Mercury NZ (MRY) Q4 2026 Earnings Report

The call presents a broadly positive operational and financial performance: strong FY '26 EBITDAF (+36%), material generation growth (+15%), disciplined OpEx management, delivery of multiple projects on time and on budget, a strengthened balance sheet (~2.0x net debt/EBITDAF) and an increased dividend (FY '26 +13%). Management provided constructive FY '27 guidance and lifted the FY '30 lower EBITDAF target, while preserving capital discipline. Key risks include hydrology/El Niño uncertainty, some non‑recurring elements in cost savings, timing/FID and transmission constraints for future growth (notably data-center driven demand) and a drilling program whose outcomes will only become clear next year. Overall, highlights significantly outweigh the lowlights, indicating confidence in execution and a positive near- to medium-term outlook.

Mercury guided FY27 EBITDAF of $1,075m (from a reported FY26 EBITDAF of $1,068m, up 36% on FY25; FY26 normalized base ~$1,050m), FY27 ordinary dividend of $0.29/share (FY26 $0.27, +13%; 18 consecutive years of growth) and FY27 hydro generation of 4.1 TWh with stay‑in‑business CapEx of $150m; it raised the FY30 EBITDAF floor to $1.2bn (range $1.2–1.25bn) based on delivered and near‑term projects, assuming a long‑term price of $120–$130/MWh (real FY27$). Key metrics underpinning the guidance include FY26 generation of 9.1 TWh (+15%), ~1.1 TWh of new generation added this year, 87% of FY30 generation contracted, OpEx held at the $370m target (down $26m vs FY25, ~10% real), $710m reinvested (66% of FY26 EBITDAF), net debt/EBITDAF ~2.0x (peak leverage ~2.6x before declining), $610m liquidity headroom, a $75m geothermal appraisal drilling program, a 3.5 TWh by‑2030 build target (including PKH FID: 192 MW, ~$506m capex, $2.6m/MW, first generation mid‑2028), and safety and customer stats (TRIFR 0.31; ~41% of customers have ≥2 products; churn ~13.7%).