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Contact Energy’s shows solid financial performance and geothermal investment

Contact Energy’s shows solid financial performance and geothermal investment Wairakei geothermal facilities, Taupo/ New Zealand (source: Contact Energy)
Alexander Richter 16 Aug 2021

NZ-based Contact Energy shows a solid financial performance in its annual report and points to increased demand for renewable energy and the company's corresponding geothermal expansion plans.

New Zealand’s largest privately-owned energy company Contact Energy released its full year financial results for the 12 months to 30 June 2021 (‘FY21’) today.

“Contact has performed ahead of expectations after successfully navigating the potential departure of major energy users, short-term issues around low rainfall in the hydro catchments, and ongoing challenges around reliable gas supply.”, so Contact Chair Rob McDonald.  “ FY21 has been a year in which we have continued to deliver solid returns for our shareholders and made significant moves to ensure the company is well-positioned for the future by spending $177m on capital investments.” The results are underpinned by Contact’s “decisive” channel management, as it supported fuel-constrained competitors with its flexible portfolio of gas-fired and renewable assets. Mr McDonald said the company had refreshed its strategy and was on a path to invest to meet the anticipated market growth for low-cost renewable generation.

“Contact is preparing for a time of significant change and is positioned for growth as we focus on leading New Zealand’s decarbonisation. It’s pleasing to see evidence of the strategy in action in significant ways too.“ This includes investigating the potential for hydrogen production in the lower South Island, the development of the world-class Tauhara geothermal power station in the central North Island, and the $400m equity raise for our capital investment programme as we look ahead to further renewable generation developments.” He said it was pleasing to deliver investors a 35 cents per share annual dividend, down slightly from 39 cents per share in FY20.

CEO Mike Fuge said “Contact had undertaken “a significant strategic reset” and the new strategy communicated in the second half of FY21 signalled an exciting new chapter for Contact. “At the heart of this is our commitment to building a better New Zealand by growing demand for renewable electricity, developing our renewable electricity generation options, decarbonising our own portfolio and creating outstanding experiences for our customers.” He said the company had hit the ground running in terms of delivering on the strategy. “We’re obviously very excited about the development under way at Tauhara, but it does not stop here. The capital raise gives us the flexibility to execute on up to $800m of additional projects and we are actively looking at how we can bring more geothermal development forward in response to customer demand for our renewable electricity. ”

Note: the currency here refers to NZ dollars.

Source: Company release