Mercury NZ FY26 EBITDAF NZ$1,068m, Dividend 27.0 NZ Cents

Mercury (ASX:MCY) NZ reported results for the year ended 30 June 2026, with all figures expressed in New Zealand dollars. Revenue from continuing operations was NZ$3,224 million, down 8% on FY25. Net profit after tax was NZ$321 million, NZ$320 million higher than FY25, which Mercury said reflected higher EBITDAF partly offset by non-cash movements in the fair value of electricity derivatives. EBITDAF, which Mercury defines as earnings before net interest expense, tax expense, depreciation, amortisation, change in the fair value of financial instruments, gain on sale, impairment and revaluation losses, was NZ$1,068 million, NZ$282 million or 36% higher than FY25 and NZ$68 million above initial full-year guidance. Mercury attributed the operating earnings result to higher hydro generation, new renewable generation and lower operating costs from ongoing productivity initiatives, and said it achieved its operating costs target of NZ$370 million. Operating cashflow was NZ$762 million, net tangible assets were NZ$3.62 per share against NZ$3.41 a year earlier, and the S&P adjusted debt-to-EBITDA ratio was 2.0 times. Chief Executive Stew Hamilton said the company is converting strong financial performance into new generation, greater system resilience and the capacity to support New Zealand's future economic growth.

Mercury declared a fully imputed final dividend of 17.0 New Zealand cents per share, taking the FY26 ordinary dividend to 27.0 New Zealand cents per share, 3 cents higher than FY25 and what the company described as the 18th consecutive year of ordinary dividend growth. The final dividend carries a record date of 3 September 2026 and a payment date of 30 September 2026, with the dividend reinvestment plan offered at a 2% discount. The company reinvested 66% of FY26 EBITDAF, or NZ$710 million, in new and existing renewable generation assets, and stay-in-business capital expenditure was NZ$150 million. Generation commenced during 2026 at the Ngā Tamariki geothermal station expansion near Taupō, Kaiwera Downs 2 Wind Farm near Gore and Kaiwaikawe Wind Farm near Dargaville, projects representing around NZ$1 billion of investment and 1.1 TWh of additional annual renewable generation, all of which are expected to be fully operational by the end of 2026. In August the Board approved the NZ$506 million Puke Kapo Hau (Mahinerangi Stage 2) Wind Farm west of Dunedin, with final grid connection studies being completed with Transpower; Mahinerangi Stages 1 and 2 are expected to total 228 MW of capacity and 646 GWh of annual generation. For FY27 Mercury guided to EBITDAF of NZ$1,075 million, which it said reflects new generation, continued cost discipline and 4.1 TWh of hydro generation, and to a dividend of 29.0 New Zealand cents per share. Mercury said guidance may change and remains subject to material events, significant one-off expenses or other unforeseen circumstances including changes to hydrological conditions.