Contact Energy Profit Jumps as Utility Eyes 250-MW Data Center
Mon, August 10, 2026 at 4:03 AM GMT+3 3 min read
New Zealand utility Contact Energy reported a strong increase in full-year earnings as the Manawa acquisition and higher renewable generation expanded its operating scale, while the company also unveiled plans to explore a major data center development at its former baseload gas-generation site in Stratford.
Contact posted net profit of NZ$423 million for the year ended June 30, 2026, up 62% from an underlying NZ$261 million in the previous year. EBITDAF increased 31% to NZ$1.01 billion, while operating free cash flow rose 49% to NZ$648 million. Revenue, however, slipped 3% to NZ$3.21 billion.
The year-on-year comparison excludes a NZ$98-million release of an onerous gas-storage contract provision that boosted reported FY2025 EBITDAF, making the underlying prior-year figure a more representative comparison.
The acquisition of Manawa Energy, completed in July 2025, added around 2.4 TWh of hydro generation and contracted renewable supply during the year. Contact said it has secured all of the NZ$28 million in annualized cost synergies originally identified from the transaction. Renewable generation also benefited from a full year of production from the Te Huka 3 geothermal plant.
Contact's own generation was 98% renewable in FY2026, up from 88% a year earlier, as thermal generation dropped 79%. The broader New Zealand electricity market was 93% renewable during the financial year amid high hydro inflows and increased renewable capacity.
The company expects normalized and expected FY2027 EBITDAF of about NZ$1.05 billion, assuming average hydro and wind conditions. It also expects to increase its annual dividend to 42 New Zealand cents per share from 40 cents in FY2026.
Alongside its results, Contact said it has partnered with CDC Data Centres to explore construction of a large data center at Stratford in New Zealand's Taranaki region.
The companies intend to seek resource consent for a facility with 250 MW of IT and compute capacity, equivalent to roughly 350 MW of total peak load when ancillary requirements are included. The project remains at an early stage, and neither company has committed to construction. Development would depend on approvals, anchor tenants and financing.
Contact said it intends for the facility's electricity demand to be supplied under long-term contracts supported by new generation from its 11-TWh pipeline of geothermal, wind and solar projects. Co-located battery storage is also planned as part of the concept.
The Stratford site housed Contact's Taranaki Combined Cycle gas plant, which was retired in 2026 after reaching the end of its operating life. The location retains grid infrastructure and has 500 MW of grid-scale battery capacity already consented, while Contact and Lightsource bp are separately progressing a proposed 150-MWac solar project nearby. Contact's existing 200-MW fast-start gas peaking units at Stratford would remain operational.
The data center proposal fits Contact's broader strategy of tying new renewable investment to large, long-duration electricity customers. The company estimates existing and proposed New Zealand data center sites could eventually represent 4–6 TWh of annual electricity demand, alongside growing demand from industrial electrification in dairy and metals.
By Charles Kennedy for Oilprice.com
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