Highlights

  • Mercury has guided FY27 EBITDAF of $1.075 billion, up modestly from $1.068 billion in FY26, with an ordinary Dividend forecast at 29.0 cents per share.
  • The Board approved the $506 million Mahinerangi Stage 2 (Puke Kapo Hau) wind farm, which together with Stage 1 will become New Zealand’s largest wind farm at 228MW.
  • Three renewable projects representing roughly $1 billion of Investment are expected to be fully operational by the end of 2026, adding 1.1TWh of annual generation.
  • A 12.7% stake in Datagrid NZ and a 140MW power purchase option agreement position Mercury to capture new electricity Demand from large-scale data centre development.

Mercury NZ (ASX:MCY) is entering FY27 in the midst of its largest renewable investment cycle to date, with new generation capacity coming online, a major new wind farm approved, and an emerging data centre demand opportunity through its stake in Datagrid. The pace at which these projects are delivered — and the demand they help meet — will shape the company’s growth trajectory over the coming years.

New Generation Set to Come Online

Three major projects — the Ngā Tamariki Geothermal Station expansion, Kaiwera Downs 2 Wind Farm and Kaiwaikawe Wind Farm — represent approximately $1 billion of investment and are expected to be fully operational by the end of 2026, adding 1.1TWh of annual renewable generation, equivalent to the electricity needs of around 160,000 homes. Their completion marks the near-term delivery milestone for Mercury’s current investment cycle.

Mahinerangi Stage 2 Is the Next Major Project

Mercury’s Board approved the $506 million Mahinerangi Stage 2 (Puke Kapo Hau) wind farm west of Dunedin in August, with final grid connection studies being completed with Transpower. Combined with Stage 1, the completed Mahinerangi Wind Farm is expected to reach 228MW of capacity and 646GWh of annual generation, making it New Zealand’s largest wind farm — a project that will be a key multi-year build for the company.

Datagrid Stake Opens a New Demand Channel

Mercury’s 12.7% minority stake in Datagrid NZ, alongside a 140MW power purchase option agreement signed in March 2026, positions the company to benefit from a large-scale data centre development in the South Island. Mahinerangi’s additional capacity is specifically positioned to help meet this emerging demand — linking Mercury’s generation build-out directly to a new and potentially significant electricity customer.

FY27 Guidance Reflects a Modest Step Up

Mercury has guided FY27 EBITDAF of $1.075 billion, only modestly above the $1.068 billion achieved in FY26, alongside a forecast ordinary dividend of 29.0 cents per share — which would extend the company’s run of consecutive annual dividend growth to 19 years. That guidance incorporates 4.1TWh of hydro generation expectations and remains subject to hydrological conditions and other unforeseen factors.

What to Watch

Completion of the three near-term renewable projects by the end of 2026, progress on Mahinerangi Stage 2’s grid connection studies, and further developments in the Datagrid relationship are the key catalysts for the stock through FY27.

Conclusion

Mercury NZ’s outlook is defined by an accelerating renewable build-out, headlined by the newly approved Mahinerangi Stage 2 project, alongside an emerging data centre demand opportunity through Datagrid. With FY27 EBITDAF guidance only modestly above FY26 levels, the bigger story for investors is how this investment cycle — and the new demand it is positioned to serve — plays out over the following several years.