New Zealand’s second largest electricity generation capacity owner Contact Energy Limited (NZX: CEN;ASX: CEN) provides electricity, natural gas, solar power and renewable energy. CEN has a market capitalization of $5.9 billion and gave a YTD return of -3.8%.
Contact delivered a strong financial performance in the first half of FY22, recording a 72% increase in statutory profit to $134 million and a 31% increase in operating profit to $322 million. The double-digit growth was attributed to a period of strong hydroelectric production.
The Group’s customer business achieved mass market electricity and gas sales of 298 GWh in March, compared to 277 GWh in March 2021. Wholesale electricity sales under CEN contract totaled 627 GWh for the month, compared to 609 GWh the same month in 2021.
Renewable development initiatives taken by CEN
Contact has entered into long-term power purchase agreements with Pan Pac, Genesis Energy, Oji Fiber and Foodstuffs to support renewable power generation and replace thermal generation. It also has the Southern Green project to explore Southland’s first large-scale green hydrogen plant with another New Zealand energy giant, Meridian Energy.
Source: © Marozhkastudio | Megapixl.com
The Group’s Tauhara Power Station project to increase planned capacity from 152MW to 168MW remains on track and will provide the basis for meeting New Zealand’s increased renewable electricity needs over the next 10 years.
ALSO READ: MEL, MCY, GNE: actions at a glance as New Zealand lays out roadmap for zero-carbon future
CEN has also held land access rights to build wind projects of up to 600 MW. In April 2022, CEN announced that it had partnered with global solar developer Lightsource bp (LSbp) on a series of solar generation projects. These projects aim to create 380,000 MW hours of clean and affordable electricity per year by 2026.
READ: CEN, MCY, GNE: 3 energy stocks as New Zealand explores green hydrogen prospects
The new joint venture is aligned with Contact’s strategy to lead New Zealand’s decarbonisation. Contact and LSbp will announce details of their potential first development site in the coming months and aim to start power generation by 2024.
Contact’s decarbonization strategy
Contact plans to lead the decarbonisation of New Zealand through its Contact26 strategy. The Group is committed to 4 strategic areas on this front, including:
- Growing new industrial demand with globally competitive renewables
- Strengthen renewable energy production and flexibility based on new demand
- Leading an orderly transition to renewable energy
- Created New Zealand’s first energy and services brand to meet more customer needs
A mix of metrics such as high performance across ESG factors, improvement through innovation and digitalization, and the adoption of transformative ways of working can help achieve these goals.
Achieving these goals can help make the Contact business resilient. These goals can bring about a dramatic change in his performance and propel his business down a new path of growth.
On May 12, at the time of writing, CEN was trading at $7.65, up 0.39%.
(NOTE: Currency is shown in New Zealand Dollars unless otherwise stated)
Comments are closed.