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Highlights

  • In FY24, the company reported net profit of NZD 235 million.
  • CEN achieved a 32% reduction in thermal emissions intensity in FY24; aims for net zero emissions from generation by 2035.
  • Recently, the company signed a contract with OMV for Pohokura gas supply (2026–2032).

Contact Energy Limited (NZX:CEN), a prominent energy generator and retailer in New Zealand, is making significant strides in decarbonisation with a strong focus on renewable energy projects. The company aims to operationalise over 200MW of newly constructed geothermal power stations within the next 12 months and expand its portfolio of renewable energy initiatives under its Contact26 strategy.

Financial Highlights FY2024

Contact Energy reported a net profit of NZD 235 million for FY24, alongside operating earnings (EBITDAF) of NZD 675 million. These figures include an NZD 12 million net movement in the provision related to the Ahuroa Gas Storage (AGS) facility’s onerous contract (NZD 5 million reflected in net profit). Excluding this adjustment, underlying net profit rose 9% year-on-year to NZD230 million, while underlying EBITDAF increased 16% to NZD663 million.

The operational performance was driven by better alignment of channel pricing with the wholesale market and enhanced thermal efficiency. However, this was partially offset by reduced steam revenue and lower hydro generation following the Te Rapa closure in June 2023.

Sector Outlook

New Zealand’s energy landscape relies heavily on renewable resources, including hydro, geothermal, wind, and bioenergy. Notably, nearly one-third of the New Zealand’s electricity demand stems from households, with another third attributed to industrial sectors. The government’s energy strategy emphasises transitioning to a net zero carbon economy by 2050.

Commitment to Sustainability:

Contact Energy reported a 32% reduction in emissions intensity from thermal generation in FY24, driven by the closing of the Te Rapa facility. The company remains steadfast in its goal to achieve net zero emissions from generation activities by 2035.

Recent business update

Recently, the company has signed a contract with OMV for natural gas supply from January 2026 to December 2032, from Pohokura field. Under the contract, the forecasted volume for the initial 12 months is approximately 3.5PJ, with annual volumes expected to decline over the term of the agreement.  

The implied short-run marginal cost (including gas and carbon) exceeding NZD 200/MWh for electricity generated by the Stratford peaking units. Additionally, fixed operating costs for running the peakers are expected to amount to approximately NZD 50 million annually.

Share performance of CEN

CEN shares closed 0.11% higher at NZD 9.48 per share on 23 January 2025. Over the past year, CEN’s share price has increased by nearly 15.20%, and in the last three months, it has gained 9.30%.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 23, 2025. The reference data in this report has been partly sourced from EODHD/Others.