Highlights

  • Mercury achieved record hydro generation in July, the highest since 1980, contributing to a 44% year-on-year increase in total Q1 hydro generation to 1,389 GWh.
  • The company commenced a 20-year power purchase agreement with Visy, providing 115 GWh per year during the initial 10-year term.
  • Telecommunications expansion continued with over 150,000 fibre connections added nationwide, pushing fibre-optic broadband uptake to over 94% of total broadband connections.

Mercury NZ Limited (NZX:MCY) has released its quarterly operational update for the three months ending 30 September 2025, covering electricity generation, market conditions, and telecommunications infrastructure progress.

Electricity Generation Performance

During Q1, hydro generation reached record levels for July, the highest since 1980, contributing to total Q1 hydro generation of 1,389 GWh, a 44% increase over the prior corresponding period (PCP). Wind generation totaled 471 GWh, 14% lower than PCP due to below-average wind speeds in July and August. Geothermal output was 691 GWh, slightly above PCP by 8 GWh.

Market Summary

National hydrological inflows were strong, at the 87th percentile, coinciding with lower spot electricity prices averaging $134/MWh in Auckland. Forward electricity prices rose slightly to $182/MWh for financial years 2026–2028 as of 30 September. Total national electricity demand increased 3.5% compared to PCP, driven mainly by industrial demand. New Zealand Aluminium Smelters returned to typical production levels following last year's demand response actions.

Hydro Inflows and Generation

The Waikato catchment received 291mm of rainfall across five significant weather events heading into winter, producing inflows at the 70th percentile. Mercury's AI-powered decision platform, Digital River, contributed to over half of the expected 50 GWh hydro generation uplift for the full year.

Commercial and Industrial Yields

Commercial and industrial yields increased by $6/MWh relative to PCP, supported by contract repricing against a sustained higher electricity forward curve. Mass market yield growth rose by $4/MWh, a 2.6% price increase influenced by customers on legacy pricing.

Long-term Power Purchase Agreement

Mercury commenced a 20-year power purchase agreement (PPA) with Visy, supplying 115 GWh annually over the first 10 years. Management affirmed the arrangement supports Visy's nationwide operations and provides price certainty while advancing Mercury's generation development strategy.

Telecommunications Infrastructure Progress

Mercury achieved more than 150,000 fibre connections nationwide during the quarter. Of its 163,000 broadband connections, over 94% now utilize fibre-optic broadband. A total of 31,000 telco connections were added compared to PCP, although telco revenue per connection decreased due to increased uptake of competitive offerings.

Share Performance of MCY

The company is currently trading at NZD 6.39, down by 0.78%, slightly lower than the pervious close of NZD 6.44