Mercury Energy\u2019s annual profit has rebounded into much sunnier territory after a bruising period last year.<\/p>\n
The state-controlled power generator and retailer (gentailer) reported annual net profit after tax of $321 million for the June year on Tuesday. It’s a $320 million increase from the 2025 financial year, when Mercury reported just $1 million profit due to challenging financial, hydro and gas conditions.<\/p>\n
New renewable generation, higher hydro generation and \u201cdisciplined cost management\u201d were cited as the reasons for the significant turnaround.<\/p>\n
Mercury chief executive Stew Hamilton said Mercury was converting the company\u2019s strong financial performance into \u201cnew generation, greater system resilience and the capacity to support New Zealand\u2019s future economic growth.\u201d<\/p>\n
Mercury\u2019s generation assets produce electricity from 100% renewable sources like hydro, geothermal and wind and the company is also a retailer of electricity, gas, broadband and mobile services.\u202f<\/p>\n
Total operating earnings or EBITDAF (earnings before interest, tax, depreciation, amortisation, and fair value adjustments) came to $1.068 billion in the 2026 financial year, up 36%, or $282 million, compared to the previous year.<\/p>\n
The company reinvested 66%, or $710 million, of its 2026 operating earnings into new and existing renewable generation assets.<\/p>\n
Operating cashflow of $762 million helped fund this investment while maintaining a strong balance sheet and \u201cprogressive\u201d shareholder returns, Mercury said. Operating cashflow was up 58%, or $279 million, from the previous year.<\/p>\n
Operating expenses fell 6.6%, or $26 million, to $370 million during the 2026 financial year, while capital expenditure rose 46%, or $225 million, to $710 million.<\/p>\n
Mercury\u2019s board announced a total dividend of 27.0 cents per share (cps), up 3 cps from a year ago.<\/p>\n
Mercury currently expects total operating earnings or EBITDAF to reach $1.075 billion in the 2027 financial year, alongside a total dividend of 29 cents per share.<\/p>\n
Consumers struggling<\/p>\n
Data from the Electricity Authority puts Mercury down as New Zealand\u2019s largest power provider<\/a> by retail market share.\u00a0<\/p>\n In a report released in July called Power. At what cost?, Consumer NZ found a quarter of households have had trouble paying their power bills in the last year, a 5% increase from a year earlier.<\/p>\n Electricity prices have risen by around 177%<\/a> since 1999 reforms to NZ\u2019s electricity industry, according to the consumer advocacy group.\u00a0<\/p>\n Consumer NZ said even when wage growth was factored in, electricity is now approximately 65% more expensive in real terms, with low-income families hit the hardest.<\/p>\n Renewable projects<\/p>\n Generation has commenced at three of Mercury\u2019s renewable projects in 2026, with all three expected to be fully operational by the end of this calendar year. The projects are Ng\u0101 Tamariki Geothermal Station expansion near Taup\u014d, Kaiwera Downs 2 Wind Farm near Gore, and Kaiwaikawe Wind Farm near Dargaville.\u00a0<\/p>\n Mercury said these projects represent around $1 billion of investment and 1.1 terawatt-hours (TWh) of additional annual renewable generation. This is enough to power around 160,000 homes.<\/p>\n The next energy development out of Mercury will be Puke Kapo Hau, also known as the Mahinerangi Stage 2 Wind Farm, west of Dunedin. Mercury\u2019s Board approved the $506 million project in August, with final grid connection studies being completed with Transpower.\u00a0<\/p>\n The Mahinerangi Wind Farm (Stages 1 and 2) is expected to be New Zealand\u2019s largest wind farm once complete, with 228 megawatts (MW) total capacity and annual generation of 646 gigawatt-hours (GWh). This is enough electricity to power roughly 80,000 to 90,000 households each year.<\/p>\n Mercury said Puke Kapo Hau will support South Island energy demand, including for Datagrid, the country\u2019s first \u2018AI factory\u2019, which Mercury describes as the \u201cmost advanced large-scale data centre project\u201d in New Zealand. Mercury announced the signing of a 140MW power purchase option agreement with Datagrid earlier this year and also acquired a 12.7% stake in the \u00a0Singapore-based company for $53 million in July<\/a>.<\/p>\n \u201cDatagrid shows how long-term demand, renewable development and disciplined investment can work together,\u201d Hamilton said.<\/p>\n Hamilton was appointed as a director of Datagrid NZ as part of the investment.<\/p>\n New rules for power companies, including the Government-backed ones<\/p>\n Just minutes before Mercury\u2019s 2026 financial results were published on Tuesday, Energy Minister Simeon Brown announced recent changes by the Electricity Authority will now require power companies to regularly check that customers \u201care on the best plans for their circumstances.\u201d<\/p>\n Brown said the Electricity Authority will also ban power companies from doing \u201cbig chargebacks\u201d for power bills dating back more than six months.<\/p>\n \u201cFrom time to time you hear horror stories of people being sent a massive bill because for one reason or another they have not been receiving accurate and timely bills. Catch-ups will be limited to six months under the new rules, reducing the risk of \u2018bill shock\u2019,\u201d he said.<\/p>\n All power companies have been given a deadline of April 1, 2027 to fully comply with the new rules. Brown did not disclose in his announcement what penalties power companies would face if they failed to comply with the new rules.<\/p>\n The Government holds a legislated 51% majority shareholding in Mercury, Meridian Energy and Genesis Energy. Mercury, Meridian and Genesis make up three out of the four largest power generators and retailers (gentailers) in NZ, along with Contact Energy. Contact has no Government shareholding but is one of the country\u2019s largest listed companies on the NZX.<\/p>\n