Majority government owned gentailers generated nearly $600 million in dividend entitlements for the Government during the June 2026 year as power prices rose

The annual reports of Mercury NZ, Meridian Energy and Genesis Energy show the large profits the state-controlled energy suppliers made in the June 2026 financial year generated almost $600 million in dividend entitlements for the Crown.

The three companies make up the largest electricity generation and retail (gentailer) providers in NZ, alongside Contact Energy. Mercury, Meridian and Genesis are each 51% government owned. Contact is not.

Dividends are a portion of a company’s profits paid out to its shareholders. In the 12 months to June 2026, Mercury’s net profit after tax (NPAT) came to $321 million and its total dividend came to 27 cents per share (cps), up 13% compared to a year earlier.

Meridian’s NPAT came to $130 million while its total dividend was 22.5 cps, rising 7.1% compared to the prior year. Genesis' NPAT was $85 million and its total dividend came to 14.88 cps, up 4% from the 2025 financial year.

Mercury, Meridian and Genesis delivered a total of $1.175 billion in dividends during the June 2026 year, comprising interim and final dividends.

Because the NZ Government holds a 51% legislated shareholding in Mercury, Meridian and Genesis through a mixed ownership model (MOM), the Crown is entitled to roughly $599.5 million of the $1.175 billion in total dividends from the three gentailers.

The Treasury treats dividends from these MOM companies as core government revenue.

The gentailers annual reports for the June 2026 year show the Government’s dividend entitlements are around $196.2 million from Mercury NZ, $303.9 million from Meridian and $99.3 million from Genesis for the 12 months to June 30.

However, those figures are not the actual cash amount the Government receives from each gentailer in dividend revenue. This is because the cash the Crown receives from dividends from Mercury, Meridian and Genesis also depends on the Crown’s participation in these companies’ dividend reinvestment plans (DRPs).

DRPs are used to reinvest cash dividend payouts to buy more shares in the company. Some DRPs offer a small percentage discount on the market price of new shares. Mercury and Genesis are offering discounts on their DRPs for their June 2026 financial years, but Meridian is not.

The Treasury, which monitors the financial performance and governance of MOM companies where the Crown is a 51% shareholder, told interest.co.nz it had forecast an amount it expects to receive in dividends from the three gentailers across the June 2026 year.

This includes interim dividends, which have been paid, and final dividends, which have been declared and are yet to be paid. However, the Treasury said its dividend forecast isn’t publicly available.

“The Crown participates in a Dividend Reinvestment Plan (DRP) across the MOM companies – this ensures the Crown matches the take-up rate of other shareholders, such that the Crown’s shareholding in each of the companies remains constant,” Treasury said.

“The exact mix of cash the Crown receives through final dividends, and new shares issued as a result of the DRP, will not be known for approximately one month, across the three companies.”

Treasury said it was currently unable to confirm the total value of dividends or comment on the calculations made by interest.co.nz from the gentailers’ annual reports.

Energy Minister Simeon Brown did not respond to questions from interest.co.nz about the gentailer dividends, including whether the Crown’s dividend entitlements from Mercury, Meridian and Genesis during the June 2026 year met his expectations and if the dividend revenue from gentailers created a disincentive for the Government to reform the electricity market.

‘A little bit of a cut’

Consumer NZ chief executive Jon Duffy told interest.co.nz that if Mercury, Meridian and Genesis were going to make extremely high profits, it was good that some of those profits filtered back to the Government in the form of dividends.

“So at least the Government gets a little bit of a cut. There is some public good in that,” he said.

“If I was the CEO of a gentailer, I'd be extremely pleased with the way things are operating at the moment because I'm absolutely creaming it. I'm hitting all of my targets to pay dividends to my shareholders, and I'm probably getting a really healthy bonus as the CEO. But across the energy sector, we are seeing growing calls for the Government to show leadership and to step up with an [energy] strategy that has broad-based appeal across the political spectrum.”

Duffy said that while he didn’t think the dividends from Mercury, Meridian and Genesis were inhibiting competition in the electricity market, it might make successive governments reluctant to reform the sector.

“That revenue will be an important part of balancing the Government's books. So there's probably a disincentive to do away with those dividend payments,” he said.

Electricity prices, as measured by Statistics NZ's Consumers price index (CPI), were up 4.4% on a quarterly basis and 12.0% annually in the June quarter. 

“You know, if you're an Energy Minister and a gentailer CEO rolls into your office and says, well, if you do something that interrupts the status quo, we might not be able to guarantee that there won't be blackouts next winter, you're going to sit up and listen to that, aren't you,” Duffy said.

“Because that’s probably the quickest way to annoy your voter base is if you're not supplying electricity. We would say that we accept that obviously a reliable supply of electricity is extremely important, but so is affordability.”

According to a recent report undertaken by Consumer NZ, household electricity costs have risen by around 177% since reforms in 1999 to New Zealand’s electricity industry, nearly twice the rate of inflation. The report found electricity is now approximately 65% more expensive in real terms, even when wage growth is factored in.