Contact Energy Limited (CEN) Earnings Call Transcript & Summary

[Foreign Language]. Before we begin, I'd like to open our Annual Shareholder Meeting with a short [Foreign Language]. The Mahi acknowledges everyone gathered here today and the different perspectives we bring while inviting us to come together with a shared sense of purpose. [Foreign Language]. I'd now like to offer karakia to open our meeting. This [ karakia ] is about grounding us as we begin our meeting today, looking beyond ourselves and seeking wisdom, well-being and peace for everyone get it here today. [Foreign Language]. We will now close with our [ contact water ] and as the team come forward. This water speaks of what comes from above and below, bringing life to us all a fit in connection to the natural sources of energy that sustain us. [Presentation] [Foreign Language].

Good morning to you all. My name is Rob McDonald, and I'm the Chair of the Contact Board. On behalf of the Board and all the contact team, I'd like you to welcome. I'd like to welcome you to the 2026 Annual Shareholders Meeting. This meeting is being webcast live for shareholders who have not been able to attend in person. And I also extend a warm welcome to those who are watching online. For those guests who are here in person, in the unlikely event of a fire alarm, please make your way out of the auditorium, the same way you came in. turn right and exit the building via the glass doors to -- on to Akon Street, there is an exit beside [ election ] that leads to Akon Street once outside, turn right and hit towards [ Moles ] Street and then follow the footpath 100 meters to the gathering point at the courtyard or in the front of Rugby House. The event of an earthquake immediately assumed the brace position by leaning forward in your seat and placing your hands on the back of your head. Once the shaking has stopped, wait for instructions from the library staff as evacuation may not be necessary. Toilets are located on either end of the year as you exit the auditorium. I'd like to introduce the others with me on the stage. Firstly, to my right is our Chief Executive, Mike Fuge; to my -- and my fellow Board Directors, David Smol; Rukumoana Schaafhausen, [ Alison Baris ], John Macdonald, David Gibson, Sandra Dodds and Deion Campbell, are the members of the Contact senior leadership team are also here today as well as representatives from our auditors for 2026 EY. As you have noted, today's meeting started with a greeting from Rukumoana, followed by Context Waiata, which is customarily sang to embellish greeting. For contact, it is important to acknowledge our relationship with Tangata Whenua and our shared commitment to the sustainable use of New Zealand's incredible natural resources. Today's meeting will start with addresses from me as Chair and from the Chief Executive, Mike Fuge. Then we'll move on to the resolutions that are outlined in the notice of meeting. We have 4 resolutions to put to the meeting today, and these resolutions will be decided by taking a poll. There will be an opportunity for shareholders to ask questions relating to these resolutions and to raise any additional matters they may wish to discuss. EY audit partners are present today and should shareholders wish to have questions to put -- sorry, today's meeting should shareholders have questions to put to them. Only shareholders and proxy holders can ask questions. Once the resolutions are introduced, we'll invite questions. We have some microphones available. If you wish to speak, please raise your hand and wait for a microphone to be brought to you, so we can hear your question. As we have a number of shareholders in the room and also on line, I would ask you to limit your questions to 2. All shareholders participating online can ask questions during this meeting. I encourage you to send through your questions as soon as you can. This will allow us to answer these questions at the appropriate time of the meeting. Questions may be moderated or if we receive multiple questions on the same topic, they may be amalgamated. If we can't answer a question in this meeting, we'll answer it in due course via e-mail. I'll provide you with further instructions relating to voting as we progress through the meeting. For those online, if you counter any issues, please phone in the helpline 0800-200-220. Now with the housekeeping done, let's get underway. [Foreign Language]. On behalf of the Contact Energy Board of Directors, I'd like to begin by thanking our people, our customers and you our shareholders for what has been a very strong year. It has been one defined by bold decisions, accelerated investment and continued growth. When I joined the Board, contact was already an important part of the New Zealand energy sector. Today, it is a fundamentally different company. We have transformed our generation portfolio, reshaped our strategy and established ourselves as a leader in New Zealand's renewable energy future. Most importantly, we have demonstrated an ability to turn ambition into delivery. 5 years ago, we launched Contact 26, our strategy to be a leader in the decarbonization of New Zealand. Major investments in geothermal, solar and battery storage have strengthened Contact's portfolio and positioned us to meet New Zealand's growing demand for clean energy. The successful integration of Mana Whenua Energy has strengthened contact position. It has expanded the scale and diversity of our renewable portfolio, and I'm pleased to report that the benefits of this acquisition have exceeded our expectations. Together, the combined portfolio of Contact and Mana Whenua provides greater flexibility resilience and opportunities for future growth. Contact 31 plus our new strategy to lead New Zealand's renewable energy future was unveiled last November. It will create more long-term value for customers, our communities and our shareholders. Mike will talk more about Contact 31 in his speech. Standing here today, it is a time for personal reflection after more than a decade as a director and 8 years as Chair. The time has come for me to step down. To understand contact today, you need to understand the past. Contact was born 30 years ago with the rump of the assets of the old Electricity Corporation of New Zealand. It was supposed to fail. It was a collection of leftovers. Some said the worst of the old system. There was summer-weighted hydro generation on the Clutha River, and Wairakei geothermal power station, which had been built in the post-war economy. Slowly over the first 2 decades, Contact acquired and built more geothermal and thermal generation assets as well as added a retail business. I'm pleased to be part of this journey over the last decade where Contact has built a world-class geothermal operation, new solar and battery farms and acquired a diverse set of hydro dams across New Zealand to complement our portfolio. From assets once described as second best, Contact has built one of the best energy portfolios in the transition and the opportunity ahead. It did not happen by accident. It happened because people over the decades across the company made bold decisions stuck with hard projects and had the courage to keep moving forward. Too often, I hear claims from detractors that the industry is not investing enough. The trouble with that is if people or profile say such things Others believe it to be true. It is not. Here's the reality. The industry has never been spending or building more than now. We are investing more than ever in the history of New Zealand. It puts think big in the shade. On a per capita basis, it is more than the United States, China, U.K. and Australia. As a sector, 4 terawatt hours of new renewable generation projects have come online in the past 5 years. A further 3 terawatt hours is either committed or under construction and expected to be online by 2027. It is important that this path remains clear and allows the sector to build out New Zealand's renewable energy future. It is this way we move towards energy independence as a nation. The solution to stabilizing the country's energy prices and ensuring New Zealand's electricity is reliable and renewable is more energy capacity, and that comes from more investment. In this context, I offer another insight good policy eats ideology for breakfast. The oil and gas ban in 2018, in my view, is characterized as an ideology that triggered a loss of investment confidence and industry capability, leading to an acceleration of the decline of the existing fields. It led to a number of unintended consequences. Higher gas and electricity prices gas shortages, industry closures, increased emissions from coal. Ironically, the electricity industry, particularly the main players that have launched that have launched and is solving the consequences. There's been much discussion and political rhetoric about structural separation of retail businesses from gen tailers. Let me give you some personal observations. The businesses follow the electricity -- sorry, the businesses following the Electricity Authority latest rules are indeed structurally separate it. To separate further, we'll create additional costs that would ultimately be borne by consumers by everyday people of New Zealand. Again, ideology over a good policy has the potential to damage the investment climate for the industry as a whole. It is time for non-gen tailor retailers to step up and use the hedging products now available. On the back of record levels of generation investment, the wholesale market has gone through a significant transition this year. Wholesale prices have reduced by around 30%, bringing the market back into balance. The market has been allowed to function as it was designed and the government has resisted unfounded calls to fundamentally alter the investment conditions. Analysis done for the government by sense partners shows that electricity prices at this level will bring a $10 billion boost to the country's GDP by 2030. This outcome matters not only for the sector, but for New Zealand's wider economic resilience, competitiveness and long-term prosperity. In respect to retail prices, the wholesale price component of the retail bills are now in line with the long-term market pricing. Unfortunately, the material increases in line and transmission prices has and will continue to contribute to price increases. I encourage the government to renew -- sorry, to review the economic regulation of natural monopolies across the economy. There is another opportunity we should not shrink from data centers and compute security. New Zealand has a chance to build sovereign digital capability attract new investment, create new skilled jobs and use new renewable energy to support it. If we choose to be knockers and blockers, New Zealand risks becoming a back quarter and an AI-driven world. If we choose to be builders, we can create a new export industry powered by renewable energy, we should say it plainly. Data centers do not steal power from New Zealand. Properly structured, they will bring new energy demand that underwrites new energy supply. They can turn renewable energy into a modern export in the same way this country exports aluminum, steel and dairy to the world. Today, I leave Contact excited as well as grateful. Said, yes, because these are extraordinary times. But confident because Contact is well placed to create value for shareholders while helping lead New Zealand to the next phase of the energy transition. I also want to briefly reflect on the role of the Board. Boards can be cautious by nature. Sometimes that caution is necessary. But a Board should not be a handbrake on ambition. Its role is to set the guardrails, test the strategy, point the right Chief Executive and then give management the confidence to get on with it. The most important decision a Board makes is appointing the Chief Executive. No strategy can compensate for the wrong leader. Mike Fuge joined at a time when contact needed pace, conviction and a more forward-leaning posture under his leadership and with the strength of the leadership team around him, contact has matured into an industry-leading company with a clear strategy and a real delivery capability. When I joined the Contact board, the company was still finding a strategic voice. Today, the conversations are sharper, the choices are clearer and the ambition is matched by capability. Contact is no longer drifting towards a distant third place, it is a strong #2 with momentum. But it's not really about rankings. It is about the difference between leaning into growth or standing still. Contact has chosen growth. As I reflect on my time as chair, I'm proud that contact came out of its shell. We leaned forward. We strengthened the brand and we became more confident in retail. We showed character through initiatives such as our partnership with women's refuge and the good initiative. And we demonstrated that a great company is measured not only by what it earns but by what it stands for. To the board, thank you for the debates, the discussions and yes, the disagreements. Good decisions are really made by everyone nodding politely. They are made when capable people test the issues honestly and then unite behind the decision. Most of all, I leave with confidence, confidence in the strength of the business, confidence in the people who lead it and confidence in New Zealand's renewable energy future. It has been a privilege to serve as your Chair. I want to acknowledge my fellow directors, past and present, and warmly welcome John Macdonald, who will lead the Board to its next chapter. I know the Board is in capable hands. To our shareholders, thank you for your trust, your support and your belief in this company. [Foreign Language]. I'd now like to invite the Contact Chief Executive, Mike Fuge, to address the meeting. Thank you, Mike.

[Foreign Language]. Thank you very much, Rob, for those kind words. I'm absolutely delighted to be here with you all today and to share not just my reflections of what has been a strong year for contact of a busy one, but also what lies ahead. 5 years ago, we committed to being a leader in the decarbonization of New Zealand with Contact 26, a bold strategy that began during the pandemic when our world was locked down and our home became our everything, our world. Since then, we have bought 1.9 terawatt hours of baseload renewable energy to the market, completing 2 new geothermal power stations in telco together powering the equivalent of over 260,000 kiwi homes. Our first grid-scale battery is online, and our first solar farm Kowhai Park and Christchurch is now sending electrons to the grid. We have successfully completed the acquisition of Manawa Energy, and we have proactively decarbonized our own portfolio. We have seen significant growth in the numbers of everyday Kiwi who choose to connect their homes to us. As of the 30th of June Contact had 690,000 customer connections across electricity, gas, broadband and mobile, and this number is now well over 700,000 as we speak today. Last month, we were named Energy Retailer of the Year in the Annual Energy Excellence Awards, chosen independently by the judges this recognition reflects the strength of our customer offering. In the electricity sector, the momentum behind the renewable energy investment is now flowing through to lower wholesale future prices that matters. It moves New Zealand closer to energy independence, and it gives our businesses, industries and the wider economy, a stronger competitive edge. As Rob mentioned, the impact of this is predicted to have a multibillion dollar boost to New Zealand's GDP by 2030. So let's look at our financial results. Today, we are fundamentally bigger, more resilient company. Our strong FY '26 performance and generation growth reflect both the completion of Manawa -- and the impact of our ongoing renewable investments. In FY '26, we have reported a net profit of $423 million and operating earnings EBITDA of [ $101.1 million ]. The result was underpinned by a significant lift in our renewable generation. The result also reflects a rising return on invested capital as we invest in high-quality projects with a continued intense focus on capital discipline and good solid returns. Whilst more, we are incredibly pleased to share that 98% of the energy that Contact generated in the last year was from sustainable renewable sources. Just 5 years ago, this was 81%. As a result of this year's financial performance, we will deliver investors of $0.40 per share annual dividend, up 3% on the previous year. With our Contact 26 strategy delivered we have launched Contact 31 plus our new strategic road map for the next 5 years and beyond. Our ambition remains to lead New Zealand's renewable energy future, creating long-term value for our customers, communities and shareholders. We will do this by extending our advantage as New Zealand's geothermal leader, leading into new flexibility, building new demand with wind and solar, in particular, and leading the energy transition at home. This will be enabled by empowering our people, our leaders and growing relationships with our stakeholders, leveraging technology and continuous focus on increasing productivity and operational excellence. I have huge aspirations for New Zealand and the part that energy the renewable energy economy can play in powering, manufacturing and growing the country's export earnings. Demand for renewable energy is occurring at a scale that supports ongoing investment in generation, storage and infrastructure. Over the last 5 years, Contact has committed more than 2.4 billion to renewable energy projects. and it's already bought 1.9 terawatt hours of new energy to market. And there's more to come. With an 11 terawatt hour development pipeline across wind, solar and geothermal as well as 700 megawatts of grid scale battery options. And looking at the other side, manufacturing, we have some significant agreements in place. We have signed not 1 but 2 new agreements with the industrial giant New Zealand Steel extending our long-term partnership and a shared commitment to the country's renewable energy future. The latest 50-megawatt demand flexibility agreement will reduce demand in peak winter period, so winter can be directed to where it is needed most. We've leased additional land at the company's Glenbrook site next to our new 100-megawatt grid scale battery and have started construction on an additional 200-megawatt battery right next door. In May, we signed a letter of intent with Rio Tinto to support new generation and grow demand. This supports the restart of the idle fourth potline at the New Zealand aluminum smelter at TY. Under this proposal, the smelter could in the development of our now consented Southland wind farm as well as increased New Zealand's export earnings. This month, we started our 10-year supply agreement -- electric supply agreement with Fonterra for their for lower site in Taranaki. Contact will supply Fonterra with around 415 gigawatt hours per year of renewable electricity. I mentioned earlier that Kofi Park and Chirstchurch is now extending electrons to the grid. The dairy company, Sunlay will buy 25% of the energy generated from a new Kowhai Park solar farm. Our investment continues at pace. In Taupo in April, we began a $30 million drilling program to support the -- that proposed Tauhara to geothermal plant. [ Tomehetu ] is now a year into construction, the $712 million project will replace the iconic Wairakei geothermal power station in stages and generate enough renewable electricity to pay out the equivalent of 120,000 kiwi homes. Kowhai Park developed with Lightsource BP opens of virtually next month. Our second solar farm with Lightsource BP is now underway at [ Garet ] north of Aukland on the [ Kipa ] Coast and we were delighted to learn late last week that the Environment Court have approved the resource consent for the Stratford Solar Battery Farm, our third joint venture with Lightsource BP. Meanwhile, in May, our first wind project, the South and wind farm was consented. It will strengthen New Zealand's energy security, support households and businesses and create renewable generation and regional economic growth. Our first grid-scale battery Glenbrook Ahuroa 1 is more than new infrastructure. This 100-megawatt storage system represents a shift in how we power New Zealand's future. As we move towards a highly renewable system, flexibility from assets like these batteries will support energy security and resilience. It also reduces exposure to global energy shots, building a more independent energy system for TLR. Now to our retail business. We have worked hard to ensure the renewable energy transition is as affordable as possible for Kiwi households. New Zealand has continued to make competitive choices with our good plans. With more than 1/3 of our customers opting for free or discounted power in return for off-peak use. Since we launched our time-of-use plans to the market in August 2021, customers have benefited from more than 403 million hours of free power. Doing the right thing by the most vulnerable is incredibly important to us as well. Last winter, we quietly launched the good initiative, a $5 million fund to support communities and customers in need. In this first year, this grassroots program has partnered with 60 community agencies covering the cost of energy and provided more than 23,000 instances of support to households who are finding it tough. This year, we are increasing the good initiative by funding by 50%. Contact Energy is powered by 1,400 team members who come to work every day passionate about the role they have in leading New Zealand renewable energy future. Today, we have 3 major renewable projects under construction. While next year, that number could well double. It's our people behind them, our people helping deliver the electricity New Zealand needs to power our renewable energy economy. And as I turn to the next 5 years, our focus is on deploying and retaining the very best of the best. Some companies have indeed got to where Contact is today with growth in proven delivery, but not many have pushed beyond that without tripping over their shoe lasers. We need to attract and retain the very best of the best in terms of ability and capability in New Zealand home. Last Thursday, we were delighted to be named as 1 of the top 100 workplaces in the world. to be recognized as 1 of the 2026 Global Top 100 inspiring places to work is testament to the leadership of our people experience team, led by [ Jan Bibby ]. We continue to work -- we're continuing our work with CDC to explore a potential 250-megawatt data center at Stratford and Taranaki. We believe Stratford shapes as an ideal location to explore an energy and digital hub powered by renewable energy from where the local Taranaki economy can thrive and the wider energy of New Zealand can benefit. Data centers unlock more investment in solar, wind and geothermal power stations, along with strengthening and spreading the cost of critical infrastructure that transports the energy they need in terms of lines and transmission. If we can get this going and attract data centers to New Zealand, we have, as an industry, identified more than enough conventional renewable energy to rebuild the grid over again, one that is equivalent to 2x the Maui gas field when it was first discovered and will be with us not for 60 years, but forever, creating even more economic growth for our Tamadiki and Mocapuna. With this potential project, we expect around 600 jobs at peak construction, like we saw at Tauhara and Taupo. When operational, it's anticipated more than 100 high paid skilled workers will be employed. That's 4x more than were employed at TCC. New Zealand's renewable energy system has so much potential. What we see is further opportunity, the opportunity to tell our story globally to encourage more invest investment to build a stronger economy to show just what is possible for -- at to lift our aspirations as a nation and play our part in economic growth and prosperity for all. Finally, I would like to take a few moments to pay tribute to Rob, our chair, who at the end of today's meeting steps down. Thank you, Rob, for your governance, wisdom and leadership over the last decade. Often in New Zealand, what counts is not who is at the table and who's talking, but who's not at the table and who is not talking. This is Rob. I have really appreciated your wise counsel strong challenge, an absolute quite unflappable demeanor in tough times and unwavering support through challenging times as the company has led the transition away from fossil fuels. He has been the archetypal Chairman, quiet influence that gentle word of encouragement, that quiet question, which cuts through a clear strategic issue. He has been the master of understatement when some of us would say aggressive growth, he would say quietly lean into opportunities when some of us would say outstanding financial results, Rob would always say, solid, well done. Your advocacy on behalf of the wider sector, your deep humanity and your absolutely decent see in respect of others and our critical stakeholders and the under privilege of this nation has not gone unnoticed. And to our people, thank you for your extraordinary work. I am proud of you and all that you have delivered in this last year. [Foreign Language]. Thank you. [Presentation]

Okay. We will move on to the formal resolutions for the meeting. These are outlined in the notice of meeting sent to shareholders in August. Voting on the resolutions will be by poll. Each resolution will be put to the meeting with the proxy voting results displayed on the screens. For those of you here with us in Wellington, you'll be able to cast your vote by filling out the voting card you received at the registration desk on your way in. This card will be collected at the end of the formal part of the meeting. If you're a shareholder or a proxy holder and did not register on arrival or wish to vote, please make your way to the registration desk and our staff from the share registry will assist you. If you're both a shareholder and a proxy holder or a shareholder company representative or have more than 1 holding, you would have received a separate voting card for each holding. When you vote on the resolutions, please complete all the voting cards given to you at registration. For those attending the meeting online, to vote, you'll need to click get voting card within the online meeting platform. You'll be asked to enter your shareholder or proxy number to validate. Once you have made your selection, please click submit vote on the bottom of the card to lodge your vote. Please refer to the virtual meeting online portal guide or use the help line specified if you require assistance. Voting will remain open for 5 minutes after the conclusion of the meeting. Each resolution set out in the notice of meeting as an ordinary resolution and requires approval by a simple majority of votes cast by shareholders entitled to vote and voting on the resolution. For the information of shareholders, the proxy votes received for the 4 resolutions will be displayed on the screen as we discuss and then vote on each resolution. We have 2 directors who are retiring by rotation and are standing for reelection today. David Smol and Rukumoana Schaafhausen. We also have a new director, Alice Embarrass, standing for election by shareholders for the first time. The Board unanimously recommends the shareholders vote in favor of the election of each of these directors. Our first resolution today relates to the reelection of David Smol. It is my pleasure to move that David be reelected as Director of Contact. I'd now like to invite David to speak in support of his election.

[Foreign Language]. Thank you, Rob. As Rob said, my name is David Small, and it's a privilege to have this opportunity to stand for reelection as the Director of Contact Energy, a Board, which I was first elected in 2018. I've had a long association with Contact. My first involvement was as part of the team that established the company back in 1996, working with the rent assets of the Electricity Corporation Less as Rob described it earlier, it wasn't exactly how we thought about it at the time, but there is definitely an element of truth in what he said. If we appointed to the Board, I will be deeply committed to implementing Contact 31, our strategy to lead New Zealand's renewable energy future, decarbonizing the energy system while maintaining security of supply and affordability for our customers, enabling economic growth through electrification and creating value for our shareholders. Currently, I'm a member of the Audit and Risk Committee and Chair of the Health, Safety and Environment Committee. The health and safety of all our people and the people with whom we interact is a paramount focus for the Board and the executive we are continually looking for ways to strengthen our health and safety system. And being a responsible steward of the environmental resources we used to generate electricity is also a priority for me. I believe I have a lot to contribute to contact as a director. I'm an economist by training of accumulated extensive senior executive and governance experience. The intersect has been a big part of my career since the 1980s, and I find it fascinating now as I did back then. We've got a demonstrated track record in the development and execution of strategy, leading large and complex organizations, understanding the economics of electricity systems, risk management, evaluation and delivery of major projects and operating in regulated industries. I've been careful to organize my commitments to ensure that I have capacity to do for Justice to [ Miro ] with Contact and I will continue to do so if I were to serve another term as a director. It will be an honor to be reelected. Thank you very much for your consideration. [Foreign Language].

Thank you. Are there any questions in respect of dated election. Are there any questions in respect to David's election.

There are no questions online from shareholders.

Please now complete your voting card beside Resolution 1. Please select any of the for, against or abstain in the appropriate place of the voting card, and that will apply to all other resolutions as well. Okay. Let's move to the second resolution. Our second resolution today relates to the reelection of Rukumoana Schaafhausen. It is my pleasure to move that Rukumoana be reelected as Director of Contact. I'd now like to invite Rukumoana to speak in support of her election.

Thanks, Rob, [Foreign Language]. Thank you for the opportunity to address you all today. I am seeking reelection as a Director of Contact Energy, and I remain strongly committed to context ambition to build a better tied by leading New Zealand's renewable energy future. I bring more than 30 years of governance and leadership experience across EU, public and private sector organizations. That breadth has talked to me the importance of being able to see issues from different perspectives commercial, community, environmental and to generational and importantly, to bring those perspectives together around the Board table. I believe that is particularly important for context. Energy sits at the heart of New Zealand's economic and social well-being. The decisions we make today about generation, infrastructure and investment will shape our country and our communities for generations. We have some significant challenges ahead of us, ensuring security of supply, maintaining affordability, continuing to invest in renewable generation and supporting the electrification of growth of the New Zealand economy, but also see enormous opportunity. As you've heard in the results today, Contact generated 98% of its electricity from renewable sources last year. The question now is how we build on that position, investing wisely, supporting greater electrification and ensuring the benefits of that transition out more broadly across [ Alto ]. I bring to the Board a strong commercial and governance lens, but also a deep understanding of communities, Tangata Whenua and the importance of enduring relationships. I am comfortable working across different perspectives, asking difficult questions when needed and looking beyond the immediate decision to its longer-term consequences. For me, good governance is ultimately about stewardship. We need to deliver sustainable value for our shareholders while leaving the organization, our communities and our environment stronger for those who come after us. I am proud to have served on the Contact Board and with your support, would be privileged to continue contributing to Contact's long-term success and to the energy future of Atara. [Foreign Language].

Are there any questions in respect of Rukumoana's election?

There are no questions online in relation to this resolution.

Please now cast your vote for Resolution 2. Our third resolution today relates to the election of our newest contact. Director, Alison Barrass. It is my pleasure to move that Alison be elected as a Director of Contact. Alison was appointed to the board on September 1. This year, under the NZX listing rules, she is required to stand for election by shareholders at today's meeting. I'd now like to invite Alison to speak in support of her election.

Good morning, everyone. It's a pleasure and a privilege to be standing for election to the Contact Energy board. I thought it would be helpful to start by telling you a little bit about myself and why I feel I'm in a strong position to bring value to Contact Energy. I've been working full time in governance for 12 years now in a variety of complex industries such as telco, infrastructure, financial services and the primary sector. I have a background in fast-moving consumer goods for 30 years in executive leadership roles, including the last 15 as CEO, with a keen focus on health and safety. As a director, I have an interest in emerging technology and sustainability and a passion for New Zealand businesses that have the opportunity to contribute to the growth and prosperity of our country. I'm also interested in how companies can build lasting consumer connections in an increasingly automated world and in emerging generation technologies and their potential to further decarbonize New Zealand's energy system. I greatly admire the work of Contact's board and management in driving growth for this business. The growth brings challenges. The sector will need to continue to manage its risks and opportunities well to keep delivering for stakeholders and communities across New Zealand. The world is without doubt an increasingly challenging place. There is really a day in business when we are not considering the impact of geopolitics, rapid technology transformation and changing climatic conditions. Some changes work in our favor and some don't. Either way, our job is to build in resilience. We need to be constantly looking out and ahead. We need to be eyeing the horizon, harnessing its possibilities and navigating the risks to be asking the difficult questions and persevering until we get answers. It's not luck that creates great businesses but hard work and commitment. And that's the promise I make as I stand for election to this board that I'll work hard for this company and our shareholders. I'll be a voice around the Board table that looks ahead, challenges the business and pushes our people to deliver the best possible outcomes. I'm humbled to be standing for election here today. [Foreign Language].

Are there any questions in respect to Alison's election?

And there are no questions online in relation to this resolution.

Please now cast your vote for Resolution 3. The last resolution to be considered relates to our auditor. I move that the directors are authorized to fix the fees and expenses of the auditor. EY is Contact's auditor and this resolution proposes that the Board is authorized to fix the remuneration of the auditor, which is the conventional practice for New Zealand-listed companies. It reflects the fact that the level of the auditor's workload and, therefore, fee may change from time to time to take into account the changes in company size or complexity or changes in more I now invite discussion on the resolution.

We have 1 online question. Audit fees have increased substantially this year. 2023, $719,000, 2024, $764,000, 2025 $947,000 and 2026, [ $1,274,000 ]. We appreciate the purchase and the integration of Manawa Energy, but can the Board give reassurance that these fees will not continue to rise at the pace over the next few years. This is a question from Jennie Miller.

Thank you for the question. And I should say that over that period, people will appreciate that there has been both the acquisition of Manila, which has at its size to the company and also integration costs as well as capital raises over that period as well. So that has also added. But the other addition is, of course, climate reporting over that period as well, which is undertaken by EY. I don't think I can give assurance about the audit fees going forward, but I would expect them subject to normal activity of the year now to be at a level which I would see sort of not going forward and increasing at the same pace and subsequently unless there's a material change in activity.

No more questions.

Please now cast your vote for Resolution 4. Staff from our share registry will now collect your voting papers. Please place your voting paper in the ballot box as they are passed around. Shareholders participating via the virtual meeting should now submit their votes online. Voting will remain open until 5 minutes after the conclusion of the meeting. Just pause for a minute as the votes are collected. The votes will be counted and the results announced to the NZX and ASX later this afternoon. It is now my pleasure to introduce you to Jon Macdonald, who my retirement from Contact at the end of this meeting will be taking on the role of Board Chair. Jon?

Coto. Thank you, Rob, for your kind words earlier. And while I know Mike also did this, I would like to acknowledge all that Rob has done for contact over his decade as a director and 8 years as our Chair. Rob leaves contact with the company bigger and better in every way. And looking at just 2 key dimensions, the market capitalization or essentially the value of the company has grown from around $3.7 billion when Rob joined to around $9 billion today. Over that time, our carbon emissions have reduced by approximately 80%. Beyond the numbers, Rob leaves a company with clarity of purpose, good momentum and a strong sense of its role in New Zealand. He has chaired the Board with great judgment and care. On behalf of the Board, and shareholders and the wider contact team, I want to thank you, Rob, for your leadership and service. For my part, it's a privilege to step into the role of Chair of Contact. I do so with great respect for the responsibility and with great confidence in the company. I know Contact Energy well. I've served on the Board for the last 8 years, and over that time, I've been wholly supportive of our strategy and direction. I hear Rob's earlier words about the role of the Board. And my aim as Chair will be continuity of good governance strong execution and careful stewardship of the company. Contact has a clear strategy to lead New Zealand's renewable energy future and the achievements of Contact 26 provide a strong foundation and Contact 31 sets out our next phase of growth. Our particular focus for the Board will be making the most of our pipeline of potential renewable energy projects while ensuring we have good line of sight to the electricity demand that will support that generation. As we think about new electricity demand, Contact will continue to work hard to help New Zealand companies decarbonize. We will also continue to explore the opportunity around data centers, as Rob and Mike have spoken about in some detail. We see the potential for data centers done well to be a meaningful industry for New Zealand, providing good opportunity and jobs in our regions. Jobs during the construction phase, jobs directly related to the operation of the data center jobs in the resultant generation projects for the additional energy and jobs in related and supporting industries. More broadly, Contact has an important role to play in New Zealand's energy transition, but we must fulfill that role in a way that keeps customers and communities with us. That means working hard to make energy more affordable for New Zealand families and for industry while continuing to invest for the long term. We get it that a lot of kiwis are doing it tough and we get it that a lot of industrial New Zealand is reliant on affordable energy to be able to do their bit for the economy. The opportunity for contact is significant. We'll continue to execute strongly and make disciplined choices and keep working hard to earn the trust of the people we serve. I also want to thank the contact team for all the hard work. The progress the company has made and the confidence we have in the future as a direct reflection of that commitment, capability and care. Thank you, Rob. Go well, and thank you to you, our shareholders, for your continued support.

Thank you, Jon. We're now moving to the final part of the business. So general business. This is your opportunity to discuss anything we have not already covered or asked questions of the Board or the management team. Before we open the floor to questions from those present and online, we have 3 questions submitted prior to this meeting. Please can move the first question.

This is a question from Alan and Angela Sanitas. What were the contact shares worth 10 years ago? And what are they worth now in 2026?

Ten years ago today, the contact shares closed at $4.95, close of market yesterday, the $8.51, combined with dividends, the annual -- average annual return over the 10-year period is 12.4%.

The next question is from Patrick Gleason. Why the Contact -- why does Contact only pay $0.08 for solar power returned to the national grid?

The price customers pay for electricity includes generation, which is actually about 45% of the bill, and it's in a shrinking amount transmission, distribution, metering, levies, GST and retail services. Solar buyback rates reflect only the value of electricity exported to the grid. So they aren't directly comparable to retail electricity prices. We consider a range of factors when setting buyback rates, including the value of exported electricity and when that electricity is typically exported. Customers with solar and battery systems can choose our good charge plan, which offers a higher buyback rate for electricity exported during peak demand periods at 7:00 to 9:00 in the morning and 6:00 to 10:00 in the evening and half price overnight battery charging. Our aim is to balance recognizing the value of exported solar power with offering simple practical plans for customers.

This is a question from William and James Campbell. Is Contact Energy contemplating a special dividend payment after huge profits?

We're not contemplating any special dividends and are focused on investing future growth through our strategy to lead New Zealand's renewable energy future contact expects to invest around $650 million in the coming year alone in growth and stay in business CapEx. I will just say that I don't consider contact profits to be huge. They are reflection of the capital employed in this business and the amount of investment that has occurred, particularly in the last 5 years. Okay. That's all the question set in advance. Does anyone present or online have a question?

So further to the online question regarding dividends. How are you balancing keeping the dividend up over time. I know you've got a 60% increase in profit and nearly a 3% increase in dividend over the last year. How are you keeping your shareholders on board with the dividend?

So what we're -- essentially, the policy is very much aimed at a consistent level and we're hopefully growing, and that's certainly what the plan going forward is sort of directionally hitting I think predictability is important as well. We will see an element of profit volatility occur, but I come back to this same point is the company is investing heavily. If you think about the past year and the change in profitability. That was a year when Manawa was fully part of the results as well, and we're able to capture the benefits of both integration but the core earnings of it. of Manila, but we shouldn't lose sight. We also issued a number of shares for that acquisition as well. So you've seen the number of -- or the amount of dividend paid as a total absolute amount increased quite significantly in the past year. Other questions?

If Contact's stop paying dividends by how much would that reduce electricity bills?

So it's an unusual question I might even get the Chief Executive, who's probably got...

I think there's a couple of elements that remembering that electricity bills, the energy component only makes up 45% of the bill. And in terms of the dividend, it is appropriate to ensure an appropriate return to shareholders while continuing to invest in growth. The fundamental thing that will drive down electricity builds are twofold. One is continuing to build at pace, renewable energy projects increasing supply and then sharing the cost of lines and transmission, those fixed assets across a much wider base, which means fundamentally growing the economy. Turning on to our shareholders and saying, well, you should fund consumers. You've got to also remember that Contact Energy in terms of its shareholder book is 70% owned by Kiwis. The sector is probably the best part of 75%, 80%, if you take account of the government shareholding and the other mom companies. And so this is a kiwi enterprise, and we think we've struck the appropriate balance between hard-working kiwi savers, direct Kiwi investors and customers and ensuring that it's fair and equate well for all.