin management. This is not only critical to supporting our financial performance, but underpins our confidence to fund such a large renewable growth program. Corporate costs increased by $15 million, largely reflecting the mana transaction and integration costs, higher incentive costs associated with contact outperformance, and targeted spend to support the development of contact 31. Starting with the wholesale business, renewable generation accounted for 97% of total output in the half, reflecting both the new geothermal capacity and the step change in portfolio mix following month. Thermal generation declined to 178 gawatt hours, which is the lowest level on record and reflected the increase in renewable generation. This is the portfolio we've deliberately been building towards with the addition of the longdated fixed price PPA acquired through Monawa. Average generation costs were higher in the period, but they also enabled us to contract a significant larger portion of fixed volume and as I mentioned these fixed volumes support earning certainty and reduces exposure to market volatility and you would have seen the benefit of that during the national inflows over the last five months which have seen very low wholesale prices. Stepping back since the launch of the contact 26 strategy in FY21, renewable generation has increased from 81% to an expected 98% in a mean hydraological year. This is a structural transition that materially improves our portfolio resil resilience, asset quality and earnings quality. Looking at wholesale contracted revenue, this reflects that theme around strategically shifting towards longerdated fixed price channels. Strategic fixed price sales increased by 1.7 terowatt hours and a half. This was driven by the acquisition of Manawa's long-term supply agreement with Mercury, a full period of the Tohara linked PPAs, higher ENZ volumes, and a new contract with New Zealand steel. Pricing outcomes were as expected. Longdated contracted prices now reflect structurally higher wholesale price levels while short-term CFD pricing moderated as contracts rolled into a more normalized near-term market environment. Other wholesale income increased reflecting non-ele electricity generation income from minor hydro assets and the absence of prior period losses associated with the methanex gas arrangements. Moving on to trading outcomes, our performance was solid and reflects our better position portfolio. Total merchant generation volumes were broadly flat as we were able to hedge up the Mana merchant volumes in the period. The improvement in location losses reflects increased North Island generation following the Mana acquisition and additional geothermal capacity, which is closer to load. And in Q2, when very low prices saw us run short at times, it was economically more attractive to purchase from the market than generate from our own assets. This resulted in very low LWAP to GWAP spreads and improved financial outcomes overall. Turning to the performance of our retail business, performance in the first half reflects the strong cost recovery and disciplined execution in the face of significant input cost inflation. Retail margins were under pressure and as noted earlier the increases in network and transmission costs added $79 million during the first half. Despite this, strong pricing actions limited the EVAF impact resulting in a loss of $25 million which was consistent with the prior period and this outcome reflects a careful balance. One, supporting customers through a challenging economic environment. two, maintaining the financial sustainability of our retail business, and three, continuing to have the confidence to continue to invest in renewable generation. Within retail, gas gross margins improved from $7 million to $15 million, supported by higher sales volumes, enabled by the additional supply from Grammar. Our telco business continues to perform with connections up 16% and gross margin increasing to $8 million. While cost to serve remain well controlled, you see the multi-product offerings continuing to support our customer growth and our retention across the retail portfolio. Moving on to other operating costs, the increase in the half largely reflects the acquisition of Manoa rather than underlying cost pressures. Operating costs increased by $60 million, primarily reflecting the minor operating cost base along with transaction and integration costs. General inflation contributed around $5 million with operating cost headwinds above this driven by higher insurance, labor costs, enhanced employee benefits, and the relentless march of council rates. Importantly, we're already delivering on the expected manual synergies. We achieved a $7 million in period reduction in operating costs during the half with 80% of the synergy target achieved on a run rate basis after the first six months. Under the contact 31 strategy, productivity remains a core focus. In total, we're targeting $38 million of operating cost savings by FY 207. That is $28 million from the Manoa synergies which includes $13 million we expect to deliver in year within FY26 and an additional $10 million for broader productivity initiatives in FY27. Maintaining cost discipline across the rest of the business is essential to ensure that these productivity benefits translate fully into earnings. Looking at cash flow, which strengthened materially in the half, operating free cash flow is up to $249 million, an increase of $111 million on the prior period, driven by high EBA death and working capital outcomes, partly offset by high interest costs following the mono acquisition. Working capital was still a $68 million outflow in the first half and this reflects the timing of payments associated with the newly signed HFO fuel supply arrangements and our geothermal spares procurement. These movements are timing related and not reflected on underlying performance. Same business capex was $59 million in the half but with FY26 guidance of between 170 million and $185 million we expect a heavier second half spend. Operating free cash flow conversion was 50% in line with guidance. For the next two slides, I'll stay focused on the 1 half26 performant and execution read through with the investment decisions we've taken today and the strategic funding plan to be addressed later in the presentation. Starting with growth capital expenditure, we see strong activity across our Tami 2 uh JB to deliver solar at Kofi Park and the completion of our first battery at Kenbrook. Overall projects are tracking as expected with guidance for FY26 growth capex of 500 to $510 million again pointing to a significant acceleration in the second half of this financial year. Turning to the balance sheet, net debt has increased as expected, reflecting both renewable investment and the minor acquisition. During the period, we issued a new $500 million euro EMTN note, further diversifying our funding sources and extending our debt maturity profiles. Proformer net debt e was 2.8 times at 31 December supported by expected earnings equity credits from our uh hybrid bonds uh and remains well within target ranges. Dividends for 1/26 is set at 16 cents per share consistent with the prior year and in line with our dividend policy. For FY26, we continue to target a fullear dividend of 40 cents per share, which represents a 3% increase on FY25 with the interim dividend representing 40% of the fullear target. The increase in absolute dividends uh reflects the number of shares on issue following the Mona acquisition. Looking ahead, our FY26 expected reported EVA DAFF is now 6 $965 million, which is an increase of $15 million on our expected reported Ebaff we announced in August, reflecting the first half outperformance. There have been no change to second half assumptions which use mean hydro expectations and the guidance upgrade is driven entirely by delivered performance in the first half. This consistency reflects the quality of the portfolio we're now running. One that is more resilient, more predictable, and better positioned to fund the next phase of renewable growth. With that, we'll conclude the presentation of the results. I'll hand back to Mike to lead on the equity race. Thank you, Matt. Um, hello again. Before we get into the presentation, we have to acknowledge that due to legal restrictions, we're unable to discuss any details around the equity raise other than the basic terms referred to in the announcement and investor presentation released on the NZX and ASX today this morning. During this presentation, we'll provide an overview of the equity raise, the use of proceeds, financial impacts, and basic offer detail before opening up the call to Q&A. So, we're pleased to announce today that Contact is launching a $525 million equity raising to accelerate the contact 31 strategy. As New Zealand's most diversified generator with the largest national development renewable development pipeline, we are well positioned to capture the large and growing New Zealand energy market opportunity. Our contact 31 strategy is focused on leading New Zealand's renewable energy future and delivering the highest value outcomes for our investors and New Zealand. The equity raised will rate will advance the execution potential upsizing of renewable energy projects which would accelerate the contact 31 strategy. The capital raised will be used to commence the prefid drilling on Tahara 2 to advance steamfield development and explore upsizing the target capacity from 50 megawatt to 60 to 70 megawatt. It will be used to fund our investments in the Glen Brook battery 2.0 and glor solar development projects. The proceeds are also expect to enhance our ability to bring forward development pipeline opportunities which are in line with the contact 31 capital allocation framework. The equity raise is expected to reduce the first half 2026 S&P net debt to DAFF ratio from 2.8 to 2.3 times enhancing our ability to accelerate further development opportunities from the broad opportunity set now in front of us. The raise is structured as a fully underwritten placement of $450 million at a non-underwritten retail offer of up to 75 million with the ability to accept over subscriptions at contacts discretion. Our portfolio is well positioned in the New Zealand market, diversified across geothermal, hydro, wind PPA, thermal and emerging solar and battery capacity. We have the largest renewable development pipeline in New Zealand, giving us strong development optionality to meet growing demand. We are the leader in geothermal energy, operating seven geothermal stations producing around 5 terowatt hours peranom, around 50% of New Zealand's annual geothermal generation. In addition, we have continued to build out our competitive strengths and battery development through securing prime locations near growing customer bases, investing in in-house development capabilities, and leveraging our complimentary generation portfolio mix. This combination, a diversified portfolio, deep development optionality, and a strong track record of delivery underpins our ability to capture the growing market opportunity. New Zealand's national energy transition is in flight and electricity demand is expected to grow by 3 to 5 terowatt hours by 2030 driven by electrification across data centers, dairy, transport, and industry. Increasing renewable penetration is also creating greater intraday volatility limiting the value of flexible firming solutions such as batteries and stored hydro. Customer behaviors are also evolving. Large CNI users is seeking price certainty and residential electification is shifting load pattern with enhanced clarity of market fundamentals including the New Zealand aluminium smelter operations and winter energy security. The environment now supports long-term investment with confidence. In this sense, our contact 31 strategy was developed to play to contact strengths and lead New Zealand's renewable energy future. We're committed to extend our advantage New Zealand's thermal leader, lead on new flexibility in New Zealand, build into new demand with wind and solar, and lead the energy transition at home. In that context, today's capital raising will advance the execution and potential upsizing of renewable energy projects which will would accelerate contact 31 strategy. Matt, thanks Mike. Now over to uh the use of proceeds. Proceeds from this equity raise will be invested to advance advance the execution and potential upsizing of renewable energy projects and will continue to invest in line with the contact 31 capital allocation framework. The combination of geothermal batteries and solar investments positions us to deliver flexible lowcost supply as demand continues to grow. The capital raised is expected to be invested across three pillars. Pillar one, we're investing $30 million to start pre drilling on to hahara 2 to advance steamfield development and to explore options to upsize the project from 50 megawatt to 60 to 70 megawatt. Updated reservoir modeling has indicated that a plant of between 50 to 70 megawatt can be supported compared to the original 50 megawatt plant we identified at our invest. The drilling program will help confirm these modeling estimates. This investment aligns with the contact 31 strategic commitment to extend our advantage as New Zealand's geothermal leader. In pillar 2 today, we have improved investment in uh in the Glen Brook battery 2.0 and the Glor solar projects. We expect to invest $235 million in the Glenbrook battery uh on balance sheet and around $45 million to fund contact share of the off balance sheet solar project. Once complete, the Glen Brook battery project will increase our battery capacity to 300 megaww, strengthening our ability to manage market volatility, shift renewable output into higher value periods and lead on our strategic commitment to lead on the flexibility lead on flexibility in New Zealand. The Gloric project secures 230 gawatt hours peranom of contracted output under PPA to contact while retaining the capital efficiency uh and adhering to the contact strategy of building new demand uh with wind and solar. The remaining proceeds are expected to enhance our ability to bring forward development of pipeline opportunities under pillar three. We believe that we have great optionality across our development pipeline and believe that having a greater ability to bring these accretive developments sooner if market condition and project economics are supportive will strengthen our competitive position and support an acceleration of the contact 31 strategy. The following slides provide additional information on each of these pillars. Geothermal generation provides an attractive long life base reliable renewable generation and is an anchor to intermittent renewable growth. Geothermal energy development and operations is a cornerstone of contact's operational capabilities and key to our competitive strength. We are New Zealand's largest geothermal producer and have a strong track record of identifying, securing, constructing, and operating geothermal opportunities. As part of the contact 31 strategy, we've outlined our targets to have an additional 250 megawatts of geothermal capacity either operational or under construction or at FID by 2031. The updated Tahara 2 reservoir modeling has indicated that a plant of 50 to 70 megawatts can be supported versus the additional the 50 megawatts identified and disclosed to the market that I invest today. That additional 20 megaww equates to $165 gawatt hours perom of output or around $18 million of potential incremental ebida die in FY31 based on our longr run wholesale price expectations and the indicative costs to build. This outcome will increase the expected project costs by 130 to $150 million based on our assumed costs of 6.5 million to 7.5 million per megawatt. The 30 million drilling program that we've committed to today is expected to help confirm modeling estimates help us to better determine the optimal capacity and plant configuration prior to final investment decision in FY27. Our target returns for geothermal investment uh remain in line with the contact 31 capital allocation framework of between 10 and 12%. Batteries will play a crucial role in the New Zealand energy system by providing important flexibility to accommodate thermal generation displacement and retirement, intermittent renewable growth and rising peak demand. As renewable penetration continues to increase, intraday volatility will grow. Batteries provide the firming and capacity required to maintain reliability of the system and to optimize value for contact. Over time, the sources of value that we'll get from a battery will evolve. Early returns are expected to come from reserves and arbitrage, but longerterm benefits include portfolio shaping, hedging flexibility, and integration with our base load geothermal. Not all battery developments or projects are created equally. Attractive battery developments are driven by a small number of factors. Site proximity to load, strong grid connectivity, having experienced development partners, and efficient deployment sequencing. All areas where contact has proven development capacity. And the Glen Brook battery 2.0 has a number of these attractive attributes. It's strategically loc located close to the Oakland demand centers and transmission and increases the value from stored energy enhancing GWAP capture and reduces context reliance on thermal peaking. The project is not has not been exposed to the recent spike in lithium prices with the lithium price fixed in December 2025. We've also been able to leverage our development experience from the first battery at Glenbrook with a replicated technology design and contracting approach supporting our cost and confidence in delivery. These attributes compared uh combined with a strong interest from a third with from third party offtakers are expected to support project returns in line with our capital allocation frame. The Glen Brook battery 2.0 lives lifts our total battery capacity to 300 megawatt and is expected to cost $235 million with a fully ramped Ebadaf of around 35 to $40 million peranom. The contact board has also approved investment in the Glor solar project subject to final funding arrangements. The project was granted consent following an appeal to the process in 2025 and the solar farm is expected to provide around 285 gwatt hours of upper north island generation close to load supporting grid stability and improving contacts GWAP. We have committed to a 15-year PPA arrangement for 80% of the generation from this project. The project's offbalance sheet JV structure reduces the upfront capital requirements while preserving access to the important renewable output with a long-term PPA. The project is expected to cost $35 million with our equity contribution estimated to be around $45 million and achieve a contact IR in excess of our 12% target return. Moving on to this slide on demand. Look, at contact 31, we modeled three New Zealand electricity market demand scenarios to support the development of the strategy. The strategy and development targets within the contact 31 assumes a disorderly decarbonization scenario which is represented by the red line um second from the bottom on the chart on the left hand side. Any additional proceeds from the equity raise are expected to enhance our ability to bring forward development projects in our development pipeline if a more aggressive New Zealand electricity market demand scenario event. We have a broad set of attractive development opportunities in front of us beyond what is included in the contact 31 development targets. Maintaining large and a large and diversified pipeline helps drive development efficiently and improves our ability to respond dynamically to market signals onto the financial impacts of the roads. We built a balance sheet which is diversified by funding source and tener to support financing flexibility with an attractive cost of capital. The equity raise is expected to enhance development acceleration flexibility through increase in investment capacity with the equity raise expected to reduce 1/2 uh 26 S&P net debt to EVAF ratio from 2.8 times to 2.3 times. Leverage is expected to remain in our target 2.6 to 2.8 times over the medium term in line with our capital allocation framework. Our FY31 targets remain in place uh with with the potential upside from with the potential upsides from the upsizing of Tahara 2 and the acceleration of future growth opportunities um drawing nearer. Onto some details of the offer. The $525 million equity raise comprises a $450 million fully underwritten placement and a non-underwritten retail offer of $75 million. The structure has been chosen to provide almost all existing shareholders the opportunity to subscribe for at least their proriter portion on a best efforts basis. New shares under the placement will be issued at $8.75 per share reflecting a 7.2% discount to the dividend adjusted last close and a 7.9% discount to the X dividend adjusted 5-day VWAP. The retail offer allows eligible shareholders to apply for up to $100,000 New Zealand dollars for New Zealand eligible shareholders or $41,000 Australian for those in Australia that are eligible. The retail offer will be set at the lower of the placement price and a 2.5% discount to the 5-day VWAP up to and including the last day of the retail offer period with additional information on the retail offer will be made available once the retail offer opens on the 19th of February. Onto the timetable, the new shares issued under the placement is expected to commence trading on the Friday 20th of February. And as mentioned, the retail offer opens on the 19th of February and due to close on Friday the 6th of March with trading of new shares on both the NZX and the ASX expected to be Monday the 16th of March. As outlined in the NZX release, the board has exercised its discretion to adjust the DP strike price to be the lower of the DP strike price calculated as per the usual DRP methodology, which is the 2% discount and the retail offer price. The DRP strike price will be announced on the 12th of March 2026 and a lotment of new shares is expected to occur on the 25th of March 2026. Okay, look New Zealand's ITO's energy transition continues to create a compelling market opportunity with demand increasing in the market requiring new renewable generation and firming capacity. Contact Context is well positioned as New Zealand's most diversified generator supported by the largest renewable development pipeline in the country. This equity raise of $525 million is expected to advance the execution and potential upsizing of renewable energy projects which accelerate the contact 31 strategy. These investments support meaningful renewable generation growth, expanding our flexibilities and storage and positions us to deliver customer focused solutions as demand evolves. We anticipate making further announcements with respect to the equity rating in accordance with our NZX and ASX continuous reporting obligations. In due course, we will communicate directly with investors with respect to their eligibility to participate in the equity funding raising. We really do appreciate your engagement today and we welcome any questions. Thank you. Thank you. We'll now open to questions starting with questions from the room and then moving to those online. If you wish to ask a question, please raise your hand and this will place you in the queue. When invited to ask your question, you will need to unmute your microphone. I'll open to questions from Andrew Harvey Green for Sidebar. >> Thanks, Sh. Yeah, thanks team uh for that and I guess um quite exciting with equity raisin. I think that all makes sense. I guess my first question though is uh at the investor today it was pretty strong impression that you were trying to get through this period without raising equity. Can you just sort of talk through what's changed in your thinking from late November through to today? >> So that's there's a number of um things there. Um one the upsizing in Tahara 2 we were talking 50 we're now talking 6070 which in and of itself is 130 to $150 million of additional capital. um Laura and um the battery have both happened faster than we anticipated and for instance the battery we're locking in a very sharp um lithium price with Tesla and the um the deal with Forest and Bird was a welcome development just before Christmas. A lot of things seem to happen just before Christmas. But I think more broadly um the point around we premise contact 31 on the red line and you know there is a reasonable potential for the black line to eventuate and take if I take you back to our last equity raising in 2021 when we raised funds for Tohara because we went with the equity raise we were able to fund Tonka 3 without a blink and I think that ability to respond to changing market dynamics and conditions um is absolutely critical at all. >> Yeah, Andrew, we we absolutely could have delivered the contact 31 strategy uh on balance sheet. We're very clear around our expected project costs and the sources and uses of that funding. Um that's effectively a base case. We're thinking about an expected case of outcomes and raising this equity now gives us the ability to meet, you know, higher than trend outcomes and that's why we believe it's a good opportunity for shareholders. Yeah. Um, and I guess kind of linked to all of that, I think slide 27 sort of outlines your list of projects. Um, and I think there's six that you're looking at potentially getting to FID and FY27, which feels quite ambitious. Um, I was totting that up around about a billion dollars of capital assuming all the wind and solar is done on off balance sheet. How much? >> Uh, circa 800 megawatt of capacity plus the battery on top. I >> mean, realistically, how much of that do you think you might be able to get away? And um, and sort of can you sort of talk to I guess the size of that um, opportunity relative to the market? I guess >> I think there's just stepping back um the latest suite of projects glorifi park solar farm would have been able to link to the font the conversion of the font um and it's fair to say that um south and wind projects will have that same linkage back to another discernable event um on the demand side. Um so the geothermal um we've built the execution muscle. They are first class base load projects and the trick there is to maintain that to maintain that muscle and to continue to exercise with a with a with a with a good healthy cadence and running through the excus. Um batteries we'll wait and see. >> Okay. Um, next couple of questions I have I guess is linked to uh I guess the the most recent development in the market which is the LNG announcement from last week. Uh I mean TCC's now being decommissioned. Um my interpretation I guess is that it looks like we need some more gas plant capacity to if if we if it sort of I guess to achieve government's goals of of generating 1.5 terowatt hours over 3 months. Is that consistent with your views? Um and then maybe talk to a little bit around the uh row storage um opportunity as well. >> Okay. So there again let's unpack those questions. I think um the question of additional gas capacity um yes we'll still have our peakers. Um obviously we have the diesel at Fernaki. Um there is also um potential opportunity with behind the meter gas turbines um still in a variety of industrial facilities in New Zealand whether we need more after that and it's another question mindful that um you've got Todd in the Genesis assets as well. AGS is going to be critical to the gas supply market, whether it's indigenous gas or LMG because of its ability to store gas over summer or and store and take gas at volume to be discharged back to the market. So obviously it will play a critical role go forward with or without MG. >> And last question for me is just around I guess the guidance upgrade. Uh this is for you Matt. Um so of the 15 million uh how much would you describe as structural from the first half versus all just oneoff related to favorable operating conditions? >> No no that's all structural. Our uh hydrogeneration even though national conditions were were very over supplied was actually down uh year on year. So it reflects our geothermal capacity and and the acquisition of the mana assets. Um you obviously we're seeing really good price recovery in the retail channel um which is probably tracking you know slightly better than we expected. Um so that gives us the confidence to retain our guidance for the second half of the year. Um noting the market conditions are very volatile out there indeed. So but if it's all structural on the first half and you haven't changed second half assumptions doesn't that imply we've got some structural follow through coming through in the second half as well? >> Well I mean structural is known structural elements as opposed to sort of high performance elements. you know these these things are always we're always looking at the mean hydraological conditions coming to the period. Um you know we don't guide on you know short-term changes to to to hydrarology or short-term changes to storage but you know we come uh well prepared into this financial to this calendar year with with fuel and storage. So >> okay thanks >> thanks Andrew. So we'll open to questions online starting with Vignesh N from UBS. Uh Vignesh if you can unmute and go ahead for your questions. >> Good morning Mike and Matt. Can you hear me? Sure. >> Awesome. Uh congrats on the strong results. Um a couple of questions. First again following from uh you know Andrew on the Gendev pipeline. One thing I noticed was you've pushed Argyle from earliest fed FY26 to earliest Fed FY27. Keen to get a bit more color on this to begin with. Um is is it because the cost of smaller scale farms are just getting too high? Sort of what's driving that? >> Yeah. So um as you'll recall we we had some snafuss uh to use Mike's term around the glor solar farm uh and an appeal to the consent that we achieved there. So we rep prioritized the um pipeline to advance Argal up the up the agenda you know with Glor being a larger scale project uh with better returns you know we have prioritized that project now that we've come I'm free of that um consenting snafu uh and therefore it's just a time and resources and attention question as opposed to economic question very clear um batteries next uh you mentioned a sharp lithium price. Uh Mike, you know, prices have moved a fair bit in the last couple months. Um is is this project uh you know, confirmed today. Should that be read as trough battery capexon? >> Oh, that would require me to be speculate on the lithium price. Um it is significantly lower than our first battery and other batteries being built in the New Zealand market currently. Since then, prices have spiked. Um, so there could be a period where it represents a very sharp price, but that's not to say that lithium prices come down again. So never say never. And I think more broadly, we our teams are continually challenging the costs of the associated works, the transformer switch gear, the civils, and so yeah, that I I would I would not want to speculate on that. It is a sharp price. We're very proud of it. Um but the team will continue to work hard to control costs going forward. >> Just a last question on the gen dev section on on power at stage two. Obviously the increase to 70 potentially megawws. Does that impact the opportunity set for stage three? Um just just keen to get more color on on the size of the field. >> No look stage two is about um using up fair chunk of the remaining resource consent. Stage three will be about um if there is upside potential in the field, we'll have needed additional resource consent for offtake. Um it will be about any neighboring resources as well. So um we don't see it as impacting stage three. Um it's just taking the opportunity of what is available to us now given the favorable reservoir reaction. >> Okay, that's understood. Um sort of last question just on the on the broader market. You know, Transpower last week talked to 700 megawatts of capacity scheduled to be out of the grid in the first half of this calendar year. Your yourself and your peers are still ramping up development. Um sort of are you able to talk about I suppos not not into you 2030 but perhaps in the next three to two to three years. Um sort of >> Yeah. Yeah. Well, FY30 is only um one year out from the next two to three years. So um we'll take take the 3 to 5 terowatt hours which we set out um in the pack as being pretty firm. But there are obviously other opportunities with further potential conversions, potential new industries potential. Yeah, there are a range of opportunities um which would start to move you up towards that black curve. >> Vesh, we've been very clear the pillar of the strategy around wind and solar is connected to demand. um from customers and um the Glor solar farm that we've invested the Kofa Park solar farm that is just there to meet new demand from Fonta coming to market. So you know we uh we're getting the projects prepared uh to be able to meet the demand from customers. This is a demand based strategy. >> Understood. Thanks very for me. We'll now take questions from Grant Swanopole at Jardan. Grant, go ahead. >> Grant, >> good morning team. Um, first question. Have you raised enough capital that we can now create the expectation that by FY28 you can move towards that mid payout ratio of your 4-year trading dividend? Um, hello Grant. Uh, the the primary purpose for the capital raise is effectively to be able to meet the market conditions that we see ahead of us. we see in them is highly conducive. Uh we see lots of customers looking to move off of gas onto electricity and therefore it's around being prepared for above expectations on around the contact 31 pipeline of projects. Uh yeah, as you mentioned when we outlined our pathway to funding those uh development projects on balance sheet, uh we did have some retained earnings through the um through that funding mix and therefore sort of as demand evolves, as the projects become clearer, we'll have a clear view as to you know where in that dividend pad ratio we can expect. But because of the way the projects that are coming to us are, you know, above our target returns, we want to continue to develop those projects to get better long-term outcomes for shareholders rather than just short-term um dividends. >> Well, can I just follow up on that? How your board is thinking? Why would they only raise 525 if they still think that an 80 to 100% payout ratio is reasonable as a dividend policy and not raise enough to make sure you're into the mid part of that payout ratio? I mean the the dividend the dividend payout ratio is a function of um earnings and cash flow delivered through the prior periods and therefore is relatively mechanical. There's been there's been no discussion at the board level about where the most appropriate um target within that range is but you know it'll be set at that specific time. >> Thanks Matt. Um next question just on your battery um growth. So you've got 500 megawatt by 2031, 300 megawatts in the near term and you're pointing to as is the market to about 900 megawatts in the market by 2030. Um does your modeling on on batteries um give you confidence that uh 35 million is a type of return you can make on this 200 megawatt investment? Um, but does that presuppose that your competitors aren't going to push now to just cover their own portfolios and get past that 900? And do you see that fall off quite quickly once you move past 900 by 2030? I think there's a number of dynamics in their grant is 900 was the BCG number um that was put out but remember if we end up with more demand and more intermittent wind and solar being built then obviously as you go up the towards the black curve you're going to need more batteries um and so that dynamic will continue to play out. So um we do see first mover advantage. All the experience overseas is a significant first mover advantage. So we're moving as quickly as we can. Um I can't speculate on what our competitors will be thinking. Um but I think the thing to hold in your mind is that um there could be upside to that if that higher demand scenario comes off. Grant our sort of fundamental belief is that over the medium-term batteries will be required in the market as more intermittent renewables come online and those batteries will have to get a return and we believe participants will act rationally you know with that expectation. Now because we've got a what we believe is a very lowcost battery in the context of the market and a very strong site we think that will be protected under a number of market scenarios but but batteries are quite a useful tool in the toolkit. they um the sources of value from them can change through the cycles, you know, from reserves and uh frequency keeping in the early stages to more, you know, arbitrage as we phase out thermal generation and then later on, you know, in a batteries life, it's going to be able to bring in more uh intermittent renewables. So, you know, from a from a market perspective, we think this is the right asset. Uh and the portfolio benefits that we get from it are just cream on top. >> Fantastic. Thanks Mike and Matt. It's really uh good to see that contact has now continued this continuous performance and we don't get the old contact of always finding some little fault somewhere along the way. Congratulations. Thank you. >> Thanks Grant. We'll take questions from Josh Dale at Craig's Investment Parts. >> Morning Mike Matt. Uh just first two questions relate to the balance sheet. I think I know the answer to this, but in light of wanting to accelerate development timelines, does raising capital change your thinking at all around maybe taking wind and solar developments on balance sheet, even if only initially, to get projects underway. >> We've been delighted with the um it's not just the off balance sheet. The capacity and capability that light source and BP have brought to this country and to us has been fantastic. their supply chain management, their contractor management um has been fantastic. Um when we when we're when we go out looking for a win partner, we're looking for something similar. Yes, we want to take the finance off balance sheet, but we're also looking for um something special. We're looking for the capacity and capability to go faster, build at lower cost, make these projects more economic for all Kiwis. So it's it's not just about so that with in short um wind will be off balance sheet initially. >> Okay. Thanks. And at your investor given your balance sheet constraints at the time you looked at you you talked to looking at hybrids for equity credit. I assume that's off the table now but will still sit as an option. >> Um no no hybrids are still a good uh source of funding. Um obviously we have two hybrids you know currently um issued which provides us with $475 million um of total balance of which we get a 50% equity credit you know throughout the refinancing of these options you can upsize those um so you can get sort of marginally more more equity credits as we mentioned during the uh investor day having you know capacity to to use those types of instruments in an unexpected downside is also valuable and useful. So uh potentially not as much needs to be pulled on those but creating having levers across the DP hybrids uh and retain earnings you know we we see is very valuable because we're not trying to do less here we're trying to do more. So the the baseline is the is the baseline. So we don't expect any less equity required. >> Thanks. And last question, would the development of an LNG terminal raise the prospect of decommissioning Finanaki at all or do you have any thoughts on the future of Fernaki in light of LG? >> No, we're very happy with um for anaki. It serves its purpose for us in terms of the diverse flight portfolio both in terms of location and fuel. Um the LNG terminal is more about um New Zealand Inc. um ensuring the resilience and security of supply for New Zealand. We have the Huntley HFO. We have um the demand flex from major industries like single aluminium smelters. Um we would like to get increased operating ranges on hydros and LG plays into that mix. I don't see it. Um the problem with retiring something like anaki is you take the string away and particularly for periods of stress that's not an appropriate action. Thanks very much Chris. >> Thank you Josh. Uh we'll take questions now from Steven Hudson at McQuary. >> Stephen F. How are you? >> Hi Mike, Matt, and Shelley. Um thanks for the presentation and congratulations on the result. Um most of my questions have been um posed, but um just on the pillar three sort of bucket um uh and the demand sources there. Uh Matt, you sort of alluded to um gas to electricity um migrations as being the key source of demand there. I I would have thought metals might be a little bit more perspective in the near term. I just wondered if you can comment on on that one. >> Um the decline the the the conversion of gas to electricity is a key driver. um metals. Um obviously there's the EAS starting up at New Zealand steel. Um the smelter aluminium prices do appear very strong, but it would be speculation if we put a um marker in the ground on that. What we are what we do see are the facts in front of us. Um and so those sources of new demand I think um we've encapsulated quite well. Yeah, Stephen, it's it's all the usual suspects that we'll be looking at um to bring these projects forward. Really? >> Fair enough. Um and just on um I suppose a longer term horizon just remind me Matt the trigger point at which the credit rating agencies would sort of force you to move any offbalance sheet um PPA offtake on balance sheet. Uh from memory it was sort of 20% of your total total generation might be a trigger point to on balance sheet. So they don't have they don't have a specific trigger, but it does come down to sort of, you know, a few of the elements around how important the contracts are to you and your uh willingness to keep those is sort of off balance sheet vehicles if if they run into trouble, but we're we're very far away from that um at the moment. Um Steven, so nothing to change our strategy around the development of the solar wind projects. >> Would would 20% be a decent sort of threshold to keep in mind? Yeah, seems that seems reasonable. >> Sounds reasonable. >> Okay, useful. Thank you. Um, last one I'll sneak in just on LNG. Um, government would have us believe that um the sort of the triangular form of the trilmma um no longer exists and and they can win on all three fronts with LNG. Um I guess some cynics in the market might sort of think uh that um an improvement in um sustainability and security of supply might come at the cost of of higher price. Where would you be in in this debate? >> I think LG is a security play. um we don't see it materially altering our expectations of price and the modeling because both the Humpy HFO the strategic coal reserve and let's say the smelter demand flex are priced roughly at what landed LNG would probably be dispatched at so we don't see it as price conversation we see it as a security conversation >> but if you if you were to have a conversation about price would you be closer to $200 coal HFO or $300 LG number. >> Well, in that case, you would dispatch the coal first. I think that the whole idea of LNG, it's it's not we're going to undercut coal, never dispatch coal. It will be something's happened in the market, a very dry year, a major asset failure. We need one and a half, 1.2, 1.5 terowatt hours of energy for this winter. and you would bring it in or the gas market has declined faster than expected and you can't fool. So, it's one of those other stress factors. Um, yeah, it's probably the best way. >> Yeah, you have to continue to follow the market signals that are being set for the right generation types um to be built. And you know I think with a combination of all of those sort of backup generation um you know we'll be able to confidently continue to build intermittent renewables. >> Okay. Thanks very much guys. >> Thanks Steven. No more questions from online >> like to close m. >> Okay. Right. With that um I'll just make some concluding remarks. Um thank you everyone for coming on line today. that is appreciated. Um I will note that um obviously the conversations will continue with the announcements today but it is a proud day for contact energy in terms of the FIDs which announced it's a proud day for contact energy in terms of the transformation which has been delivered in terms of mana acquisition um and the delivery of the the synergy benefits and it's a proud day for contact energy in terms of the confidence that we're expressing in the equity rate and our confidence in the New Zealand market and go and the the investment opportunities which are emerging. Thank you again.