Utilities Sector
NZ Energy Generation & Distribution
How They Make Money
Interactive Sankey diagrams showing the financial flow from revenue through operating costs, EBITDAF, and net profit.
Contact Energy (CEN)View Company
FY2025 Financial Flow
Mercury NZ (MCY)View Company
FY2025 Financial Flow
Financial Comparison: CEN vs MCY
Scroll horizontally to see all data
| Metric | CEN | MCY | Difference |
|---|---|---|---|
| Total Revenue | $3,439M | $3,498M | +$-59M |
| EBITDAF | $872M | $786M | CEN +2.9% |
| Depreciation | $273M | $357M | 10.2% vs 7.9%+$84M |
| EBIT | $599M | $429M | CEN +5.1% |
| Net Profit | $331M | $1M | CEN +9.6% |
Revenue Scale
Based on FY2025 reported figures, Contact Energy recorded $3,439M in revenue compared to Mercury NZ's $3,498M.
EBITDAF Margin
Mercury NZ reported an EBITDAF margin of 22.5% compared to Contact Energy's 25.4%, based on FY2025 annual results.
Generation Mix
Both are vertically integrated generators and retailers. Contact Energy operates thermal and renewable assets, while Mercury NZ is predominantly hydro and geothermal.
Depreciation
Depreciation as a percentage of revenue was 10.2% for Mercury NZ and 7.9% for Contact Energy in FY2025.
All Utilities Companies
FAQs About NZX Utilities
What companies are in the NZX Utilities sector?
The NZX Utilities sector primarily consists of electricity generation and distribution companies, including Contact Energy (CEN), Mercury NZ (MCY), Genesis Energy (GNE), Meridian Energy (MEL), and Manawa Energy (formerly Trustpower). These companies generate electricity from renewable sources (hydro, geothermal, wind) and retail it to consumers and businesses across New Zealand.
How do utilities companies make money in New Zealand?
NZX utilities companies generate revenue through two main streams: (1) Electricity generation - selling wholesale electricity to the national grid from their power stations, and (2) Retail operations - selling electricity directly to residential and commercial customers. Most major utilities are vertically integrated, operating both generation assets and retail businesses. They earn profits through the margin between generation costs and retail prices, with profitability influenced by factors like wholesale electricity prices, generation volumes, retail customer numbers, and operational efficiency.
What is EBITDAF in utilities companies?
EBITDAF stands for Earnings Before Interest, Tax, Depreciation, Amortization, and Fair Value movements. It is a profitability metric commonly used by NZ utilities companies to show operating performance before accounting for capital structure, depreciation on generation assets, and fair value changes in financial instruments (such as electricity hedges). EBITDAF margins vary between companies depending on their generation mix and retail exposure.
What is the difference between Contact Energy and Mercury NZ?
Both are vertically-integrated electricity generators and retailers listed on the NZX, but they differ in scale and generation mix. Contact Energy (CEN) has exposure to both thermal generation (gas-fired plants) and renewables, while Mercury NZ (MCY) is predominantly focused on hydro and geothermal generation. Their revenue, EBITDAF margins, and depreciation profiles differ based on their respective asset bases.
What are the dividend characteristics of NZX utilities?
NZX utilities companies have historically paid regular dividends, supported by relatively stable cash flows from electricity generation and retail operations. The sector is capital-intensive, requiring ongoing investment in generation assets, which affects the balance between dividend payments and capital expenditure. Dividend policies vary by company — investors should review each company's dividend history, payout ratio, and stated distribution policy.
How does renewable energy affect utilities profitability?
New Zealand's utilities are predominantly renewable (over 80% of generation from hydro, geothermal, and wind), which provides both advantages and challenges. Renewable generation has lower ongoing fuel costs compared to thermal (gas/coal) generation, improving long-term margins. However, it requires high upfront capital investment, reflected in higher depreciation (around 8-10% of revenue). Hydrology risk significantly impacts profitability - dry years reduce hydro output, forcing companies to buy expensive thermal generation or wholesale electricity. Companies with diverse generation portfolios (hydro + geothermal + wind + gas) can better manage these risks and maintain stable profitability across varying weather conditions.
What factors drive electricity prices in New Zealand?
New Zealand wholesale electricity prices are driven by: (1) Hydrology - rainfall levels affecting hydro generation capacity, (2) Gas prices - influencing thermal generation costs, (3) Demand patterns - seasonal variations and economic activity, (4) Transmission constraints - limitations in moving power between North and South Islands, and (5) Generation outages - planned maintenance or unexpected failures. Retail prices are influenced by wholesale costs plus distribution network charges, metering costs, regulatory levies, and retail margins. The spot market operates with prices set every 30 minutes based on supply-demand balance, creating volatility that utilities manage through hedging strategies.
What is the market capitalization of the utilities sector?
The total market capitalization of the NZX Utilities sector is approximately $39.9 billion, making it one of the larger sectors on the New Zealand stock exchange. This represents the combined value of all publicly-listed electricity generation and distribution companies. The sector's substantial market cap reflects the critical infrastructure these companies operate, their stable revenue streams, and their importance to New Zealand's energy security and decarbonization goals.
Data sourced from NZX company announcements and annual reports. 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.