Mike Fuge: Contact Energy CEO on the company's full-year net profit

One of the country’s major electricity companies is defending their increased profits amid rising energy prices.  

Contact Energy’s full year net profit is up 41%, with revenue up 20%. 

Their underlying profit also climbed 17%, bolstered by a strong lift in geothermal generation as well as improved sales and customer numbers. 

CEO Mike Fuge told Mike Hosking the profits are the result of their investment in major projects that benefit the country, such as geothermal. 

He says they’re actually investing more than what they earned in profit last year. 

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Episode Transcript

Speaker 1 (00:00):
The business basically of having the lights on and the
heater on and winter contacts seem to be doing very nicely,
thank you. Net profits up forty one percent, revenues up
twenty percent, people seem to like them. Connections rows three
point three percent. So you've got six hundred and forty
six thousand customers, Multi product customers up seven percent. Mike
Pooge is the contact CEO and is with us. Mike, Morning, Morning, Mike.

Speaker 2 (00:19):
How are you?

Speaker 1 (00:19):
I'm very well and does that all feel good? You're
fizzing at the moment.

Speaker 2 (00:24):
Look, it's the result of a lot of hard work
in building some serious projects over the last four to
five years and working hard with customers. So yes, we're
very proud of the result. I think it's something to
be stand tall on.

Speaker 1 (00:37):
Manuwa For people who haven't followed this. You sort of
integrate that you bought that. How does that play out
in the future, ah.

Speaker 2 (00:44):
Locke, So we're now integrating the business. But the big
benefit there is the complimentary hydro. They are what we
call winter weighted and in the North Island and our
existing hydro is in the South Island, and so the
two portfolios compliment to each other phenomenally.

Speaker 1 (01:01):
Well, how fine a line do your walk as a
company or as a CEO? We like successful companies. But
your net profits up forty one percent and everyone's going
to go yeah, well I know why that is because
it kin'd of form a power bill.

Speaker 2 (01:13):
Oh look no, look the profits up and we can
reconcile it back. It's due to those projects that we've
worked very hard on building. They're innovative, the g therm
or the base load, they're good for the country and
we want to do more. So No, this is a
result of investment, and we're investing more than what we
actually earned and profit last year.

Speaker 1 (01:32):
Those connections when they go, I mean there's a lot
of customers, six hundred and forty six thousand people. Why
do they come to you? What is going How much
churn is there in the market.

Speaker 2 (01:42):
Ah, look, the churn probably averages somewhere between eighty and
twenty percent. We've got a good telco offering that if
we put around it, and then we also have what
we call the good plans, which give people the three
hours of free power or the free power on the weekends,
and that helps people move their load and it helps
them save costs. And they seem to like that.

Speaker 1 (01:58):
Okay, the battery at Glennok how much of the future
is our battery do you think? Oh?

Speaker 2 (02:05):
No, Look, batteries will form an absolute critical part of
the infrastructure and the going forward. So there's a battery
at Glenbrook. We've applied for resource consent. We've got more
batteries at Glenbrook. They will take the edge of the
morning and evening peaks and just leave the gaspeakers to
run what we call the shoulders over the autumn and spring.

Speaker 1 (02:25):
And you've also got to out. I don't know if
you've seen it, but at Prince King Charles has got
a massive solar farm at Kensington Palace now in a paddock,
and I saw it the other days. I just cannot
visually get my head around it. They're ugly, is that
a thing or not?

Speaker 2 (02:40):
Really? Look, you put them on land which is not
otherwise going to be used, and just absolutely perfect. You
can actually run agriculture in between the panels, but you
put them on land which is otherwise So that's why
we're putting it in the land round christ to a
chairport that's otherwise fallow land, so you may as well
use it for something product, So no one.

Speaker 1 (03:01):
It's not going to be a thing eventually where people go.
You know what, there are just too many of them
and it's ugly, so that won't begin.

Speaker 2 (03:08):
No, No, Unfortunately New Zealand, looking at the weather out
there this morning, we don't quite have the resource. They
will be part of the system. We will build a few,
but looking at the rain out there this morning, they're
not going to become the thing and dominate the landscape.

Speaker 1 (03:22):
The electricity Authority is I'm sure you will. We're announced
some sort of investigation. What's going on. You've got the
concom there, you've got Nicola in the background. But the
vibe in the industry generally are things what are they? Tense?
Business is usual.

Speaker 2 (03:35):
Look, we always have to keep an eye on what
stakeholders say, and so we acknowledge that. And that investigation
was prompted by the stress in the gas market and
gas apply and we understand that. But really, look, the
big thing now, we're booming in terms of renewable energy build.
We want to keep building. As I said last night,

(03:55):
it's created strong economic growth in towns like Taupo, and
if we can continue out across the whole country, that
would be a great thing, good.

Speaker 1 (04:04):
Stuff and like us to talk to you as always.
Mike Fushi is the YouTube executive officer at contact Indergies.

Speaker 2 (04:08):
For more from the mic Asking Breakfast listen live to
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