Mercury NZ Limited (NS) Analysis

Overview

Mercury (formerly Mighty River Power - NZX: MRP) is a company with a long heritage in renewable energy in New Zealand serving about 1-in-5 homes and businesses under the Mercury brand and other specialty brands, including the leading pre-pay product GLOBUG. Mercury also has proven capability and technical expertise in smart metering services and solar.

Mercury's electricity generation is 100% renewable, with the hydro and geothermal power stations operated by Mercury producing enough renewable electricity for about 1 million New Zealand homes. The nine hydro stations dating back to the 1920s make up the Waikato River Hydro System, accounting for about 10% of the country's total electricity supply that is predominantly hydro.

Mercury led a renaissance in geothermal energy over the past decade with an innovative investment programme in partnership with local Maori landowners, enabling the completion of three major geothermal projects in 2008 (Kawerau), 2010 (Nga Awa Purua) and 2013 (Ngatamariki). These sustainably harness natural heat deep underground, producing steady 'base-load'electricity - normally running 24/7 and are not dependent on the weather like other forms of renewable generation.

The company has established a leadership position in encouraging the electrification of transport, supporting the adoption of e-bikes and electric vehicles, partnering on charging infrastructure and moving 70% of the company's vehicle fleet to plug-in by 2018.

Mercury was publicly listed on the New Zealand and Australian stock exchanges in May 2013 with a large New Zealand ownership base, alongside the Government as majority owner. The company was renamed Mercury NZ Limited (NZX: MCY) on 29 July 2016.

Performance

The following information was extracted from Mercury NZ Limited's half year results, released on 24 February 2026:

HY26 Results

For the half year ended 31 December 2025

EBITDAF $537m

• Up 28% on HY25
• Up $119m on HY25

Earnings Before Interest, Tax, Depreciation, Amortisation and Fair-value movements (EBITDAF) was supported by above average hydro generation and lower operating costs from ongoing productivity initiatives, highlighting disciplined execution and portfolio strength.

NPAT $20M

• Up $87m on HY25

Net Profit After Tax (NPAT) was supported by higher EBITDAF, partly offset by changes in unrealised gains/losses on unhedged electricity derivatives.

DIVIDEND 10cps

• Up 4% on HY25

The interim dividend was 10 cents per share (cps). Full year guidance of 25 cps remains on track. The Dividend Reinvestment Plan (DRP) continues to be offered to shareholders.

RESULTS OVERVIEW

Mercury has delivered a strong HY26 performance and continued to invest in renewables at scale, with half ($270 million) of the company’s HY26 earnings reinvested in new and existing generation assets.

All three of Mercury’s major renewable developments, totalling $1 billion investment, are progressing on budget and on time. The new Ngā Tamariki Geothermal Station unit came online in January, while stage 2 of Kaiwera Downs Wind Farm and Kaiwaikawe Wind Farm are both due to begin generating in 2026.