Contact Energy (ASX:CEN): How FY26 Renewable Output Supported Earnings Growth

Aditi Sarkar

10 November 2026 09:52 PM AEDT

Contact Energy (ASX:CEN): How FY26 Renewable Output Supported Earnings Growth

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Highlights

FY26 EBITDAF was NZD 1,011 million, up 31% against underlying FY25 earnings.
Reported FY26 net profit was NZD 423 million.
Operating free Cash Flow increased to NZD 648 million in FY26.
The Manawa integration contributed 2.4 terawatt-hours of renewable output in FY26.

Contact Energy Limited generates and retails electricity in New Zealand, with hydro, geothermal and other renewable Assets alongside flexible energy arrangements. Contact Energy (ASX:CEN) shares closed at AUD 7.05 on 10 November 2026. Its FY26 results reflected the integration of acquired renewable assets and additional generation, while ongoing Investment in storage, geothermal and solar projects shapes the next stage of operations.

FY26 Earnings and Cash Flow

Contact reported FY26 EBITDAF of NZD 1,011 million, 31% higher than underlying FY25 EBITDAF of NZD 774 million. This comparison adjusts the prior period for a provision release and therefore differs from a simple comparison with reported FY25 EBITDAF. Net profit reached NZD 423 million, compared with underlying FY25 profit of NZD 261 million. Operating free cash flow was NZD 648 million, up 49% from NZD 434 million. Contact Energy (ASX:CEN) also reported FY26 Revenue of NZD 3,206 million, compared with NZD 3,306 million in FY25 on the results presentation basis. The contrast between revenue and EBITDAF highlights the importance of generation mix, operating costs and the acquired asset contribution when assessing performance.

Manawa Integration and Renewable Supply

The company completed the Acquisition and integration of Manawa Energy, adding approximately 2.4 terawatt-hours of renewable generation and contracted output during FY26. Total renewable output increased by 2.9 terawatt-hours, including power purchase agreements, and renewable sources represented 98% of total output in FY26. Contact Energy (ASX:CEN) also benefited from a full period of generation at its Te Huka 3 geothermal plant. These developments increased Supply available to support contracted sales. However, the acquired Business was included from July 2025, so year-on-year comparisons incorporate a changed asset base rather than purely organic growth. Electricity pricing also shifted: the average price on electricity sold fell to NZD 140 per megawatt-hour from NZD 157 in FY25.

Battery, Geothermal and Solar Investment

Contact’s first 100-megawatt grid-scale battery entered service in 2026, and construction began on another 200-megawatt battery. The company also progressed construction at Te Mihi Stage 2 geothermal and advanced drilling at Tauhara 2. Solar development included commissioning activity at Kōwhai Park and an investment decision for Glorit. Contact Energy (ASX:CEN) must manage the costs and timing of these projects before their expected output can be reflected in operating results. Capital spending was material in FY26: growth Capital Expenditure was NZD 375 million, while stay-in-business capital expenditure was NZD 145 million. Planned or commissioned capacity should not be counted as fully operating generation until commercial milestones are achieved.

Dividends and Operating Risks

Contact declared FY26 dividends totalling NZD 0.40 per share, comprising an interim NZD 0.16 and final NZD 0.24. Its Dividend approach considers operating free cash flow over multiple years, so future payments depend on performance and board decisions. Contact Energy (ASX:CEN) remains exposed to hydrological variability, wholesale electricity pricing, commissioning schedules and capital costs. Its reported FY26 asset base increased following the Manawa acquisition, making financing and integration outcomes relevant to subsequent returns. Monitoring realised renewable output, cash flow after investment and project completion will provide evidence of how the larger portfolio performs under changing market conditions.

Key Insights

FY26 earnings and cash flow benefited from expanded renewable output, but lower realised electricity prices and substantial project investment remain important considerations.

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