Contact Energy has reported a full-year net profit of over $400 million, alongside plans to explore a potential data centre in Taranaki with the Infratil-backed CDC Data Centres.
Contact is one of the four largest generator-retailers in New Zealand, but is the only major gentailer that doesn’t have a major Government shareholding behind it.
On Monday, Contact revealed its full-year earnings for the year ended June 30, showing the gentailer’s reported net profit reached $423 million, up 27.8%, or $92 million, from a year earlier.
Reported earnings before interest, tax, depreciation, amortisation and fair value adjustments (EBITDAF) came to $1.01 billion, up 15.9% or $139 million, from the 2025 financial year. EBITDAF is used by NZ energy and utility companies to measure core operating cash flow without market-driven value changes.
The acquisition of energy generator Manawa Energy in 2025 contributed to the increase in Contact’s earnings in the 2026 financial year, adding 2.4 terawatt-hours (TWh) in renewable output. One TWh equals one trillion watt-hours of energy. Total renewable output for Contact in the year to June 30 was up 2.9TWh.
Higher renewable output supported increased contracted sales, according to Contact.
Contact chief executive Mike Fuge says the “strong performance” of the combined Manawa and Contact entity has set Contact up well as the gentailer moves ahead with its renewable energy strategy, Contact31+, which is focused on growing geothermal capacity and building into new wind and solar demand.
“I have huge aspirations for New Zealand and the part the renewable energy economy must play in creating jobs, building regional communities, powering manufacturing, attracting new industry, and growing the country’s export earnings,” Fuge says.
Total retail connections reached more than 690,000 across electricity, gas, broadband and mobile, up 50,000 compared to the June 2025 year. Contact says 165,000 households chose discounted or free off-peak energy in the 2026 financial year.
Contact expects low fueling risk for winter 2026 as the June 30 financial year ended with hydro lakes at 135% capacity, gas storage close to capacity and the Genesis coal stockpile at 1,189 kilotonnes (kt), up 70% on the prior year.
The average pricing on sold electricity was at $140 per megawatt-hour (MWh) in the 2026 financial year, which Contact says is 11% lower than $157/MWh in the previous year and reflects the “normalisation of market conditions from a challenging FY25.”
Contract for Difference (CfD) prices were also lower, which was because of generation costs, according to Contact. CfD prices are a long-term financial agreement between a power generator and a buyer that stabilises power sales. The parties decide on a fixed or “strike” price, where if the market price drops below the strike price, the seller receives the difference. However, if prices rise above the strike price, the seller has to pay back the excess amount.
Contact says it also spent less on gas purchases and acquired generation, costs of which were more expensive in FY25 when fuel was scarce.
Contact’s board declared a final dividend of 24 cents per share, taking the annual dividend declared for FY26 to 40 cents per share.
Data centre investment
Contact announced on Monday that the gentailer and large-scale data centre developer CDC Data Centres plan to seek resource consent for a 250 megawatt (MW) data centre. The proposed data centre will be based in Stratford and supported by co-located battery storage development. It will be built near the site of Contact’s Taranaki Combined Cycle gas power plant (TCC), which was decommissioned earlier this year.
Fuge says Stratford provided an “attractive option” for data centre development, with 500 MW of grid-scale batteries already consented and an existing grid connection.
The operation of Contact’s existing 200MW generation assets in Stratford is not impacted by this proposal, according to Contact.
This follows Finance Minister Nicola Willis saying last week that the Ministry of Business, Innovation and Employment (MBIE) officials have advised her they don't expect data centres rolling out over the next 12 months to put upward pressure on electricity prices, given the arrangements they have in place.
Listed infrastructure investment company Infratil holds a 49.7% shareholding in CDC Group Holdings, the parent company of CDC, alongside investment partners Future Fund (34.5%), the Commonwealth Superannuation Corporation (12.0%) and CDC management (3.7%).
1 Comments
Before we get the inevitable posts about Gentailers profiting from high prices because they are holding back investment - the $400 million of profits is essentially matched by the $375 million invested in new generation and batteries this year. Next year they are guiding to over $500 million invested in growth. Their pipeline for new generation totals ~11TWh, roughly equal to their current annual generation, i.e. their pipeline of new generation assets roughly equals the size of the current business, and earlier in the year they raised about $500 million from shareholders to speed up the roll out.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.