Oliver Mander: Shareholders Association CEO on Contact Energy's annual profit, potential data centre

Contact Energy's putting serious thought into data centres after reporting record earnings.  

The gentailer's made $423 million annual profit – up nearly 28%. 

It's now in talks with Australian firm CDC Data Centres for a 250 megawatt data centre in Taranaki. 

Shareholders Association CEO Oliver Mander told Mike Hosking that the companies looking at data centres are investing heavily in growth, and Contact is no exception. 

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Episode Transcript

Speaker 1 (00:00):
The average New Zealand property residential property value down one
and a half percent in the three months to the
end of July. This is the report out yesterday from
qv SO down one and a half percent in three months. Now,
remember Labor needs three percent growth in housing prices per
year to fund the doctor's visits that they have promised

(00:22):
on the campaign. So and it will be interesting to
see depending on where you live in New Zealand, if
your house prices are going up and then you need
to sell your house and it's a second house, then
you will be paying the capital gains tax which will
be funding the doctor's visits for I don't know. Some
rich list are living in Herne Bay. Three of them

(00:42):
per year is what they are entitled to under Labour's policy.
So they have some questions to answer about that, because
if you're dropping one and a half percent in three months,
we will wait to see what the annual average is.
But remember they need three percent. That is what their
calculations are based on three percent increase per year. It
is fourteen after five. Right, let's go to contacts. They've

(01:05):
reported a record net profit four hund and twenty three million,
up nearly twenty eight percent operating earnings topping a billion.
This is thanks to in part, the one energy takeover
and stronger renewable generation.

Speaker 2 (01:18):
They are a solid return on some very prudent investments
and our shareholders should be happy with that. But they
are also made Remember that also came with an increase
of our renewable generation to ninety eight percent.

Speaker 1 (01:30):
Olive Amanda is Shareholders Association. See you over me this morning, Oliver.

Speaker 3 (01:33):
A good morning water, Bryan.

Speaker 1 (01:36):
So are you happy with that? Their full year dividend
up three percent forty cents a share.

Speaker 3 (01:41):
Look, it is a pretty good result. The dividend has
increased to forty cents. It's interesting that they're still holding
something in reserve for their dividends. They're only paying it
out at sixty five percent of their operating free cashloads.
If policy gives them leads to pay out quite a
lot more than that. That probably reflects of it. They're
trying to correct that funding optional for those projects that
they have going forward.

Speaker 1 (02:02):
It's interesting listening to what they're saying in regards to demand,
like they you know, obviously you need prices to be
you need some demand, don't you end when you have
a whole bunch of businesses going offline who are demanding
you need something to replace it with and they're looking
to data centers amongst other things.

Speaker 3 (02:21):
Look, I mean, that's that's really interesting I made yesterday
in terms of the potential option they're looking at with
CDC in Stratford and yeah, look New Zealand and we've
seen that in Southland as well. At the moment we
see investment in data center in data centers in Southland
and the generation that goes along with that. So you
know that that is another lever for New Zealand and

(02:43):
to consider in terms of its future electricity demand as well.
And it's the way and I think I've said this
before iron these these companies are currently growth companies, so
investing heavily in gross contacted and no exceptions. Gross capex
this year was three hundred and seventy five million, and
they're talking about the increasing that next year to somewhere
around that four sixty four to seventeen million mark.

Speaker 1 (03:04):
How investors reviewing seeing the result.

Speaker 3 (03:08):
I think investors should should probably fairly positively as a result.
There's noise in there because you've start digesting here the
money or acquisition and that's if you strip that out,
you've got to sort of got that seventeen that ebit's
forge and interest in tax figures not quite as spectaculous,
but it's still around seventeen percent. And similarly for the profit,

(03:30):
there's noise in that in terms of increase in profit,
both for some underlying issues and from money or itself.
Be still talking about an underlying increase of somewhere between
somewhere that's thirty percent mark, which is which is really
pretty good for consumers. It's interesting because there's a signal
that in the forward market that's just that the wholesale

(03:52):
prices are reducing. They won't always flow through directly to
consumer bills because there's other factors in there like transmission
and distribution cost, but it could be that's pointing to
some relief and residential power price increases into the next
year as well, which is interesting.

Speaker 1 (04:08):
Oliver Good to have on the show is always Oliver
Amanda Shareholders Association.

Speaker 3 (04:12):
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