Full Year 2026 Meridian Energy Ltd Earnings Call

August 25, 2026

Speaker #2: Jonah Coto, good morning everyone, and thank you for joining us for Meridian Energy's results announcement for the financial year ended 30 June 2026. I'm Mike Roan, Meridian's Chief Executive, and with me today is our Chief Financial Officer, Mandy Binney.

Mike Roan: Tena koutou, good morning, everyone, and thank you for joining us for Meridian Energy's results announcement for the financial year ended 30 June 2026. I am Mike Roan, Meridian's Chief Executive, and with me today is our Chief Financial Officer, Mandy Binney. A year ago, I presented a result that reflected some very challenging market conditions. At the time, I said I remain confident in Meridian's future and in our ability to grow the business, support the economy, and deliver value for shareholders. This past year demonstrates why. We delivered a strong financial result. As importantly, the business is stronger, more resilient, and better positioned to create value. The foundations we have put in place give me confidence that Meridian can continue creating value as wholesale prices normalize, business electricity prices fall, and electricity price increases for households begin to moderate.

Speaker #2: A year ago, I presented a result that reflected some very challenging market conditions. At the time, I said I remained confident in Meridian's future and in our ability to grow the business, support the economy, and deliver value for shareholders.

Speaker #2: This past year demonstrates why. We delivered a strong financial result, and as importantly, the business is stronger, more resilient, and better positioned to create value.

Speaker #2: The foundations we put in place give me confidence that Meridian can continue creating value as wholesale prices normalize, business electricity prices fall, and electricity price increases for households begin to moderate.

Speaker #2: Financial outcomes matter because they tell us whether we're creating value, but they're not the entire story. The broader story is the improvement in Meridian's underlying capability, some of the most significant elements of which are captured on this slide.

Mike Roan: Financial outcomes matter because they tell us whether we are creating value. They are not the entire story. The broader story is the improvement in Meridian's underlying capability, some of the most significant elements of which are captured on this slide. Over the last year, the Meridian team has focused on increasing the flexibility of our generation portfolio, supporting customers, and continuing to build and execute a high-quality development pipeline. We increased our hydro storage by 20%, secured a further 35-year consent for the Waitaki Power Scheme, added 30 megawatts of hydro capacity, improved hydro availability, expanded our development options, grew our customer base, and extended our EV charging network. At the same time, Dow Jones recognized Meridian as one of only 10 utilities globally, and the only utility in our region included in its best-in-class world index.

Speaker #2: Over the last year, the Meridian team has focused on increasing the flexibility of our generation portfolio, supporting customers, and continuing to build and execute a high-quality development pipeline.

Speaker #2: We increased our hydro storage by 20%, secured a further 35-year consent for the Waitaki Power Scheme, added 30 megawatts of hydro capacity, improved hydro availability, expanded our development options, grew our customer base, and extended our EV charging network.

Speaker #2: At the same time, Dow Jones recognized Meridian as one of only 10 utilities globally—and the only utility in our region—included in its best-in-class World Index.

Speaker #2: I'll return to many of these achievements throughout the presentation. But first, I'd like to talk about our people. No business outcome happens on its own.

Mike Roan: I will return to many of these achievements throughout the presentation, but first I would like to talk about our people. No business outcome happens on its own. It is the product of the people who come to work every day and make Meridian what it is. As the slide shows, Meridian continues to attract people who are highly motivated, effective, and committed to our purpose. Despite significant change across the business during the past year, staff engagement has continued to improve. That is pleasing, but it also comes with a responsibility on leaders, including me, to keep raising the bar on what good looks like, and we will. Our development program continues to grow, and with it, the risk profile of the business. More construction, more contractors on site, and more field-based work all increase the importance of getting health and safety right.

Speaker #2: It's the product of the people who come to work every day and make Meridian what it is. As the slide shows, Meridian continues to attract people who are highly motivated, effective, and committed to our purpose.

Speaker #2: Despite significant change across the business during the past year, staff engagement has continued to improve. That's pleasing, but it also comes with a responsibility on leaders, including me, to keep raising the bar on what good looks like.

Speaker #2: And we will. Our development program continues to grow, and with it, the risk model of the business. More construction, more contractors on site, and more field-based work all increase the importance of getting health and safety right.

Speaker #2: Meridian's culture gives me confidence that our people feel empowered to slow work down, or stop it, if conditions warrant. What concerns me is that this culture is not yet coming through to our contractors as consistently as it should.

Mike Roan: Meridian's culture gives me confidence that our people feel empowered to slow work down or stop it if conditions warrant. What concerns me is that this culture is not yet going through to our contractors as consistently as it should. Our injury statistics reflect that. I regularly tell contractors the same thing I tell our own people. When you are operating on site, it does not matter what badge you are wearing, you are one of our team, and the expectations and standards are the same. Our focus is on better contractor induction, clearer site communication, and stronger critical controls. Of all the responsibilities I have as Chief Executive, keeping people safe remains the most important. The regulatory and political environment remains fluid, and many of the larger policy decisions will be influenced by the outcome of the election. Investors generally dislike uncertainty.

Speaker #2: And our injury statistics reflect that. I regularly tell contractors the same thing I tell our own people: when you're already on site, it doesn't matter what badge you're wearing—you are one of our team.

Speaker #2: And the expectations and standards are the same. Our focus is on better contractor induction, clearer site communication, and stronger critical controls. Of all the responsibilities I have as Chief Executive, keeping people safe remains the most important.

Speaker #2: The regulatory and political environment remains fluid, and many of the larger policy decisions will be influenced by the outcome of the election. Investors generally dislike uncertainty.

Speaker #2: Fortunately, Meridian only has two significant near-term capital allocation decisions: the refurbishment of Waitaki Power Station, and Mount Monroe Wind Farm in the wider Upper.

Mike Roan: Fortunately, Meridian only has two significant near-term capital allocation decisions: the refurbishment of Waitaki Power Station and Mt Munro Wind Farm in the Wairarapa. The first is relatively straightforward. The second will be considered by the board in December, by which time we should have a clearer view of the policy environment. The key regulatory matters affecting the business are set out on this slide as well. While the eventual shape of the LNG proposal and the Winter Energy Reliability Obligation remain unclear, the Electricity Authority's level playing field regime is now in force. Meridian's first Retail Price Consistency Assessment will be submitted in September. Last year, Meridian's retail business recorded an EBITDAF loss again. As captured in a later slide, that outcome reflected retail prices not moving as quickly as wholesale costs.

Speaker #2: The first is relatively straightforward. The second will be considered by the Board in December, by which time we should have a clearer view of the policy environment.

Speaker #2: The key regulatory matters affecting the business are set out on this slide as well. While the eventual shape of the LNG proposal and the Winter Energy Reliability Obligation remain unclear, the Electricity Authority's level playing field regime is now in force.

Speaker #2: Meridian's first retail price consistency assessment will be submitted in September. Last year, Meridian's retail business recorded an EBITDAF loss again. As captured in a later slide, that outcome reflected retail prices not moving as quickly as wholesale costs.

Speaker #2: As wholesale prices have now returned to levels that reflect the long-run cost of new investment, over time, I expect retail profitability to normalize. The authority will form its own view on that relationship.

Mike Roan: As wholesale prices have now returned to levels that reflect the long-run cost of new investment, over time, I expect retail profitability to normalize. The Authority will form its own view on that relationship. Our job is to apply the rules properly while making sure sensible pricing decisions are made for customers. Before moving on, I want to acknowledge the government's progress on fast-track consenting and broader resource management reform. We talk a lot about affordability, security, and decarbonization. None of those things happen unless projects get built. New Zealand has no shortage of renewable resources. Often the challenge has been gaining timely consents to make the best use of them. These reforms are helping address that problem and, in my view, will make a meaningful difference to the pace at which the country can electrify and grow.

Speaker #2: Our job is to apply the rules properly while making sure sensible pricing decisions are made for customers. Before moving on, I want to acknowledge the government's progress on fast-track consenting and broader resource management reform.

Speaker #2: We talk a lot about affordability, security, and decarbonization, but none of those things happen unless projects get built. New Zealand's got no shortage of renewable resources.

Speaker #2: Often, the challenge has been gaining timely consents to make the best use of them. These reforms are helping address that problem and, in my view, will make a meaningful difference to the pace at which the country can electrify and grow.

Speaker #2: Now, there isn't really a great deal to say on this slide, which is exactly what you want from projects under construction. Ruakaka and Tarahui remain on schedule.

Mike Roan: There is not really a great deal to say on this slide, which is exactly what you want from projects under construction. Ruakākā and Te Rāhui remain on schedule, costs remain well controlled, and Tauhei is a little ahead of schedule. As you can see, we are taking a diversified approach to funding solar development. Ruakākā is on balance sheet, Te Rāhui is project financed, and Tauhei is purchase. We do like solar as part of the portfolio, but diversity of funding and structuring seems important as we observe its impact. One thing not on the slide is the role that solar can play in reducing dry year risk. As droughts generally coincide with periods of high sunshine and low rainfall, the more solar generation there is in the system, whether utility scale or behind the meter, the less pressure there is on hydro storage during those periods.

Speaker #2: Costs remain well controlled, and Tauhei is a little ahead of schedule. As you can see, we're taking a diversified approach to funding solar development.

Speaker #2: Ruakaka's on balance sheet, Tarahui is project-financed, and Tauhei is purchased. We do like solar as part of the portfolio, but diversity of funding and structuring seems important as we observe its impact.

Speaker #2: One thing not on the slide is the role that solar can play in reducing dry year risk. As droughts generally coincide with periods of high sunshine and low rainfall, the more solar generation there is in the system—whether utility scale or behind the meter—the less pressure there is on hydro storage during those periods.

Speaker #2: Solar, therefore, does more than add generation. It can help preserve water when water is most valuable. And early analysis suggests that benefit may be meaningful.

Mike Roan: Solar, therefore, does more than add generation. It can help preserve water when water is most valuable. Early analysis suggests that benefit may be meaningful. While the work is not yet complete, it reinforces our view that continued solar development can improve system security while benefiting Meridian and electricity consumers. We will share more on that work at our interim results. The Ruakākā battery is a good example of successful electrification. It improves security, lowers system costs, enables greater use of renewable generation, and creates value at the same time. It has done this by improving HVDC transfers, value capture during volatile market conditions, and improved efficiency across the electricity system. Starting with the top right graph, the battery has supported higher levels of HVDC transfer. As you can see, since the Ruakākā battery was commissioned, transfers above 100 megawatts have become a new normal for the market.

Speaker #2: While the work is not yet complete, it reinforces our view that continued solar development can improve system security while benefiting Meridian and electricity consumers.

Speaker #2: We'll share more on that work at our results. The Ruakaka batteries are good examples of successful electrification. It improves security, lowers system costs, enables greater use of renewable generation, and creates value at the same time.

Speaker #2: It's done this by improving HVDC transfers, capturing value during volatile market conditions, and increasing efficiency across the electricity system. Starting with the top right graph, the battery has supported higher levels of HVDC transfer.

Speaker #2: As you can see, since the Ruakaka battery was commissioned, transfers above 700 megawatts have become a new normal for the market. That additional transfer capability allows more renewable energy from the Waitaki and Waiau catchments to reach North Island customers, and it reduces the reliance we would otherwise have on thermal generation in the North Island.

Mike Roan: That additional transfer capability allows more renewable energy from the Waitaki and Waiau catchments to reach North Island customers, and it reduces the reliance we would otherwise have on thermal generation in the North Island. Second, the battery is capturing value during periods of extreme price volatility. The bottom right graph shows that. Our trading systems are highly automated, and the battery increasingly optimizes between energy dispatch and reserve services in real time. Third, the North Island to South Island futures price differential has narrowed materially since the announcement. That improves South Island price capture and reduces the cost of hedging our North Island customer base. Encouragingly, these benefits are not just limited to Meridian. They also support the wider electricity system. We saw that between 4 and 7 August. During record electricity demand, the system continued to perform despite Huntly 5 being unavailable.

Speaker #2: Second, the battery is capturing value during periods of extreme price volatility. The bottom right graph shows that. Our trading systems are highly automated, and the battery increasingly optimizes between energy dispatch and reserve services in real time.

Speaker #2: Third, the North Island to South Island futures price differential has now changed materially since the announcement. That improves South Island price capture and reduces the cost of hedging our North Island customer base.

Speaker #2: Encouragingly, these benefits are not just limited to Meridian. They also support the wider electricity system. We saw that between the 4th and 7th of August, during record electricity demand, the system continued to perform despite Huntly 5 being unavailable.

Speaker #2: Ruakaka was one of several assets supporting system security, and demonstrating how a more renewable electricity system can operate reliably. There are two key points on this slide.

Mike Roan: Ruakākā was one of several assets supporting system security and demonstrating how a more renewable electricity system can operate reliably. There are two key points on this slide. First, any major investment decision we make over the next 12 months will largely affect 2029 and beyond. That is the reality of developing and constructing large-scale renewable assets. Second, we now have multiple credible development options in front of us. That means we can remain disciplined and allocate capital only where and when returns justify the risk, and the use of capital is attractive relative to other opportunities. Looking across the portfolio, and as summarized on the bottom graph, Mt Munro is a quality asset. In a material change to our market or policy conditions, it remains on track for a final investment decision in December. Te Rere Hau is arguably a high-quality asset again.

Speaker #2: First, any major investment decision we make over the next 12 months will largely affect 2029 and beyond. That’s the reality of developing and constructing large-scale renewable assets.

Speaker #2: Second, we now have multiple credible development options in front of us. That means we can remain disciplined and allocate capital only where and when returns justify the risk, and the use of capital is attractive relative to other opportunities.

Speaker #2: Looking across the portfolio, and as summarized on the bottom graph, Mount Monroe is a quality asset. Even during a material change to our market or policy conditions, it remains on track for a final investment decision in December.

Speaker #2: Te Ririho is arguably a higher-quality asset again. Outstanding issues I discussed at interims have been worked through. The wind farm is shaping up as a strong candidate for an investment decision in the third quarter of 2027.

Mike Roan: Outstanding issues I discussed at interims have been worked through. The wind farm is shaping up as a strong candidate for an investment decision in Q3 2027. At interims, I said that Te Rāhui stage 2 would be ready for an investment decision within 12 months. That remains the case. Being ready to decide, however, is different to being ready to commit capital. While its economics remain attractive, it represents a meaningful increment of new solar generation. Therefore, before committing, I want confidence in sustained demand growth or a customer arrangement that supports the investment. The Ruakākā battery has also demonstrated the value that an integrated energy park can create. Combining generation and storage alongside our existing portfolio is proving more valuable than we originally expected. As a result, I have asked the team to look closely at how we might accelerate the development of the Bunnythorpe Energy Park.

Speaker #2: At interims, I said that Tarahui Stage Two would be ready for an investment decision within 12 months. That remains the case. Being ready to decide, however, is different from being ready to commit capital.

Speaker #2: While its economics remain attractive, it represents a meaningful increment of new solar generation. Therefore, before committing, I want confidence in sustained demand growth or a customer arrangement that supports the investment.

Speaker #2: The Ruakaka battery has also demonstrated the value that an integrated energy park can create. Combining generation and storage alongside our existing portfolio is proving more valuable than we originally expected.

Speaker #2: As a result, I've asked the team to look closely at how we might accelerate the development of the Bunnythorpe Energy Park. Few companies can combine batteries with more than 12,000 gigawatt-hours of South Island hydro generation and a large North Island customer base.

Mike Roan: Few companies can combine batteries with more than 12,000 gigawatt-hours of South Island hydro generation and a large North Island customer base. We can, and we are becoming increasingly confident about the value of that combination. The final project worth mentioning is one of our oldest assets. Waitaki Power Station turns 91 this year, and next month we expect to reach a final investment decision on a major repowering and uplift project. Waitaki has served the country exceptionally well over many decades. This investment ensures that it will continue doing so while improving its performance and value. As the market evolves, many developers are seeking to align new generation directly with new load, whether that is a data center, an industrial customer, or another electricity user. We will do that in some cases, and I have already touched on at least one example of where that might occur.

Speaker #2: We can, and we are becoming increasingly confident about the value of that combination. The final project worth mentioning is one of our oldest assets.

Speaker #2: Waitaki Power Station turns 91 this year, and next month we expect to reach a final investment decision on a major repowering and uplift project.

Speaker #2: Waitaki has served the country exceptionally well over many decades. This investment ensures that it will continue doing so, while also improving its performance and value.

Speaker #2: As the market evolves, many developers are seeking to align new generation directly with new load, whether that's a data center, an industrial customer, or another electricity user.

Speaker #2: We'll do that in some cases, and I've already touched on at least one example of where that might occur. Our preferred broad approach, however, is to grow generation and customers together.

Mike Roan: Our preferred broad approach, however, is to grow generation and customers together. As you can see from the graph on the slide, the level of customer sales currently exceeds our optimal market position. As a result, we buy contracts to cover the difference. However, when Ruakākā and Mt Munro come online, the volume of North Island hedge purchases required to support our customer book will reduce, and those projects are needed. While the sales position looks flat, we expect our customer book will grow to 500,000 and then 600,000 customers before 2030. Our development projects can therefore create value as standalone investments and as part of the wider Meridian portfolio. This approach maintains development discipline, reduces our reliance on external hedge markets, and creates greater resilience if wholesale prices fall materially.

Speaker #2: As you can see from the graph on the slide, the level of customer sales currently exceeds our optimal market position. As a result, we buy six contracts to cover the difference.

Speaker #2: However, when Ruakaka and Mount Monroe come online, the volume of North Island hedge purchases required to support our customer book will reduce. And those projects are needed.

Speaker #2: While the sales position looks flat, we expect our customer book will grow to 500,000 and then 600,000 customers before 2030. Our development projects can therefore create value as standalone investments and as part of the wider Meridian portfolio.

Speaker #2: This approach maintains development discipline, reduces our reliance on external hedge markets, and creates greater resilience if wholesale prices fall materially. We don't need every project to be tied to a single customer, nor do we want every project fully exposed to the merchant market.

Mike Roan: We don't need every project to be tied to a single customer, nor do we want every project fully exposed to the merchant market. The right position sits somewhere in between. This slide updates the one presented at our interim results with the important addition of the storage now available at Lake Pukaki. The key point is not simply that Meridian has more risk management volume available than it did in the 2025 financial year. The portfolio is now considerably broader and more diverse and more flexible. Compared with back then, the volume of available risk management options has roughly doubled. It is diversified across different mechanisms, counterparties, and fuel sources. A greater proportion is now controlled or directly accessible by Meridian rather than being entirely dependent on third parties. I know this remains particularly important to shareholders given what unfolded during the previous financial year.

Speaker #2: The right position sits somewhere in between. This slide updates the one presented at our interim results, with the important addition of the storage now available at Lake Pūkaki.

Speaker #2: The key point is not simply that Meridian has more risk management volume available than it did in the 2025 financial year. The portfolio is now considerably broader, more diverse, and more flexible.

Speaker #2: Compared with back then, the volume of available risk management options has roughly doubled. It has diversified across different mechanisms, counterparties, and fuel sources. A greater proportion is now controlled or directly accessible by Meridian, rather than being entirely dependent on third parties.

Speaker #2: I know this remains particularly important to shareholders, given what unfolded during the previous financial year. Looking at the portfolio, my assessment is that we probably have more flexibility than we strictly need in current conditions, but that's a good position to be in.

Mike Roan: Looking at the portfolio, my assessment is that we probably have more flexibility than we strictly need in current conditions, but that is a good position to be in. It gives us confidence to continue growing the customer business, it supports future investment decisions, and allows us to optimize the risk of risk management products as conditions evolve. In a more renewable electricity system, the ability to respond to changing hydrology, demand, and market conditions is becoming as important as raw generation volume. That is why the 20-year demand response arrangement with NZAS is strategically important. It provides a significant source of flexibility at a time when flexibility is becoming increasingly valuable. Combined with the Huntly Strategic Energy Reserve, additional Pukaki storage, and our growing renewable portfolio, Meridian is in a materially stronger position than it was just two years ago.

Speaker #2: It gives us confidence to continue growing the customer business. It supports future investment decisions and allows us to optimize the risk of risk management products as conditions evolve.

Speaker #2: In a more renewable electricity system, the ability to respond to changing hydrology, demand, and market conditions is becoming as important as raw generation volume.

Speaker #2: That is why the 20-year demand response arrangement with ENSIS is strategically important. It provides a significant source of flexibility at a time when flexibility is becoming increasingly valuable.

Speaker #2: Combined with the Huntly Strategic Energy Reserve, additional Pukaki storage, and our growing renewable portfolio, Meridian is in a materially stronger position than it was just two years ago.

Speaker #2: I want to explain why securing access to the additional storage at Pukaki may prove to be one of Meridian's most important achievements in recent years.

Mike Roan: I want to explain why securing access to the additional storage at Pukaki may prove to be one of Meridian's most important achievements in recent years. The events of 2024 exposed a significant vulnerability in this country's energy system due to the unexpected decline in the gas sector. As the top graph shows, had additional hydro storage been available, wholesale prices would not have reached the levels they did. That is why we pursued it through fast-track. The first benefit is therefore greater protection against dry year and security of supply risk. The second benefit is lower wholesale prices, and these will flow through to customers. We estimated that increasing height storage flexibility could reduce average electricity prices by up to NZD 10 a megawatt hour or by NZD 400 million per annum. The last benefit's to shareholders.

Speaker #2: The events of '24 expose a significant vulnerability in this country's energy system, due to the unexpected decline in the gas sector. As the top graph shows, had additional hydro storage been available, wholesale prices would not have reached the levels they did.

Speaker #2: That is why we pursued it through Fast Track. The first benefit is therefore greater protection against dry air and security of supply risk. The second benefit is lower wholesale prices, and these will flow through to customers.

Speaker #2: We estimated that increasing storage flexibility could reduce average electricity prices by up to $10 a megawatt-hour, or by $400 million per annum. In the last benefits to shareholders, recent operating analysis has highlighted that the opportunity to improve coordination between the Waitaki and Waiare catchments is a little larger than initially expected.

Mike Roan: Recent operating analysis has highlighted that the opportunity to improve coordination between the Waitaki and Waiau catchments is a little larger than initially expected. While we knew that this additional storage would reduce spill in the Waitaki system, increasing usable storage at Pukaki also creates flexibility in the Waiau. In practical terms, we should now be able to use Lake Manapouri and Te Anau low ranges more effectively when conditions allow, knowing additional storage remains available at Pukaki if a drought develops. As historical annual spill is in the order of 600 gigawatt hours in the Waiau and 800 gigawatt hours across both catchments annually, capturing a proportion of spill in the Waiau creates a larger opportunity than we'd previously expected. The most important benefit remains security of supply. The major focus for the retail team this year has been migrating customers onto the technology platform, Kraken.

Speaker #2: While we knew that this additional storage would reduce spill in the Waitaki system, increasing usable storage at Pukaki also creates flexibility in the wire.

Speaker #2: In practical terms, we should now be able to use Lake Manapōuri and Te Anau low ranges more effectively when conditions allow, knowing additional storage remains available at Pukaki if a drought develops.

Speaker #2: As historical annual spill is in the order of 600 gigawatt-hours in the Waitaki, and 800 gigawatt-hours across both catchments annually, catching a proportion of spill in the Waitaki creates a larger opportunity than we'd previously expected.

Speaker #2: But the most important benefit remains security of supply. The major focus for the retail team this year has been migrating customers onto the technology platform, Kraken.

Speaker #2: We've easily passed the halfway mark in that endeavor. At interims, I said that we had slowed the migration to protect the customer experience. That was the right decision.

Mike Roan: We've easily passed the halfway mark in that endeavor. At Interims, I said that we had slowed the migration to protect the customer experience. That was the right decision. The broader migration has gone quite well, although some decisions affecting the Powershop experience frustrated customers, and understandably, they let us know. We're still working through a small number of issues, but most have been resolved. I actually became a Powershop customer during the process. I switched from Meridian, partly because I wanted to experience the changes firsthand and to understand what was frustrating people. The new app experience is definitely different to the old one, and while change always takes some adjustment, it's actually pretty straightforward to use. Importantly, we now have a platform to continue improving the customer experience and operating efficiency.

Speaker #2: The broader migration has gone quite well. Although some decisions affecting the Powershop experience frustrated customers, and understandably, they let us know. We're still working through a small number of issues, but most have been resolved.

Speaker #2: I actually became a Powershop customer during the process. I switched from Meridian, partly because I wanted to experience the changes firsthand and to understand what was frustrating people.

Speaker #2: The new app experience is definitely different from the old one. And while it always takes some adjustment, it's actually pretty straightforward to use. Importantly, we now have a platform for continued improvement of the customer experience and operating efficiency.

Speaker #2: And despite the scale of the migration, we continue to increase our market share. The real value lies in what comes next. The new platform gives us the ability to innovate, improve the customer experience, and add value for customers.

Mike Roan: Despite the scale of the migration, we continue to increase our market share, and the real value lies in what comes next. The new platform gives us the ability to innovate, improve the customer experience, and add value for customers. The other important development for customers has been the movement in wholesale electricity prices. Since the start of the year, wholesale fuel prices have fallen by between 25% and 40%, depending on what year you look at. That's a material shift, and it's great news as those lower wholesale prices are already flowing directly to business customers as contracts are renewed. That is strong evidence that the market is doing what it's supposed to do. Meridian and other generators are investing in renewable generation at an unprecedented scale in New Zealand, and those investments have increased supply, improved security, and put downward pressure on prices.

Speaker #2: The other important development for customers has been the movement in wholesale electricity prices. Since the start of the year, wholesale fuel prices have fallen by between 25% and 40%, depending on what year you look at.

Speaker #2: That's a material shift, and it's great news, as those lower wholesale prices are already flowing directly to business customers as contracts are renewed. And that is strong evidence that the market is doing what it's supposed to do.

Speaker #2: Meridian and other generators are investing in renewable generation at an unprecedented scale in New Zealand, and those investments have increased supply, improved security, and put downward pressure on prices.

Speaker #2: The top graph on this slide compares real residential prices with wholesale spot and futures prices. The key point is that residential prices have not risen at the same rate as wholesale prices since 2019.

Mike Roan: The top graph on this slide compares real residential costs with wholesale spot and futures prices. The key point is that residential prices have not risen at the same rate as wholesale prices since 2019. They have lagged materially. If you wanted a simple illustration of why the gentailer model exists, this is it. Gentailers absorb and smooth wholesale market volatility so customers do not experience the extreme movements that occur in spot and futures markets. As wholesale prices have fallen, the question on everyone's minds is: Will residential prices also soften? The headline is relatively straightforward. Wholesale prices have fallen materially and customers will benefit over time. However, as the graph on the bottom right shows, the pace and scale of that benefit will be influenced by regulated lines charges, which remain a significant headwind at 2030, obviously outside of our control.

Speaker #2: They've lagged materially. If you wanted a simple illustration of why the Gentiler model exists, this is it. Gentiler has absorbed and smoothed wholesale market volatility so customers do not experience the extreme movements that occur in spot and futures markets.

Speaker #2: But as wholesale prices have fallen, the question on everyone's minds is: will residential prices also soften? The headlines are relatively straightforward—wholesale prices have fallen materially, and customers will benefit over time.

Speaker #2: However, as the graph on the bottom right shows, the pace and scale of that benefit will be influenced by regulated lines charges, which remain a significant headwind after 2030.

Speaker #2: Obviously, that's outside of our control. Households may therefore see less relief in the total bill than movements in wholesale electricity prices alone would suggest. But to provide some confidence, today we're committed to ensuring that, for residential and small business customers, the average price change to the energy component of the bill across all of our plans will be held below the rate of inflation over the next year.

Mike Roan: Households may therefore see less relief in the total bill than movements in wholesale electricity prices alone would suggest. To provide some confidence, today we are committed to ensuring that for residential and small business customers, the average price change to the energy component of the bill across all of our plans will be held below the rate of inflation over the next year. Meanwhile, we remain focused on helping customers save through our products and services and continue to support those who are finding it hard to keep up with their bills. Our board has approved an additional NZD 7 million to extend our Energy Wellbeing Programme through 2030, allowing us to continue partnering with community organizations to provide practical support for customers experiencing hardship. We have also materially sharpened pricing at one of our brands, Powershop, starting this week.

Speaker #2: Meanwhile, we remain focused on helping customers save through our products and services, and continue to support those who are finding it hard to keep up with their bills.

Speaker #2: Our Board has approved an additional $11 million to extend our Energy Well-being Program through 2030, allowing us to continue partnering with community organizations to provide practical support for customers experiencing hardship.

Speaker #2: We've also materially sharpened pricing at one of our brand's Power Shop, starting this week. So, if you're a Power Shop customer, keep an eye on your app.

Mike Roan: If you are a Powershop customer, keep an eye on your app. It is a small way of thanking customers who have stayed with us through a challenging period. We appreciate it. Mandy, over to you.

Speaker #2: It's a small way of thanking customers who have stayed with us through a challenging period. We appreciate it. Mandy, over to you.

Speaker #1: Thanks, Mike. As Mike has covered, this has been a strong year for Meridian—financially, with excellent EBITDA and cash flows; operationally, with high generation volumes and growing availability; two significant developments underway; and a growing pipeline of consented options.

Mandy Binny: Thanks, Mike. As Mike has covered, this has been a strong year for Meridian. Financially, with excellent EBITDAF and cash flows. Operationally, with high generation volumes and growing availability. Two significant developments underway and a growing pipeline of consented options. These foundations provide us with a platform for growth, and so today we are pleased to deliver our investors an increased dividend, and for the first time, we are producing forward earnings guidance. I am very glad at this point to be putting descriptions of the difficult FY2025 year firmly behind us. It is worth noting them, though, when looking at the comparisons to our FY2026 results. As I go through this presentation, where needed, I will also give comparisons to FY2024, which was more of a normal financial year. In FY2026, Meridian recorded strong operating cash flows of NZD 810 million, up NZD 492 million on FY2025.

Mandy Binnie: Thanks, Mike. As Mike has covered, this has been a strong year for Meridian. Financially, with excellent EBITDAF and cash flows. Operationally, with high generation volumes and growing availability. Two significant developments underway and a growing pipeline of consented options. These foundations provide us with a platform for growth, and so today we are pleased to deliver our investors an increased dividend, and for the first time, we are producing forward earnings guidance. I am very glad at this point to be putting descriptions of the difficult FY2025 year firmly behind us. It is worth noting them, though, when looking at the comparisons to our FY2026 results. As I go through this presentation, where needed, I will also give comparisons to FY2024, which was more of a normal financial year. In FY2026, Meridian recorded strong operating cash flows of NZD 810 million, up NZD 492 million on FY2025.

Speaker #1: These foundations provide us with a platform for growth, and so today we are pleased to deliver our investors an increased dividend and, for the first time, we are producing forward earnings guidance.

Speaker #1: I'm very glad at this point to be putting descriptions of the difficult FY25 year firmly behind us. It is worth noting them, though, when looking at the comparisons to our FY26 results.

Speaker #1: As we go through this presentation, where needed, I will also provide comparisons to FY24, which was more of a normal financial year. In FY26, Meridian recorded strong operating cash flows of $810 million, up $492 million on FY25.

Speaker #1: This is also a 21 percent increase on FY24's cash flows. EBITDA was a similarly excellent result: $1.05 billion, up $440 million on FY25 and 16 percent higher than FY24.

Mandy Binny: This is also a 21% increase on FY2024's cash flows. EBITDA was a similarly excellent result, NZD 1.05 billion, up NZD 440 million on FY2025, and 16% higher than FY2024. These results show the scale of the turnaround from our lowest result in over a decade to our highest ever. Almost half a billion dollar increase in operating cash flow and in energy margin, which we will look at in more detail shortly. The business continues to provide high-quality earnings, converting 93% of EBITDA to pre-tax and interest cash flows. We continue to deliver higher than GDP levels of earnings growth over the long run. Over a 15-year period, EBITDA compound annual average growth of 6%. Now on to dividends. Recognizing the excellent result, the board has declared an increased final dividend of 16.1 cents per share, up 8.4%, bringing the full-year dividend to 22.5 cents, up 7.1%.

Mandy Binnie: This is also a 21% increase on FY2024's cash flows. EBITDA was a similarly excellent result, NZD 1.05 billion, up NZD 440 million on FY2025, and 16% higher than FY2024. These results show the scale of the turnaround from our lowest result in over a decade to our highest ever. Almost half a billion dollar increase in operating cash flow and in energy margin, which we will look at in more detail shortly. The business continues to provide high-quality earnings, converting 93% of EBITDA to pre-tax and interest cash flows. We continue to deliver higher than GDP levels of earnings growth over the long run. Over a 15-year period, EBITDA compound annual average growth of 6%. Now on to dividends. Recognizing the excellent result, the board has declared an increased final dividend of 16.1 cents per share, up 8.4%, bringing the full-year dividend to 22.5 cents, up 7.1%.

Speaker #1: These results show the scale of the turnaround, from our lowest result in over a decade to our highest ever—an almost half a billion dollar increase in operating cash flow and in energy margin, which we will look at in more detail shortly.

Speaker #1: The business continues to provide high-quality earnings, converting 93 percent of EBITDA to pre-tax and interest cash flows. We continue to deliver higher-than-GDP levels of earnings growth over the long run. Over a 15-year period, EBITDA compound annual average growth has been 6 percent.

Speaker #1: Now, onto dividends. Recognizing the excellent result, the Board has declared an increased final dividend of 16.1 cents per share, up 8.4 percent, bringing the full-year dividend to 22.5 cents, up 7.1 percent.

Speaker #1: Imputation credits on the final dividend will be attached at 90%. The strong earnings reversion in FY26 provides ample short-term headroom. As a result, we have dialed the Dividend Reinvestment Plan discount back to 0%.

Mandy Binny: Imputation credits on the final dividend will be attached at 90%. The strong earnings reversion in FY2026 provides ample short-term headroom. As a result, we've dialed the dividend reinvestment plan discount back to 0%. Our modeling suggests we may consider reinstating a discount in the future, particularly when we bring the large wind options to final investment decision alongside other sources of funding. Energy margin was the main driver of EBITDA growth, with a lot more water available and without the need to lean on risk products as much as last year. Significant growth in mass market customers also supported energy margin. The fall in other revenue is predominantly related to one-off insurance proceeds received in FY2025. I'll talk to costs in more detail shortly. However, it's worth just touching on a few of the larger items.

Mandy Binnie: Imputation credits on the final dividend will be attached at 90%. The strong earnings reversion in FY2026 provides ample short-term headroom. As a result, we've dialed the dividend reinvestment plan discount back to 0%. Our modeling suggests we may consider reinstating a discount in the future, particularly when we bring the large wind options to final investment decision alongside other sources of funding. Energy margin was the main driver of EBITDA growth, with a lot more water available and without the need to lean on risk products as much as last year. Significant growth in mass market customers also supported energy margin. The fall in other revenue is predominantly related to one-off insurance proceeds received in FY2025. I'll talk to costs in more detail shortly. However, it's worth just touching on a few of the larger items.

Speaker #1: Our modeling suggests we may consider reinstating a discount in the future, particularly when we bring the large wind options to final investment decision, alongside other sources of funding.

Speaker #1: Energy margin was the main driver of EBITDA growth, with a lot more water available and without the need to lean on risk products as much as last year.

Speaker #1: Significant growth in mass market customers also supported energy margin. The fall in other revenue is predominantly related to one-off insurance proceeds received in FY25.

Speaker #1: I'll talk to costs in more detail shortly. However, it's worth just touching on a few of the larger items. Transmission and distribution cost increases continue to flow through, and operating costs landed within guidance at an 8 percent increase on FY25.

Mandy Binny: Transmission and distribution cost increases continue to flow through, and operating costs landed within guidance at an 8% increase on FY2025. With more fuel in the system this year, physical margin was impacted by big swings in both volumes and prices. Wholesale spot prices were significantly lower, while both hydro and wind generation volumes increased. Continued mass market sales growth is the result of the successful execution of our retail strategy, and it is great to see that showing up in our financial performance, and more than made up for a flat Commercial and Industrial book. Significant margin movements relating to financial products shows how much improved hydro conditions in FY2026 reduced derivative purchases and demand response costs compared to FY2025. The shift in the retail book more towards mass market was accelerated at the start of the year by the acquisition of the Flick Electric customers.

Mandy Binnie: Transmission and distribution cost increases continue to flow through, and operating costs landed within guidance at an 8% increase on FY2025. With more fuel in the system this year, physical margin was impacted by big swings in both volumes and prices. Wholesale spot prices were significantly lower, while both hydro and wind generation volumes increased. Continued mass market sales growth is the result of the successful execution of our retail strategy, and it is great to see that showing up in our financial performance, and more than made up for a flat Commercial and Industrial book. Significant margin movements relating to financial products shows how much improved hydro conditions in FY2026 reduced derivative purchases and demand response costs compared to FY2025. The shift in the retail book more towards mass market was accelerated at the start of the year by the acquisition of the Flick Electric customers.

Speaker #1: With more fuel in the system this year, physical margin was impacted by big swings in both volumes and prices. Wholesale spot prices were significantly lower, while both hydro and wind generation volumes increased.

Speaker #1: Continued mass market sales growth is the result of the successful execution of our retail strategy, and it is great to see that showing up in our financial performance. It more than made up for a flat commercial and industrial book.

Speaker #1: Significant margin movements relating to financial products show how much improved hydro conditions in FY26 reduced derivative purchases and demand response costs compared to FY25.

Speaker #1: The shift in the retail book more towards mass market was accelerated at the start of the year by the acquisition of the Flick Electric customers.

Speaker #1: As Mike has already mentioned, total customer connection numbers are up 12 percent, leading to sales volumes up 14 percent. Declining ASX wholesale prices are flowing through into C&I contracts, leading to a slight decline in revenues in that segment, while mass market revenues were up $217 million.

Mandy Binny: As Mike has already mentioned, total customer connection numbers are up 12%, leading to sales volumes up 14%. Declining ASX wholesale prices are flowing through into C&I contracts, leading to a slight decline in revenues in that segment, while mass market revenues were up NZD 217 million. C&I contracts are now up to an average tenure of over three years. Overall, we continue to deliver range growth in retail network. Moving on to generation. Annual inflows were above average at 122%. While this is a relatively normal level of inflow, similar to levels seen in other above average years, it's the timing of inflow that is important. Record hydro inflows through September to January supported the FY2026 financial result. The third wettest June on record means we have started FY2025 with healthy storage.

Mandy Binnie: As Mike has already mentioned, total customer connection numbers are up 12%, leading to sales volumes up 14%. Declining ASX wholesale prices are flowing through into C&I contracts, leading to a slight decline in revenues in that segment, while mass market revenues were up NZD 217 million. C&I contracts are now up to an average tenure of over three years. Overall, we continue to deliver range growth in retail network. Moving on to generation. Annual inflows were above average at 122%. While this is a relatively normal level of inflow, similar to levels seen in other above average years, it's the timing of inflow that is important. Record hydro inflows through September to January supported the FY2026 financial result. The third wettest June on record means we have started FY2025 with healthy storage.

Speaker #1: C&I contracts are now up to an average tenure of over three years. Overall, we continue to deliver sustained growth in our retail network. Moving on to generation.

Speaker #1: Annual inflows were above average at 122 percent. While this is a relatively normal level of inflow, similar to levels seen in other above-average years, it's the timing of inflow that is important.

Speaker #1: Record hydro inflows through September to January supported the FY26 financial result. The third wettest June on record means we have started FY27 with healthy storage.

Speaker #1: The generation upgrade program continued delivering 30 megawatts of additional capacity across Benmore and Ohau B & C, as well as significant availability improvements. Finally, an update on the transformers at Manapouri.

Mandy Binny: The generation upgrade program continued, delivering 30 megawatts additional capacity across Benmore and Ōhau B and C, as well as significant availability improvements. An update on the transformers at Manapouri. We had two delivered in the financial year, with one installed ahead of winter and the other due to be installed later this year. Three more are expected to arrive in FY27. Operating expenses were NZD 313 million in FY26, an increase of NZD 24 million, or 8%, and within guidance. Included in the increase from FY25 is a reinstatement of short-term incentives. We also saw inflation-level remuneration increases. We now have both quantification and a clear pathway to remediating our Holidays Act obligations, and costs for this have been recognized at just over NZD 3 million. We have had an increased level of customer service staffing through both customer onboarding and the Kraken migration program.

Mandy Binnie: The generation upgrade program continued, delivering 30 megawatts additional capacity across Benmore and Ōhau B and C, as well as significant availability improvements. An update on the transformers at Manapouri. We had two delivered in the financial year, with one installed ahead of winter and the other due to be installed later this year. Three more are expected to arrive in FY27. Operating expenses were NZD 313 million in FY26, an increase of NZD 24 million, or 8%, and within guidance. Included in the increase from FY25 is a reinstatement of short-term incentives. We also saw inflation-level remuneration increases. We now have both quantification and a clear pathway to remediating our Holidays Act obligations, and costs for this have been recognized at just over NZD 3 million. We have had an increased level of customer service staffing through both customer onboarding and the Kraken migration program.

Speaker #1: We had two delivered in the financial year, with one installed ahead of winter and the other due to be installed later this year. Three more are expected to arrive in FY27.

Speaker #1: Operating expenses were $313 million in FY26, an increase of $24 million, or 8 percent, and within guidance. Included in the increase from FY25 is a reinstatement of short-term incentives.

Speaker #1: We also saw inflation-level remuneration increases. We now have both quantification and a clear pathway to remediating our Holidays Act obligations, and costs for this have been recognized at just over $3 million.

Speaker #1: We have had an increased level of customer service staffing, through both Flick customer onboarding and then the Kraken migration program. We expect to complete customer migration to Kraken by the interims.

Mandy Binny: We expect to complete customer migration to Kraken by interims. Maintenance costs were around NZD 7 million higher, mostly due to higher spend at Manapōuri and ongoing wind farm maintenance, including major components which do not get capitalized. Major IT projects remain a feature of our work program with DigiGEN and the Kraken migration featuring in FY26, but the level of spend was NZD 3 million down on FY25 when we completed the finance system migration to Oracle. Now on to capital expenditure. In March, we revised our guidance and indicated that we might spend between NZD 280 million and NZD 310 million. We landed at NZD 261 million, up 35% from last year, but still falling just below that guidance level, largely as a result of movements in the payment schedule for Ruakākā Solar. At Ruakākā, 64,000 of the 257,000 panels are now installed at one of the three sites.

Mandy Binnie: We expect to complete customer migration to Kraken by interims. Maintenance costs were around NZD 7 million higher, mostly due to higher spend at Manapōuri and ongoing wind farm maintenance, including major components which do not get capitalized. Major IT projects remain a feature of our work program with DigiGEN and the Kraken migration featuring in FY26, but the level of spend was NZD 3 million down on FY25 when we completed the finance system migration to Oracle. Now on to capital expenditure. In March, we revised our guidance and indicated that we might spend between NZD 280 million and NZD 310 million. We landed at NZD 261 million, up 35% from last year, but still falling just below that guidance level, largely as a result of movements in the payment schedule for Ruakākā Solar. At Ruakākā, 64,000 of the 257,000 panels are now installed at one of the three sites.

Speaker #1: Maintenance costs were around $7 million higher, mostly due to higher spend at Manapouri, and ongoing wind farm maintenance, including major components which do not get capitalized.

Speaker #1: Major IT projects remain a feature of our work program, with DigiGen and the Kraken migration featuring in FY26. But the level of spend was $3 million down on FY25, when we completed the finance system migration to Oracle.

Speaker #1: Now, onto capital expenditure. In March, we revised our guidance and indicated that we might spend between $280 and $310 million. We landed at $261 million, up 35 percent from last year, but still falling just below that guidance level—largely as a result of movements in the payment schedule for Ruakākā Solar.

Speaker #1: At Ruakaka, 64,000 of the 257,000 panels are now installed at one of the three sites. The build remains on target for full power towards the end of this financial year.

Mandy Binny: The build remains on target for full power towards the end of this financial year. The bulk of the spend is in the multi-year work programs for replacement transformers, the generation control system, and the earthquake strengthening works underway at Benmore Penstocks. Net profit before tax for FY26 rose NZD 779 million, and net profit after tax rose NZD 582 million. Here you see the impacts of the better year, including a NZD 403 million reduction in unrealized losses from energy and treasury hedges. This is offset by the NZD 88 million additional depreciation that resulted from the NZD 2.1 billion revaluation of generation assets at the end of FY25. With another NZD 1.8 billion uplift in asset valuation this year, depreciation will increase again in FY27. These items have no impact on cash flow and are not included in EBITDA, but are reported as part of net profit before and after tax.

Mandy Binnie: The build remains on target for full power towards the end of this financial year. The bulk of the spend is in the multi-year work programs for replacement transformers, the generation control system, and the earthquake strengthening works underway at Benmore Penstocks. Net profit before tax for FY26 rose NZD 779 million, and net profit after tax rose NZD 582 million. Here you see the impacts of the better year, including a NZD 403 million reduction in unrealized losses from energy and treasury hedges. This is offset by the NZD 88 million additional depreciation that resulted from the NZD 2.1 billion revaluation of generation assets at the end of FY25. With another NZD 1.8 billion uplift in asset valuation this year, depreciation will increase again in FY27. These items have no impact on cash flow and are not included in EBITDA, but are reported as part of net profit before and after tax.

Speaker #1: The bulk of the spend is in the multi-year work programs: for replacement transformers, the generation control system, and the earthquake strengthening works underway at Benmore penstocks.

Speaker #1: Net profit before tax for FY26 rose $779 million, and net profit after tax rose $582 million. Here you see the impacts of the better year, including a $403 million reduction in unrealized losses from energy and Treasury hedges.

Speaker #1: This was offset by the $88 million additional depreciation that resulted from the $2.1 billion revaluation of generation assets at the end of FY25, and with another $1.8 billion uplift in asset valuation this year, depreciation will increase again in FY27.

Speaker #1: These items have no impact on cash flow and are not included in EBITDA, but are reported as part of net profit before and after tax.

Speaker #1: Finally, the non-GAAP measure of underlying net profit after tax, which excludes items such as movements in the unrealized value of hedges, was up $252 million.

Mandy Binny: Finally, the non-GAAP measure of underlying net profit after tax, which excludes items such as movements in the unrealized value of hedges, was up NZD 252 million. During the year, net debt increased by 11% to almost NZD 1.7 billion, but spot net debt to EBITDA improved to 1.6x, down from 2.5x in FY25 as a result of the earnings reversion. We expect this to rise again in the coming years as our renewable build program continues. The funding base remains diverse, with issuances in the last year in both the Kiwi and Australian markets. Headroom is strong, with NZD 1 billion of committed borrowing facilities, none of which were drawn at year-end. Overall, the capital structure remains well-positioned to fund our growth program.

Mandy Binnie: Finally, the non-GAAP measure of underlying net profit after tax, which excludes items such as movements in the unrealized value of hedges, was up NZD 252 million. During the year, net debt increased by 11% to almost NZD 1.7 billion, but spot net debt to EBITDA improved to 1.6x, down from 2.5x in FY25 as a result of the earnings reversion. We expect this to rise again in the coming years as our renewable build program continues. The funding base remains diverse, with issuances in the last year in both the Kiwi and Australian markets. Headroom is strong, with NZD 1 billion of committed borrowing facilities, none of which were drawn at year-end. Overall, the capital structure remains well-positioned to fund our growth program.

Speaker #1: During the year, net debt increased by 11 percent to almost $1.7 billion, but spot net debt to EBITDA improved to 1.6 times, down from 2.5 times in FY25, as a result of the earnings reversion.

Speaker #1: We expect this to rise again in the coming years as our renewable build program continues. The funding base remains diverse, with issuances in the last year in both the Kiwi and Australian markets.

Speaker #1: Headroom is strong, with $1 billion of committed borrowing facilities, none of which were drawn at year-end. Overall, the capital structure remains well-positioned to fund our growth program.

Speaker #1: And now, onto FY27. For the first time this year, we have chosen to deliver forward earnings guidance. Subject to a reasonable set of caveats, which you can see on this page, our expected EBITDA for FY27 lies in the range of $1.04 to $1.12 billion.

Mandy Binny: Now on to FY27, and for the first time this year, we have chosen to deliver forward earnings guidance, subject to a reasonable set of caveats, which you can see on this page. Our expected EBITDA for FY27 lies in the range NZD 1.04 to NZD 1.12 billion. We continue to provide guidance on our future operating and capital expenditure. Operating costs first, where we expect to spend between NZD 321 and NZD 326 million next year, an increase of between 2.5% and 4%. Like any other company, we are experiencing inflation-related cost increases, with these being broadly managed through efficiencies. The majority of OpEx increases are related to, firstly, IT, both system licensing and cybersecurity costs. Secondly, Ruakākā Solar operating costs, and finally, an increase to the scale of our DigiGEN program. The DigiGEN program identified over NZD 3.5 million in opportunities to improve revenue or decrease OpEx.

Mandy Binnie: Now on to FY27, and for the first time this year, we have chosen to deliver forward earnings guidance, subject to a reasonable set of caveats, which you can see on this page. Our expected EBITDA for FY27 lies in the range NZD 1.04 to NZD 1.12 billion. We continue to provide guidance on our future operating and capital expenditure. Operating costs first, where we expect to spend between NZD 321 and NZD 326 million next year, an increase of between 2.5% and 4%. Like any other company, we are experiencing inflation-related cost increases, with these being broadly managed through efficiencies. The majority of OpEx increases are related to, firstly, IT, both system licensing and cybersecurity costs. Secondly, Ruakākā Solar operating costs, and finally, an increase to the scale of our DigiGEN program. The DigiGEN program identified over NZD 3.5 million in opportunities to improve revenue or decrease OpEx.

Speaker #1: We continue to provide guidance on our future operating and capital expenditure. Operating costs first, where we expect to spend between $321 million and $326 million next year, an increase of between 2.5% and 4%.

Speaker #1: Like any other company, we are experiencing inflation-related cost increases, with these being broadly managed through efficiencies. The majority of OPEX increases are related to, firstly, IT—both system licensing and cybersecurity costs—secondly, Ruakaka Solar operating costs, and finally, an increase to the scale of our DigiGen program.

Speaker #1: The DigiGen program identified over $3.5 million in opportunities to improve revenue or decrease OPEX. It delivered over $1 million of those savings in FY26, and we are aiming to deliver $6 million in value in FY27.

Mandy Binny: It delivered over NZD 1 million of those savings in FY26, and we are aiming to deliver NZD 6 million in value in FY27. I mentioned completion of Holidays Act remediation included in FY26 previously that will drop away in FY27. We expect to enter a lower insurance cost cycle for at least the next 12 months. Capital expenditure is predicted between NZD 370 and NZD 410 million. I have given you a fairly granular breakdown of how that is expected to be spent with the completion of Ruakākā Solar being the largest expenditure. While the wind project at Mt Munro and Te Rere Hau move into pre-construction. Work will commence on Waitaki Hydro Station upgrade. While the program of work is designed to maintain the long-term reliability, safety, and operability of the station, the project also delivers additional generating capacity. The CapEx for that project is therefore split between growth and maintenance.

Mandy Binnie: It delivered over NZD 1 million of those savings in FY26, and we are aiming to deliver NZD 6 million in value in FY27. I mentioned completion of Holidays Act remediation included in FY26 previously that will drop away in FY27. We expect to enter a lower insurance cost cycle for at least the next 12 months. Capital expenditure is predicted between NZD 370 and NZD 410 million. I have given you a fairly granular breakdown of how that is expected to be spent with the completion of Ruakākā Solar being the largest expenditure. While the wind project at Mt Munro and Te Rere Hau move into pre-construction. Work will commence on Waitaki Hydro Station upgrade. While the program of work is designed to maintain the long-term reliability, safety, and operability of the station, the project also delivers additional generating capacity. The CapEx for that project is therefore split between growth and maintenance.

Speaker #1: I mentioned the completion of Holidays Act remediation. Included in FY26 previously, that will drop away in FY27. We expect to enter a lower insurance cost cycle for at least the next 12 months.

Speaker #1: Capital expenditure is predicted to be between $370 million and $410 million. I've given you a fairly granular breakdown of how that is expected to be spent, with the completion of Ruakaka Solar being the largest growth expenditure, while the wind projects at Mount Monroe and Terereho move into pre-construction.

Speaker #1: Work will commence on the Waitaki Hydro Station upgrade. While the program of work is designed to maintain the long-term reliability, safety, and operability of the station, the project also delivers additional generating capacity.

Speaker #1: The CAPEX for that project is therefore split between growth and maintenance. Finally, a quick look at the start of FY27: retail sales growth and higher generation seen last year continued into July. As context, inflows in June and July have been twice the level of those months in 2024.

Mandy Binny: Finally, a quick look at the start of FY27. The retail sales growth and higher generation seen last year continued into July. As context, inflows in June and July have been twice the level of those months in 2024. Lake levels are well above average for this time of year, and we are seeing a strong start. To you, Mike.

Mandy Binnie: Finally, a quick look at the start of FY27. The retail sales growth and higher generation seen last year continued into July. As context, inflows in June and July have been twice the level of those months in 2024. Lake levels are well above average for this time of year, and we are seeing a strong start. To you, Mike.

Speaker #1: Lake levels are well above average for this time of year, and we're seeing a strong start. Over to you, Mike.

Speaker #2: Thanks, Mandy. Hey, before we move to questions, I want to leave you with three thoughts. First, obviously, fiscal year '26 was a good year. We delivered very strong financial results, but more importantly, we materially improved the capability of the business.

Mike Roan: Thanks, Mandy. Before we move to questions, I want to leave with three thoughts. First, obviously, our FY26 was a good year. We delivered a very strong financial result, but more importantly, we materially improved the capability of the business. We strengthened our hydro position, expanded our development options, improved the risk management portfolio, grew our customer base, and continued investing in the infrastructure that will support New Zealand's future electricity needs. Second, many of the benefits from those decisions still sit ahead of us. The investments we are making today, whether in generation, storage, customer systems, or development, are designed to create value over many years, not simply the next reporting period. We are also approaching capital allocation with discipline. We have options, but we do not need to pursue every option.

Speaker #2: We strengthened our hydro position, expanded our development options, improved the risk management portfolio, grew our customer base, and continued investing in the infrastructure that will support New Zealand’s future electricity needs.

Speaker #2: Second, many of the benefits from those decisions still lie ahead of us. The investments we're making today—whether in generation, storage, customer systems, or development—are designed to create value over many years, not simply the next reporting period.

Speaker #2: We're also approaching capital allocation with discipline. We have options, but we do not need to pursue every option. We'll invest where returns justify the risk, and where an opportunity strengthens the value and resilience of the wider Meridian portfolio.

Mike Roan: We will invest where returns justify the risk and where an opportunity strengthens the value and resilience of the wider Meridian portfolio. Third, for the first time in several years, I think the industry can start looking forward with a greater degree of confidence. Wholesale prices have fallen materially, new renewable generation is being built at pace, security of supply is being strengthened, and the benefits of all of this are starting to flow through to customers. None of that happened by accident. There is still plenty of work to do, but both Meridian and the wider electricity industry enters the new financial year in a stronger position, and the opportunity ahead is significant. As New Zealand grows its renewable generation base, we strengthen an advantage that few countries can match: abundant, affordable, and increasingly renewable electricity. Last year, I said I was confident in the future of the business.

Speaker #2: And third, for the first time in several years, I think the industry can start looking forward with a greater degree of confidence. Wholesale prices have fallen materially, new renewable generation is being built at pace, security of supply is being strengthened, and the benefits of all of this are starting to flow through to customers.

Speaker #2: None of that happened by accident. There's still plenty of work to do, but both Meridian and the wider electricity industry enter the new financial year in a stronger position.

Speaker #2: And the opportunity ahead is significant. As New Zealand grows its renewable generation base, we strengthen an advantage that few countries can match: abundant, affordable, and increasingly renewable electricity.

Speaker #2: Last year, I said I was confident in the future of the business. Now, having seen what the team delivered, I'm more confident than I ever have been.

Mike Roan: Now, having seen what the team delivered, I am more confident than I ever have been. Thank you. We can move to questions. We might start in the room, which I am going to guess could be Andrew.

Speaker #2: Thank you. We can move to questions. We might start in the room. I'm going to guess it could be Andrew.

Andrew Harvey-Green: Hi, Mike and Mandy. Andrew Harvey-Green here. Couple of questions from me. First of all, stay in business CapEx, it is a reasonably big step up there. Can you talk through, I guess, how long will it be at these sorts of levels? Give us a bit more color, I guess, looking beyond FY27. Also, it looks like there are lots of little bits that sort of add up this year. I guess when we think about what is a long-term stay in business CapEx number, you said you have got an underlying number, I think about NZD 40 million, but there is always going to be little one-offs that come in. If you can give us a bit more color around that would be great.

Speaker #3: Hi, Mike and Mandy. Andrew Havergreen here. A couple of questions from me. So, first of all, stay-in-business CAPEX—it's reasonably steep, a big step up there.

Speaker #3: Can you sort of talk through, I guess, how long it will be at these sorts of levels? Give us a bit more color, I guess, looking beyond FY27.

Speaker #3: And also, I guess, I mean, it looks like there are lots of little bits that sort of add up this year. And I guess, when we think about what a long-term stay-in-business CAPEX number is, you've got an underlying number, I think, of about $40 million, but there's always going to be little one-offs that come in.

Speaker #3: So, if you can give us a bit more color around that, that would be great.

Speaker #1: Yep. Thanks for Andrew. So firstly, I'll just say that stay in business CAPEX number is impacted in future years by the Waitaki upgrade program, which we have for the first year attempted to do an allocation of that between stay in business and growth with an indication of 85 percent of the cost of that program as stay in business.

Mandy Binny: Yep. Thanks, Andrew. Firstly, I would just say the stay in business CapEx number is impacted in future years by the Waitaki upgrade program, which we have for the first year attempted to do an allocation of that between stay in business and growth, with an indication of 85% of the cost of that program as stay in business. There are a number of periodic items, which we have said are up to NZD 120 million at the moment, including that Waitaki upgrade. There will always be those. I think you, in the longer term, see, excluding Waitaki, that come back to around about NZD 80 million.

Mandy Binnie: Yep. Thanks, Andrew. Firstly, I would just say the stay in business CapEx number is impacted in future years by the Waitaki upgrade program, which we have for the first year attempted to do an allocation of that between stay in business and growth, with an indication of 85% of the cost of that program as stay in business. There are a number of periodic items, which we have said are up to NZD 120 million at the moment, including that Waitaki upgrade. There will always be those. I think you, in the longer term, see, excluding Waitaki, that come back to around about NZD 80 million.

Speaker #1: There are a number of kinds of periodic items which, you know, we've said are up to $120 million at the moment, including that Waitaki upgrade.

Speaker #1: There will always be those. I think you would, in the longer term, see—excluding Waitaki—that come back to around about $80 million.

Speaker #3: Okay, thanks. Next question, I'll just head— I guess I was looking at some of your long-term growth aspirations, and I think there's a slide at the back there which shows 6 terawatt hours of additional generation between now and 2035.

Andrew Harvey-Green: Okay. Thanks. Next question I just had, I guess, was looking at some of your long-term growth aspirations, and I think there is a slide at the back there which shows 6 terawatt-hours of additional generation between now and 2035. I understand what you are trying to be doing in the mass market space, but that is not going to give you 6 terawatt-hours of demand. So obviously with security in Contact, push data and data centers or sort of push that forward. Can you sort of talk what you are doing, I guess, on that demand stimulation side and how, I guess, you plan to try and balance your book with 6 terawatt-hours of new generation?

Speaker #3: I understand what you're trying to do in the mass market space, but that's not going to give you 6 terawatt-hours of demand.

Speaker #3: So, can you—I mean, obviously, with security and contact push going, data centers will sort of push that forward. Can you talk about what you're doing, I guess, on that demand stimulation side, and how you plan to try and balance your book with 6 terawatt hours of new generation?

Speaker #2: Yeah, thanks, Andrew. As you said, there are new sources of demand emerging in New Zealand in the form of data centers. You know, they will assume a portion of everybody's expected generation development.

Mike Roan: Yeah. Thanks, Andrew. As you said, there are new sources of demand emerging in New Zealand in the form of data centers. They will consume a portion of everybody's expected generation development. So, whether it is DataGrid or CDC, those commitments, it is going to require everybody to step up the pace of their development to meet the timelines. Beyond that, did not talk to it specifically today, but have talked to it before, which is we form a small team within the company to go out there and look at growth beyond the growth in existing customers in New Zealand. They are out there still looking. It is still too early to tell you what might land, because it is like any whānau, it takes time to prioritize and then deliver outcomes. But they are making progress.

Speaker #2: So you know, whether it's data grid or CDC, those commitments are going to require everyone to step up the pace of their development to meet the timelines.

Speaker #2: Beyond that, we didn't talk too specifically today, but have talked to it before, which is we form a small team within the company to go out there and look at growth beyond the growth in existing customers in New Zealand.

Speaker #2: And they're out there still looking. It's still too early to tell you what might land, because it's like any fun of it: time to prioritize and then deliver outcomes.

Speaker #2: But they are making progress. The last piece that I'd say is—you probably know this—there are a few large RFPs out there at the moment for the conversion process, and we've got a gas sector in the country that's really looking for, you know, what it needs to do.

Mike Roan: The last piece that I would say is, and you probably know this, is there are a few large RFPs out there at the moment for conversion process. We have got a gas sector in the country that is really looking for what it needs to do. Both of those are significant and substantial and will help us deploy into that 6 terawatt-hour pipeline. The last thing I will leave you with is, the single most important thing that we do beyond operating the business is we deploy other people's money efficiently and effectively, i.e. good capital allocation. So as market prices and demand forecasts turn into actual delivery is we will be incredibly disciplined in the way that we actively deploy capital as opposed to the options that we are creating, because we think the development of optionality is as important as driving raw energy into the market.

Speaker #2: Both of those are significant and substantial and will help us deploy into that 6 terawatt-hour pipeline. But the last thing I'll leave you with is, you know, the single most important thing that we do beyond operating the business is we deploy other people's money efficiently and effectively—i.e., good capital allocation.

Speaker #2: So, as market prices and demand forecasts turn into actual delivery, we'll be incredibly disciplined in the way that we adequately deploy capital, as opposed to the options that we're creating, because we think the development of optionality is as important as, you know, driving raw energy into the market.

Speaker #3: Okay, thanks for that, Mike. And last question from me. Great to see guidance. Can you give us some in terms of the base assumption around your hydro generation for FY27—what sort of range are you looking at that underpins those figures?

Andrew Harvey-Green: Thanks for that, Mike. Last question from me. Great to see guidance. Can you give us some, in terms of the base assumption around your hydro generation for FY27, what sort of range are you looking at that sort of underpins those range?

Speaker #1: I do not have that information to hand, but we have—obviously, we have produced that information. I will get that to you.

Mandy Binny: I do not have that information to hand, but obviously we have produced that information. I will get that to you.

Mandy Binnie: I do not have that information to hand, but obviously we have produced that information. I will get that to you.

Speaker #2: So it's around—it's a deviation around average, Andrew. So it's just what you'd expect. There's a normal deviation across wind and hydro generation. And then the caveats that Mandy laid out were one-off, specific events that might occur.

Mike Roan: It is a deviation around average, Andrew.

Mandy Binny: Yeah.

Mandy Binnie: Yeah.

Mike Roan: It is just what you would expect as a normal deviation across wind and hydro generation. Then the caveats that Mandy laid out were one-off specific events that might occur.

Speaker #1: Yeah, a normal hydrology.

Mandy Binny: And normal hydrology.

Mandy Binnie: And normal hydrology.

Speaker #2: Yeah, just a deviation around average—nothing sophisticated. I think we can go to the phones. Oh, sorry, go on. Anyone else before we do that?

Mike Roan: Yeah. Just a deviation around average. Nothing sophisticated. I think we can go to the phones.

Operator: Thank you.

Mike Roan: Oh, sorry. Go on. Before we do that, anyone else in the room? Did see a couple of others that sat down. No. They are not moving at all. So let's go to the phones.

Speaker #2: Anyone else in the room? I did see a couple of others that sat down. No? They're not moving at all. So, let's go to the phones.

Speaker #4: Thank you. If you'd like to ask a question, please press star one, then wait for your name to be announced. If you'd like to cancel your request, please press star two.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone and wait for your name to be announced. If you would like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Joshua Dale from Craigs Investment Partners. Please go ahead.

Speaker #4: If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Joshua Dale from Craig's Investment Partners.

Speaker #4: Please go ahead.

Speaker #2: Good morning, Mike and Mandy. Well done on a strong year, and nice to see some guidance. Just on the FY27 range you issued—when I last looked a couple of weeks ago, you were sitting on an additional 800 gigawatt-hours of hydro storage compared to PCP. July inflows have been favorable.

Joshua Dale: Morning, Mike and Mandy. Well done on a strong year, and nice to see some guidance. Just on the FY27 range you issued, when I last looked a couple of weeks ago, you were sitting on an additional 800 gigawatt hours of hydro storage compared to PCP. July inflows have been favorable. I do not know whether you have this to hand, but how much of that benefit is in your guidance, and what might the range look like under more normal conditions?

Speaker #2: Yeah, I don't know whether you have this to hand, but how much of that benefit is in your guidance, and what might the range look like under more normal conditions?

Mandy Binny: Do not know. You go.

Mandy Binnie: Do not know. You go.

Speaker #2: Go on. Yeah, no, I mean, I can pick that up. As the guidance is based around, you know, expected generation, Josh, so, you know, look at what our models tell us we'd expect and then drive a reasonable deviation to that.

Mike Roan: Yeah. No, I can pick that up. The guidance is based around expected generation, Josh. Look at what our models tell us we would expect and then drive a reasonable deviation to that. So guidance does capture the current starting position. That said, as you say, we have had a pretty strong July, and August is not shaping up too badly either. So that is why we have produced a range, is you can take and use your judgment as to where we might sit in that range. But the range is important because we are in month 2 of what tend to be reasonably long years. So, we are trying to be cautious given it is the first guidance that we have produced.

Speaker #2: So, guidance does capture the current starting position. That said, as you say, we've had a pretty strong July, and August isn't shaping up too badly either.

Speaker #2: So, you know, that's why we've produced a range. You can take and use your judgment as to where we might sit in that range, but the range is important because we're in month two of what tend to be reasonably long years.

Speaker #2: So, you know, we're trying to be cautious, given it's the first guidance that we've produced.

Speaker #1: And I would just add to that, obviously, if we see any significant change, we will update the market at that time.

Mandy Binny: I would just add to that.

Mandy Binnie: I would just add to that.

Mike Roan: So-

Mandy Binny: obviously, if we see any significant change, we will update the market at that time.

Mandy Binnie: obviously, if we see any significant change, we will update the market at that time.

Speaker #4: So if the midpoint is a billion and 80, you know, what would a I mean, if you were standing here on the 1st of July looking ahead, without the benefit of that hydro that you've seen so far, what would that billion and 80 step down to as a P50 figure?

Joshua Dale: If the midpoint is NZD 1.08 billion, if you were standing here on 1 July looking ahead, without the benefit of that hydro that you have seen so far, what would that NZD 1.08 billion step down to as a P50 figure?

Speaker #2: No. And sorry, Josh. I think you're right. Our P50 is $1.08 billion. So, you know, we've read that around the range.

Mike Roan: No. Sorry, Joshua. I think you are right. Our P50 is NZD 1.08 billion. So, we have spread that around the range.

Speaker #4: But sorry, that includes the benefit of a strong July and part of August too, right?

Joshua Dale: But, sorry, that includes the benefit of a strong July and part of August too, right?

Speaker #2: Yeah, and.

Mike Roan: Yeah. And ex-

Speaker #4: So I guess what I'm asking is, what would P50 have been if you had issued that on the 1st of July, as opposed to, you know, now, sort of the later part of August?

Joshua Dale: So, I guess what I am asking is what would P50 have been if you had issued that on 1 July as opposed to now later part of August, if you have that to hand.

Speaker #4: If you have that to hand.

Speaker #2: Yeah.

Mike Roan: Yeah.

Speaker #1: Yeah, I think so. The way I would phrase that is we took into account the starting point as at the start of July. So, we knew that the lakes were looking full at that point.

Mandy Binny: Yeah. I think-

Mandy Binnie: Yeah. I think-

Mike Roan: Thanks, Joshua.

Mandy Binny: the way I would phrase that is we took into account the starting point as at the start of July, so we knew that the lakes were looking full at that point. I don't think there was any significant difference between that and where we are now.

Mandy Binnie: the way I would phrase that is we took into account the starting point as at the start of July, so we knew that the lakes were looking full at that point. I don't think there was any significant difference between that and where we are now.

Speaker #1: I don't think there was any significant difference between that and where we are now.

Speaker #4: Okay, thanks. Just looking at page eight in your slide pack, it shows most of your on-balance-sheet developments don’t come online until FY30, which is, you know, a little later than peers.

Joshua Dale: Okay. Thanks. Just looking at page 8 in your slide pack, it shows most of your on-balance sheet developments don't come online until FY30, which is a little later than peers. But you did say you think the retail book can soak up generation from Ruakākā and Mt Munro. In terms of the demand to soak up generation from Te Rere Hau, are you counting on that retail book growing from 500K to 600K customers?

Speaker #4: But you did say you think the retail book can soak up generation from Royal Carter and Mount Monroe. In terms of the demand to soak up generation from Terriero, are you looking at, you know, are you counting on that retail book growing from 500,000 to 600,000 customers?

Speaker #2: So, we'd like the retail book.

Mike Roan: We'd like the retail book.

Joshua Dale: Or might we see some other.

Speaker #4: Or might we see some other?

Speaker #2: Oh, you'll see some more, Josh. So, you know, it would be no surprise to you, but we're out there talking to people about that volume that we expect to bring into the portfolio.

Mike Roan: Oh, you will see some more, Joshua. It would be no surprise to you, but we are out there talking to people about that volume that we expect to bring into the portfolio. We just have not completed those transactions yet, so it is hard to announce what they might be. But, you can expect us to contract for portions of that volume alongside the customer growth that we would expect.

Speaker #2: We just haven't completed those transactions yet, so it's hard to announce what they might be. But you can expect us to contract for portions of that volume alongside the customer growth that we'd expect.

Speaker #4: Got it. Okay, thanks. And one thing I did notice, you know, obviously, there's been a bit of a delay in FID for that project, but it's still looking like the full power date— you know, I guess that project essentially contributes fully for FY30.

Joshua Dale: Got it. Okay, thanks. One thing I did notice, obviously there has been a bit of a delay in FID for that project, but it is still looking like the full power date. I guess that project contributes essentially fully for FY30. So that final date has not really been affected. Why is that?

Speaker #4: So that final date hasn't really been affected. Why is that?

Speaker #2: Yeah, it's the use of summer construction periods, Josh. So while it has been delayed, as you know and others will know, it's been very frustrating.

Mike Roan: Yeah, it is the use of summer construction periods, Joshua. While it has been delayed, it has been, as you know and others will know, it has been very frustrating. So it is actually nice to see the window emerge for that, and that uncertainty disappear. But what we have not lost is we have not lost a summer construction period. While it gets delayed through a winter stretch, you have not lost the key period, which is the period you construct the roads.

Speaker #2: So it's actually nice to see the window emerge for that, and that uncertainty disappear. But what we haven't lost is, we haven't lost a summer construction period.

Speaker #2: So while it gets delayed through a winter stretch, you haven't lost the key period, which is the period you construct the roads.

Joshua Dale: Love it. Thanks. Final one, hopefully an easy one. Just the comments around the Kraken customer migration completing by the interim result. Does that include both C&I as well as mass market?

Speaker #4: Got it, thanks. And final one, hopefully an easy one. Just the comments around the Kraken customer migration completing by the interim result—does that include both C&I as well as mass market?

Speaker #2: Yep.

Mike Roan: Yep.

Speaker #1: Yes.

Mandy Binny: Yes.

Mandy Binnie: Yes.

Speaker #4: Brilliant. Thanks very much, guys.

Joshua Dale: Brilliant. Thanks very much, guys.

Speaker #3: Thank you. Your next question comes from Grant Swainpowell from Jarden. Please go ahead.

Operator: Thank you. Your next question comes from Grant Swanepoel from Jarden. Please go ahead.

Speaker #5: Good morning, all. Yeah, about time you gave guidance—that's fantastic. Now we're going to look for the type of contact-style deconstruction of that guidance going forward, and we'll have fewer analyst questions around it, hopefully.

Grant Swanepoel: Good morning, all. Yeah, about time you gave guidance. That is fantastic. Now we are going to look for the type of Contact style deconstruction of that guidance going forward, and we will have less endless questions around it, hopefully. Moving on to questions. Similar to Andrew's start, you have got about 710 gigawatt hours of extra power usage from the end of this fiscal year. Is that fully encapsulated in your portfolio position currently, and therefore the next 12 months are filled up by 1.3 terawatt hours potential, that you will wait to see how that demand will be stimulated?

Speaker #5: Moving on to questions. Similar to Andrew's start, you've got about 710 gigawatt-hours of extra power usage from the end of this fiscal year.

Speaker #5: Is that fully encapsulated in your portfolio position currently? And therefore, the next 12 months of FID, of about 1.3 terawatt-hours potential, that you will wait to see how that demand will be stimulated?

Speaker #2: Yeah, I think the simple answer to that, Grant, is yes. We will wait. You know, we're making financial investment decisions as we work through the year.

Mike Roan: Yeah. I think the simple answer to that, Grant, is yes. We are making financial investment decisions as we work through the year. So the first one is Mt Munro, December. We will look at conditions in December, and then again, whether it is Te Rāhui or Te Rere Hau, is we will make the decision that is relevant at the time. The thing that I tried to signal is when we look at the relative merits of the developments is Mt Munro is really strong from an economic perspective. Te Rere Hau is the same. While Te Rāhui has got really good economics, we are watching really carefully to see how solar positions itself in the market. So we are trying to be really careful around the deployment of capital in our solar portfolio, even though it brings additional value to the business, as I mentioned, through helping to manage dry year risk.

Speaker #2: So, the first one is Mount Monroe, December. We'll look at conditions in December. And then again, whether it's Terahui or Tiradiho, we'll make the decision that's relevant at the time.

Speaker #2: The thing that I try to signal is, when we look at the relative merits of the developments, is Mount Monroe is really strong—it's really strong from an economic perspective.

Speaker #2: Tiradiho is the same. And while Terahui has really good economics, we're watching very carefully to see how solar positions itself in the market.

Speaker #2: So we're trying to be really careful around the deployment of capital in our solar portfolio, even though it brings additional value to the business, as I mentioned, through helping to manage dry-year risk.

Speaker #2: But you know, we'll make the right decision at the time.

Mike Roan: But we'll make the right decision at the time.

Grant Swanepoel: Thanks, Mike. Just going forward in terms of creating demand for building things, how did you miss out on the 50 megawatt Tiwai contract that Contact seems to have first right of refusal on? The second question around that is, it does appear that Mercury NZ and Contact Energy are dead set to build behind the PPA for those data centers themselves. How do you get into that mix if you think that data centers are for everyone?

Speaker #5: And then just thanks, Mike. But just going forward, in terms of creating demand for building things, how did you miss out on the 50-megawatt TUI contract that Contex seems to have first right of refusal on?

Speaker #5: And the second question around that is, it does appear that Mercury and Contact are dead set to build behind the PPA for those data centers themselves.

Speaker #5: How do you get into that mix if you think that data centers are for everyone?

Mike Roan: It wouldn't surprise you, Grant Swanepoel, that we're in conversation with the smelter around additional pipeline energy. We've got a reasonable exposure to them already. So you take that for what you will, but customers typically want the best price that they can find. The second thing is, while you may not see us in front of, I'll say, data center like DataGrid, CDC Data Centres obviously is reasonably new. The key thing that I said just before is no one has enough energy to meet the needs of just data centers, given the time frames that they're contemplating. So, I would be incredibly surprised to find that Meridian Energy was not part of the mix if they're successful. The only thing that limits us is actually getting the energy developed, and as we get that energy developed is then writing it into the market. But maybe I'll give you a stronger indication.

Speaker #2: It wouldn’t surprise you, Grant, that we’re in conversation with the smelter around the additional potline energy. We’ve got a reasonable exposure to them already.

Speaker #2: So, you know, take that for what you will. But, you know, customers typically want the best price that they can find. The second thing is, while you may not see us in front of, you know, I'll say, data center–like data grids, CDC obviously is reasonably new.

Speaker #2: The key thing that I said just before is: no one has enough energy to meet the needs of data centers, given the timeframes that they're contemplating.

Speaker #2: So, you know, I would be incredibly surprised to find that Meridian was not part of the mix if they're successful. The only thing that limits us is actually getting the energy developed, and as we get that energy developed, it's then writing it into the market.

Speaker #2: But, you know, maybe I'll give you a stronger indication. There's no question that we're involved in pretty much every major consumer investment that's being made in the country.

Mike Roan: There's no question that we're involved in pretty much every major consumer investment that's being made in the country. Whether we tend to broadcast it or not tends to be our style that we let people know when we've completed those arrangements.

Speaker #2: Whether we tend to broadcast it or not, you know, tends to be our style—that we let people know when we've completed those arrangements.

Speaker #5: Yeah, thanks, Mike. And my final question is just around dividends. So, an 83% payout of your normalized cash flow and net debt position of 1.6 times.

Grant Swanepoel: Yeah. Thanks, Mike. My final question is just around dividends. So 83% payout of your normalized cash flow, and a net debt position of 1.6 times. I know you have some capital ahead of you, but where do we expect that payout ratio relative to your balance sheet over time, particularly since your debt covenant is, I mean, debt guidance is 80% to 100%?

Speaker #5: I know you've got some capital ahead of you, but where do we expect that payout ratio relative to your balance sheet over time, particularly since your debt covenant is—I mean, debt guidance is—80% to 100%?

Speaker #1: Yeah, Grant, we haven't changed the dividend policy on that. We pay out between 80 and 100% of cash flow. There's obviously been an interesting twist to that in the last couple of years, because that doesn't envisage the significant change that happens in tax payments as a result of the, you know, large swing in our earnings over a couple of years.

Mandy Binny: Yeah, Grant, we have not changed the dividend policy on that. We pay out between 80% and 100% of cash flow. There has obviously been an interesting twist to that in the last couple of years because that does not envisage the significant change that happens in tax payments as a result of the large swing in our earnings over a couple of years. So that is a notable feature of this year where last year's tax payments were much lower and were made in this financial year. While that is at 83%, when you normalize that, it is actually closer to 100.

Mandy Binnie: Yeah, Grant, we have not changed the dividend policy on that. We pay out between 80% and 100% of cash flow. There has obviously been an interesting twist to that in the last couple of years because that does not envisage the significant change that happens in tax payments as a result of the large swing in our earnings over a couple of years. So that is a notable feature of this year where last year's tax payments were much lower and were made in this financial year. While that is at 83%, when you normalize that, it is actually closer to 100.

Speaker #1: So that is, it's a notable feature of this year, where, you know, last year's tax payments were much lower and were made in this financial year.

Speaker #1: While that is at 83%, when you normalize that, it's actually closer to 100%.

Speaker #5: Thank you.

Mike Roan: Thank you.

Grant Swanepoel: Thank you.

Mandy Binny: We have continued to pay our 80% to 100%. Thanks, Grant.

Mandy Binnie: We have continued to pay our 80% to 100%. Thanks, Grant.

Speaker #1: Continued to pay out 80% to 100%. Thanks, Grant.

Speaker #3: Thank you. Once again, if you'd like to ask a question, please press star one on your telephone, and your name will be announced. Your next question comes from Vignesh Nair from UBS.

Operator: Thank you. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Vignesh Nair from UBS. Please go ahead.

Speaker #3: Please go ahead.

Speaker #4: Hi, good morning, Mike and Maddie. Can you hear me?

Vignesh Nair: Good morning, Mike and Mandy. Can you hear me?

Speaker #2: Gotcha.

Mike Roan: Got you.

Mandy Binny: Yes.

Mandy Binnie: Yes.

Speaker #4: Amazing. Just a couple of quick questions. The first one is about your growth capex envelope. I suppose from here, with several projects on the horizon, it's sort of FY30-weighted.

Vignesh Nair: Amazing. Just a couple of quick questions. The first one is just about your growth CapEx envelope, I suppose, from here. Several projects on the horizon, sort of FY30 weighted. Do you have any color on when and where spend, I suppose, will peak according to your existing gen dev profile? The context of that question is you used to guide to NZD 3 billion in CapEx over an FY24 to FY30 period. Just wondering if you are tracking in line with that or, I suppose, behind that kind of prior guide.

Speaker #4: You know, do you have any color on when and where spend, I suppose, will peak according to your existing GenDev profile? I suppose, you know, the context of that question is you used to guide to 3 billion in capex over an FY24 to FY30 period.

Speaker #4: Just wondering if you're tracking in line with that, or, I suppose, behind that kind of prior guide?

Speaker #2: So we're tracking—hey, Vignesh—we're still tracking to that guidance is the simple answer. You know, it comes down to key developments being Tiradiho, which, you know, it's the first time we've been able to give pretty good clarity on that project, which feels great.

Mike Roan: Hey, Vignesh. We are still tracking to that guidance is the simple answer. It comes down to key developments being Te Rere Hau, which first time we have been able to give pretty good clarity on that project, which feels great. But the next significant developments that fit into that timeframe are what? Hello? You there, Vignesh? Was that you?

Speaker #2: But the next significant developments that fit into that timeframe are what develop. Vignesh, was that you?

Speaker #3: Oh, pardon me for the trouble there. We are now back online. Thank you very much.

Operator: Pardon me for the troubles there. We are now back online. Thank you very much.

Speaker #5: Did you hear any of my answers, Vignesh?

Mike Roan: Did you hear any of my answer, Vignesh?

Speaker #4: No, I just heard the start. I think I missed out on the second half. Sorry.

Vignesh Nair: No, I just heard the start. I think I missed out the second half. Sorry.

Speaker #2: Okay. Did you hear the three big projects? Being Tiradiho, Waiinu, and Western Bay Solar?

Mike Roan: Okay. Did you hear the three big projects being Te Rere Hau, Waiau, and Western Bays Solar?

Speaker #4: Yep.

Vignesh Nair: Yep.

Speaker #2: And then there are a couple of smaller solar developments that we've recently got consent for. But yeah, they fit that $3 billion envelope that you'd mentioned.

Mike Roan: Then there are a couple of smaller solar developments that we have recently got consent for, but yeah, they fit that NZD 3 billion envelope that you had mentioned.

Speaker #4: Okay, cool. I suppose the follow-on is the implication of the debt profile, right? Like, where do you see peak net debt, and when do you get back to the 2 to 3 times range from here, Mike?

Vignesh Nair: Okay, cool. I suppose the follow on is the implication on the debt profile, right? Where do you see peak net debt, and when do you get back to the 2 to 3 times range from here, Mike?

Speaker #2: Well, I mean, Mandy might want to take this, but...

Mike Roan: Well, Mandy might want to take this, but I will.

Speaker #1: Yeah, so we only expect to peak just over the 3-times range and to be back in the 2- to 3-times range by, I think, FY31.

Mandy Binny: We only expect to peak just over the 3x range and to be back in the 2x to 3x range by, I think, FY31. So peaking through 2029 and 2030.

Mandy Binnie: We only expect to peak just over the 3x range and to be back in the 2x to 3x range by, I think, FY31. So peaking through 2029 and 2030.

Speaker #1: So peaking through '29 and '30.

Speaker #4: Amazing. And the second question, I suppose, is just on the battery. You know, your FY27 targets include delivery of best business case benefits. Slide 7 is obviously pretty helpful in understanding the impacts there.

Vignesh Nair: Amazing. The second question, I suppose, is just on the battery. Your FY27 targets include delivery of best business case benefits. Slide seven is obviously pretty helpful in understanding the impacts there. I was just after a couple of bits of color on whether or not the current more subdued wholesale price has impacted the return on that battery in light of where forwards are tracking and spot prices are tracking. If you can guide to maybe what the explicit EBITDA implication has been from that battery in this financial year and what you are expecting to 2027, I suppose, would be helpful as well.

Speaker #4: But, you know, I was just after a couple of, you know, bits of color on whether or not the current, more subdued wholesale price has sort of impacted the return on, you know, that battery, and sort of in light of where forwards are tracking and spot prices are tracking.

Speaker #4: And if you can guide to maybe what the explicit sort of EBITDA implication has been from that battery in this financial year, and what you're expecting to 2027, I suppose, would be helpful as well.

Speaker #2: No, I mean, again, Vignesh, we're going to release a project implementation review for the battery later in the year so that people can see the economics.

Mike Roan: No, I think, again, Vignesh, we are going to release a project implementation review for the battery later in the year so that people can see the economics. Remember we said there was about a quarter of the value through arbitrage, a quarter of the value through reserves markets, and about the remaining 50% through improved portfolio pricing for our hydro developments. When you look at the arbitrage opportunities, the last few weeks have really evidenced that they are there, and we have nailed execution. It was one of the points I was trying to make. In terms of meeting the business case, annualized revenue is probably a little lower than we expected. Reserve market revenue for the battery, again, has been a little lower than what we expected.

Speaker #2: Remember, we said there was about a quarter of the value through arbitrage, a quarter of the value through reserves markets, and about the remaining 50% through improved portfolio pricing for our hydro developments.

Speaker #2: Is when you look at the arbitrage opportunities, that really, I mean, the last few weeks have really evidenced that they're there. And we have nailed execution was one of the points I was trying to make.

Speaker #2: But in terms of meeting the business case annualized revenues, probably a little lower than we expected. Reserve market revenue for the battery, again, has been a little lower than what we expected.

Speaker #2: But the key point that I was making is the capacity of that battery to lift HVDC transfers, allowing us to release more energy from the Waitaki in the Wyo and close the North to South Island price differential. They've both exceeded what we expected to be possible for batteries, which is why we are looking at whether we can accelerate another integrated energy park.

Mike Roan: The key point that I was making is the capacity of that battery to lift HVDC transfers, allowing us to release more energy from the Waitaki and the Waiau and close the North to South Island price differential. They have both exceeded what we expected to be possible for batteries, which is why we are looking at whether we can accelerate another integrated energy park. The only reason you do an integrated energy park is it is one set of transmission assets across two actual generation assets. We are pretty enthused by what we have seen by the battery, Vignesh.

Speaker #2: And the only reason, you know, you do an integrated energy park is it's one set of transmission assets across two actual generation assets. So we're pretty enthused by what we've seen with the battery, Vignesh.

Speaker #4: And so, just to clarify, to FY27, are you expecting sort of the full, kind of target gross return on capital of about 20%, call it, on the $186 million spend? So, roughly $40 million EBITDA to fall through to that $180 million midpoint number?

Vignesh Nair: Just to clarify, into FY27, are you expecting the full kind of target gross return on capital of about 20%, call it, on the NZD 186 million spent, so NZD 40 million circa de EBITDA to fall through to that 1080 midpoint number?

Speaker #2: Yep. Yes, we are.

Mike Roan: Yes, we are.

Speaker #4: Amazing. Thank you. That's all from me.

Vignesh Nair: Amazing. Thank you. That is all from me.

Speaker #3: Thank you. Your next question comes from Stephen Hudson from Macquarie Securities. Please go ahead.

Operator: Thank you. Your next question comes from Steven Hudson from Macquarie Securities. Please go ahead.

Speaker #5: Hi, Mike and Mandy. Can you hear me okay?

Steven Hudson: Hi, Mike and Mandy. Can you hear me okay?

Stephen Hudson: Hi, Mike and Mandy. Can you hear me okay?

Speaker #1: Yes.

Mandy Binny: Yes.

Mandy Binnie: Yes.

Operator: Yes.

Mike Roan: Yes.

Speaker #5: Hey, just a couple from me. Just going back to the payout ratio—you've mentioned that there's quite a disparity between the ratio on a tax expense and a tax paid basis, and we can see that from the slide.

Steven Hudson: Hey, just a couple from me. Just going back to the payout ratio. You mentioned that there is quite a disparity between the ratio on a tax expense and a tax-paid basis, and we can see that from the slide. Are you saying that that disparity will continue for quite a period of time, Mandy, given your elevated levels of investment?

Stephen Hudson: Hey, just a couple from me. Just going back to the payout ratio. You mentioned that there is quite a disparity between the ratio on a tax expense and a tax-paid basis, and we can see that from the slide. Are you saying that that disparity will continue for quite a period of time, Mandy, given your elevated levels of investment?

Speaker #5: Are you saying that disparity will continue for quite a period of time, Mandy, given your elevated levels of investment?

Speaker #1: No, it's cool.

Mandy Binny: No. It was caused-

Mandy Binnie: No. It was caused-

Steven Hudson: In other words, should we be thinking about the 83 as being the sort of the right basis or the 102?

Stephen Hudson: In other words, should we be thinking about the 83 as being the sort of the right basis or the 102?

Speaker #5: In other words, should we be thinking about the 83 as being the right basis, or the 102?

Speaker #1: No, it was cool. It's a one-off issue caused by the swing in profitability over the last couple of years. So, we've got a difficult year followed by a strong year.

Mandy Binny: No. It is a one-off issue caused by the swing in profitability over the last couple of years. So we have had a difficult year followed by a strong year. The tax paid on that, a good proportion of it gets paid in the following financial year, and therefore impacts cash flows a year later than the poorer or better year. So in going forward in standard profitability, assuming that in a kind of standard growth profile, you should not see that level of swing, and we can return to just treating 80% to 100% as the standard range.

Mandy Binnie: No. It is a one-off issue caused by the swing in profitability over the last couple of years. So we have had a difficult year followed by a strong year. The tax paid on that, a good proportion of it gets paid in the following financial year, and therefore impacts cash flows a year later than the poorer or better year. So in going forward in standard profitability, assuming that in a kind of standard growth profile, you should not see that level of swing, and we can return to just treating 80% to 100% as the standard range.

Speaker #1: The tax paid on that—a good proportion of it—gets paid in the following financial year and, therefore, impacts cash flows a year later than the poorer or better year.

Speaker #1: So, going forward, in kind of standard profitability—assuming, you know, that in a kind of standard growth profile—you should not see that level of swing, and we can return to just treating 80% to 100% as the standard range.

Speaker #5: Right. So basically, the 102% tax—102% tax expense basis is really the one that we should be focused on, then.

Steven Hudson: Right. But basically-

Stephen Hudson: Right. But basically-

Mandy Binny: It really-

Mandy Binnie: It really-

Steven Hudson: The 100-

Stephen Hudson: The 100-

Mandy Binny: Yeah.

Mandy Binnie: Yeah.

Steven Hudson: The 102% tax expense basis is really the one that we should be focused on then.

Stephen Hudson: The 102% tax expense basis is really the one that we should be focused on then.

Speaker #1: Yes, that's right. And what you will see in future years is that those two, the difference disappears.

Mandy Binny: Yes, that's right. What you will see in future years is that those two become. The difference disappears.

Mandy Binnie: Yes, that's right. What you will see in future years is that those two become. The difference disappears.

Speaker #5: Yep, got you. Okay. I mean, just at a high level, Mike, what do you think the board is trying to signal with the dividend at the moment?

Steven Hudson: Yeah. Got you. Okay. Just at a high level, Mike, what do you think the board is trying to signal with the dividend at the moment? We've kind of got. It's great that you're providing guidance, but we've got a strong start to the year. I think July, EBITDA was up 8%, the dividend's up 8%, and guidance is up 3%. At a high level, what are we supposed to be taking from all of that?

Stephen Hudson: Yeah. Got you. Okay. Just at a high level, Mike, what do you think the board is trying to signal with the dividend at the moment? We've kind of got. It's great that you're providing guidance, but we've got a strong start to the year. I think July, EBITDA was up 8%, the dividend's up 8%, and guidance is up 3%. At a high level, what are we supposed to be taking from all of that?

Speaker #5: We've kind of got—you know, it's great that you're providing guidance, but we've got a strong start to the year. I think July EBITDA was up 8%.

Speaker #5: The dividend's up 8%. And guidance is up 3%. What are we, you know, at a high level, what are we supposed to be taking from all of that?

Mike Roan: Harly, it's confidence. I think that's the key that you take away from the result is higher operating cash flows. We expect those operating cash flows to grow over time. As a result, we expect what we've always wanted to deliver, which is ongoing lifts in underlying dividend. So, I hope what you're taking from it is good confidence in our capacity to produce cash and that cash will continue to fund both the dividend and the growth program.

Speaker #2: Harry, it's confidence. I think that's the key that you take away from the result—higher operating cash flows. We expect those operating cash flows to grow over time.

Speaker #2: And as a result, we expect what we've always wanted to deliver, which is ongoing lifts in the underlying dividend. So, I hope what you're taking from it is good confidence in our capacity to produce cash, and that cash will continue to fund both the dividend and the growth program.

Speaker #5: Okay. Should we also take away the fact that the Waitaki refurbishment is a relatively—how should I say—a confined period? Or is it kind of like a Mercury, 20-year kind of exercise?

Steven Hudson: Okay. Should we also take away the fact that the Waitaki refurbishment is a relatively, how should I say, a confined period? Or is it kind of like a Mercury, 20-year kind of exercise?

Stephen Hudson: Okay. Should we also take away the fact that the Waitaki refurbishment is a relatively, how should I say, a confined period? Or is it kind of like a Mercury, 20-year kind of exercise?

Speaker #2: Yeah, it's really confined. I mean, Waitaki Power Station's 90 years old, so I doubt that I'll see that one again refurbished. Well, I won't.

Mike Roan: Well, it is really confined. Waitaki Power Station is 90 years old, so I doubt that I will see that one again refurbished. Well, I will not. We do not have any other power stations that are nearing that age, Harly, so we do not have anything in our plan that says get out there and refurbish a whole bunch of other hydro power stations. It really is Waitaki. But the beauty of it is the economics of the investment are outstanding. And we will be able to increase the capacity of that station while maintaining strong cash flows through the next 90 years.

Speaker #2: We don't have any other power stations that are nearing that age, Harry, so we don't have anything in our plan that says, "Get out there and refurbish a whole bunch of other hydro power stations."

Speaker #2: It really is Waitaki. But the beauty of it is the economics of the investment are outstanding, and we'll be able to increase the capacity of that station while maintaining strong cash flows through the next 90 years.

Speaker #5: That's useful. Thanks, Mike. Just a couple of other quick ones. The Pukaki contingent storage—I think you talked about a $15 million impact. I'm not sure if that was on the sort of 50% assumption that you provided, that you're going to operationalize sort of 50% and kind of hold back on the remainder.

Steven Hudson: That is useful. Thanks, Mike. Just a couple of other quick ones. The Pukaki contingent storage, I think you talked about a NZD 15 million impact. I am not sure if that was on the sort of 50% assumption that you provided that you are going to operationalize sort of 50% and kind of hold back on the remainder. It sounds like your estimate has pushed higher. Can you update that for us?

Stephen Hudson: That is useful. Thanks, Mike. Just a couple of other quick ones. The Pukaki contingent storage, I think you talked about a NZD 15 million impact. I am not sure if that was on the sort of 50% assumption that you provided that you are going to operationalize sort of 50% and kind of hold back on the remainder. It sounds like your estimate has pushed higher. Can you update that for us?

Speaker #5: It sounds like your estimate has pushed higher. Can you update that for us?

Speaker #2: It has pushed higher, Harry, so I think 15 would be conservative. Where that's lifted to, I would say probably in the order of 20 or 30.

Mike Roan: It has pushed higher, Harly. So I think 15 would be conservative. Where that is lifted to, I would say probably in the order of 20 or 30.

Steven Hudson: Yeah.

Stephen Hudson: Yeah.

Speaker #2: So, not massive, but certainly that opportunity to capture spill in the wire is in front of us. I'm just being a little bit cautious because we haven't done it yet.

Mike Roan: Not massive, but certainly that opportunity to catch a spill in the Waiau is in front of us. I am just being a little bit cautious because we have not done it yet. We have not actually tested the low-range operation and ability to capture that spill. But when you look at the numbers, the 600 gigs of annualized spill down there, and if we can operate the way that we expect to operate, then the opportunity is in that order.

Speaker #2: Right? So, we haven't actually tested the low-range operation and ability to capture that spill. But when you look at the numbers—the 600 gigs of annualized spill down there—and if we can operate the way that we expect to operate, then the opportunity is in that order.

Speaker #1: In fact, and if I can just be clear on that, we have included our initial assumptions on contingent storage in guidance, but have not included anything further on the wire.

Mandy Binny: If I can just be clear on that, we have included our initial assumptions on contingent storage in guidance, but have not included anything further on the Waiau.

Mandy Binnie: If I can just be clear on that, we have included our initial assumptions on contingent storage in guidance, but have not included anything further on the Waiau.

Speaker #5: Thanks, Mandy, Mike. Sorry, just firing off two more quick ones. We've seen some pretty crappy GWAP, TWAPs, and North Island Solar this winter—sort of, I think summer kind of was one, and now we're in the mid-80s.

Steven Hudson: Thanks, Mandy. Mike, sorry, just firing off two more quick ones. We have seen some pretty crappy GWAP, TWAP in North Island solar this winter. I think summer kind of was one, and now we are in the mid-80s. It sounds like Te Rāhui, you are waiting for customer PPA engagement. It is not a peaking factor issue, but I am interested in your view on peaking factors and what your assumptions are across all of your solar developments. Are you surprised to see the sort of decay in peaking factors that we have seen, or is it in line with your expectations?

Stephen Hudson: Thanks, Mandy. Mike, sorry, just firing off two more quick ones. We have seen some pretty crappy GWAP, TWAP in North Island solar this winter. I think summer kind of was one, and now we are in the mid-80s. It sounds like Te Rāhui, you are waiting for customer PPA engagement. It is not a peaking factor issue, but I am interested in your view on peaking factors and what your assumptions are across all of your solar developments. Are you surprised to see the sort of decay in peaking factors that we have seen, or is it in line with your expectations?

Speaker #5: It sounds like you're waiting for a kind of customer, kind of PPA, kind of engagement. It's not a peaking factor issue, but I am interested in your view on peaking factors and what your assumptions are across all of your solar developments. Were you surprised to see the sort of decay in peaking factors that we've seen, or is it in line with your expectations?

Speaker #2: It's in line, Harry, and I want to go back to—I think at the investor day, so it was November 24 that we had the investor day—and we actually provided those price participation factors.

Mike Roan: It is in line, Hardy. I want to go back to, I think at the investor day, so was it 24 November that we had the investor day, and we actually provided those price participation factors as part of the forecast. We provide them for the Waitaki, for Manapōuri, for wind generic, and solar generic. Those factors showed a reasonably quick reduction in participation rates for solar farms, and there has not been anything that has played out that is inconsistent with that forecast.

Speaker #2: As part of the forecast, we provide them for the Waitaki, for Manapouri, for wind—generic—and solar—generic. The factors showed a reasonably quick reduction in participation rate for solar farms.

Speaker #2: And there hasn't been anything that's played out that's inconsistent with that forecast.

Speaker #5: Thanks. Last one, I promise. The NZS contract—just remind me, I think there's some conditional escalation in there. But it kicks in early 2028, is that right?

Steven Hudson: Thanks. Last one, I promise. The NZAS contract, just remind me, I think there is some conditional escalation in there, but it kicks in early 2028. Is that right? We have still got to wait another year before we get the benefit of that escalation.

Stephen Hudson: Thanks. Last one, I promise. The NZAS contract, just remind me, I think there is some conditional escalation in there, but it kicks in early 2028. Is that right? We have still got to wait another year before we get the benefit of that escalation.

Speaker #5: We've still got to wait another year before we get the benefit of that escalation.

Speaker #2: Yep, that starts calendar year '28. And it's reasonably straightforward: is the escalation—are our aluminium prices in '26 higher or lower than 2027? If they're lower, then you escalate.

Mike Roan: Yep. That starts calendar year 2028, and it is reasonably straightforward. The escalation is, are aluminum prices in 2026 higher or lower than 2027? If they are lower, then you escalate. If they are higher, then you hold the price at the level that it is.

Speaker #2: If they're higher, then you hold the price at the level that it is.

Speaker #5: Excellent. Thanks, guys.

Steven Hudson: Excellent. Thanks, guys.

Stephen Hudson: Excellent. Thanks, guys.

Speaker #2: No problem.

Mike Roan: No problem.

Speaker #3: Thank you. There are no further phone questions at this time. I'll now hand back over to Mike Rone for any closing remarks.

Operator: Thank you. There are no further phone questions at this time. I will now hand back over to Mike Roan for any closing remarks.

Speaker #2: Brilliant. I think I said my closing remarks just before. Thanks, everybody, for joining this morning. I hope you got the info you were after. Thanks, everyone in the room, for showing up.

Mike Roan: Brilliant. I think I said my closing remarks just before. Thanks everybody for joining this morning. I hope you got the info you are after. Thanks everyone in the room for showing up. We will see you at interims.

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