New Zealand utility giant Contact Energy reported a 62% jump in net profit to NZ$423 million for the fiscal year ending June 30, 2026, driven by the strategic acquisition of Manawa Energy and a significant expansion in renewable power generation, while simultaneously announcing plans to develop a 250-MW data center at its former gas-generation site in Stratford.
Financial Performance and Operational Growth
Contact’s impressive financial showing included a 31% rise in EBITDAF to NZ$1.01 billion and a 49% increase in operating free cash flow, reaching NZ$648 million. While total revenue dipped 3% to NZ$3.21 billion, the company highlighted that the year-on-year comparison excludes a one-off NZ$98-million adjustment from a prior gas-storage contract, providing a clearer view of underlying growth.
The integration of Manawa Energy, finalized in July 2025, proved pivotal, contributing approximately 2.4 TWh of hydro generation and renewable supply. Contact confirmed that it has successfully captured all NZ$28 million in projected annual cost synergies from the deal, further bolstered by a full year of production from the Te Huka 3 geothermal facility.
Shift Toward Renewable Dominance
The utility’s transition away from fossil fuels accelerated sharply in FY2026, with 98% of its own generation derived from renewable sources, up from 88% the previous year. Thermal generation plummeted by 79% as the broader New Zealand market benefited from high hydro inflows and increased renewable capacity.
Looking ahead, Contact projects a normalized FY2027 EBITDAF of approximately NZ$1.05 billion, assuming standard wind and hydro conditions. Consequently, the company intends to raise its annual dividend to 42 New Zealand cents per share, up from 40 cents in FY2026.
Strategic Data Center Ambitions
In a major diversification move, Contact has partnered with CDC Data Centres to explore the construction of a massive data center in the Taranaki region. The proposed facility targets 250 MW of IT and compute capacity, which would require roughly 350 MW of total peak load.
While the project remains in the early conceptual stage—contingent upon resource consents, anchor tenants, and final financing—the site offers unique advantages. Located at the former Taranaki Combined Cycle gas plant, the site retains essential grid infrastructure and already holds consent for 500 MW of grid-scale battery storage. Additionally, Contact is collaborating with Lightsource bp on a nearby 150-MWac solar project.
The data center initiative aligns with Contact’s long-term strategy to pair new renewable investments with large-scale, high-demand customers. The company estimates that the emerging data center sector, coupled with industrial electrification in the dairy and metals industries, could represent 4–6 TWh of new annual electricity demand in New Zealand.
The site’s existing 200-MW fast-start gas peaking units will remain in operation to support grid stability as the company continues to develop its 11-TWh pipeline of geothermal, wind, and solar projects.