Genesis Energy Limited (GEL) Earnings Call Transcript & Summary

Good afternoon, everyone. I'm Barbara Chapman, Chair of the Board of Genesis Energy. On behalf of my fellow directors, our Chief Executive and the executive team and all Genesis employees around New Zealand, welcome to our 2025 Annual Shareholder Meeting. We continue to hold this meeting in a hybrid form and very much appreciate those shareholders who are able to attempt. As always, our online streaming facility is available for those who couldn't be here in the room today. It's great to host this event in Otautahi Christchurch as part of our plan to move around New Zealand's major centers each year. It's off script, but I'm from Christchurch. I went to down here, so it's great to be back. Before we start, Bathrooms and fire exits are all down the hall. If we hear a fire alarm and a request to evacuate, please follow the hotel staff and user stairs, assembling in the courtyard outside towards the airport terminal. In the event of an earthquake, stay put, drop, cover and hold. For those joining online, today's meeting is held via the Computershare online meetings platform. This enables you to read the company documents associated with the meeting and ask questions through the platform. Online attendees can submit questions during the meeting by selecting the Q&A tab on the right half of your screen at any time. [Operator Instructions] Alternatively, you can call Computershare on 0800-650-034. Please note that while you can submit questions online from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or if we receive multiple questions on 1 topic, amalgamated. Due to time constraints, we may run out of time to answer all your questions. If this happens, we'll answer them in due course via e-mail. For those present in person during question time, simply raise your hand, and 1 of our attendees will bring a microphone to you. As this is streamed online, it is important that you wait for that microphone. Turning now to today's agenda, we will move through the Board highlights from the year, the Chief Executive's overview and the Q&A session, the resolutions and then general business. If there are any discussion points that you feel haven't been covered in today's meeting, please reach out to our Investor Relations team at the e-mail address investor.relations at genesisenergy.co.nz. Four directors require reelection this year under the NZX director rotation rules. They are Catherine Drayton, Warwick Hunt, Hinerangi Raumati-Tu’ua, Tim Miles. We are seeking a fourth term for Tim as we're in the midst of some significant technology projects and Tims has and will continue to be valuable as we bring those to a conclusion over the next 12 to 24 months. We also put forward David Baldwin for election as a director following his appointment by the Board effective from the first of October. You will be able to vote on today's resolutions, either in person or for those online using the Computershare platform. I will refer to the instructions on how to vote when we reach that part of today's meeting. With us today are members of our executive team, including our Chief Corporate Affairs Officer, Matthew Osborne, who will fulfill the role of Secretary for this year's meeting. Silvio Bruinsma is here representing our external auditor, Deloitte. Notice of the meeting has been duly given to shareholders and we have the required quorum. I now declare the 2025 Annual Shareholder Meeting of Genesis Energy Limited officially open. Thank you all for joining us here today. To begin, let me introduce your Board of Directors. You will note that the names of the committees of which they are and member have changed. In June this year, the decision was made to separate the Audit and Risk Committee into 2 discrete committees, an Audit Committee, and the Markets and Risk Committee. The Markets and Risk Committee was established to assume the risk and market trading responsibilities from the Audit and Risk Committee. The role of committees is to enhance the effectiveness of the Board in key areas while still maintaining board accountability. Dividing the Audit and Risk Committee into 2 separate committees did not result in an overall increase in directors' fees. So I'll start with Hinerangi Raumati-Tu’ua. Hinerangi joined the Board in March 2022, She's a member of the Audit Committee. Hinerangi is Chair of Tainui Group Holdings and serves on the boards of a number of entities, including [ Taranaki ] Iwi Holdings Limited and guardians of New Zealand superannuation. She brings extensive governance experience, having chaired on and served on a board and those in various sectors, including water, fisheries, local government, public list in the Reserve Bank of New Zealand. In addition to her strong commercial investment and corporate governance background, Hinerangi was named Maori Business Leader of the Year in 2016 and served on the Callen Tax Working Group in 2019. Last year, she won the Maori leadership in finance award at the Institute of Finance Professionals Awards. Thank you, Hinerangi. Warrick Hunt. Warrick joined the Board in October 2022. He is a member of the Audit Committee and the Markets and Risk Committee. Warwick brings over 30 years leadership and governance experience as a partner and then managing partner of PwC New Zealand, Europe, Middle East, Africa and U.K. Warwick has worked across a range of sectors, including energy, professional services, financial services, agribusiness and aviation. He is Chair of the Bank of New Zealand, a Non-Executive Director of National Australia Bank and an executive fellow of King's Glad London Business School. He's a fellow chartered accountant in Australia and New Zealand and an honorary fellow of King's College London. Warrick is a member of the New Zealand Daughter of Merit for services to business. Thanks, Warwick? Tim Miles. Can I just get this moving a little faster, please? Tim joined our Board in 2016, coming to us from his previous role as Chief Executive of Spark Digital. He is Chairman of the Human Resources and Remuneration Committee and a member of the Nominations Committee. Tim has had a long exceeded career in customer and technology-focused roles both in New Zealand and internationally. He is Chairman of Forty South Limited, Director of ASX-listed company, Media Limited, Tim has served as a director of companies in the fields of technology, finance and property. Thank you, Tim. Catherine Drayton. Catherine joined the Genesis Board in March 2019. She is Chair of the company's Audit Committee and a member of the Markets and Risk Committee. Catherine is a former senior partner at PwC specializing in mergers and acquisitions, culminating leading the assurance and advisory divisions in Central and Eastern Europe. Her extensive cross-sector governance experience includes multiple directorships across EU organizations and the energy, health care and infrastructure sectors. She is a former Chair of Guardians of New Zealand superannuation. She is currently Chair of Mint Innovation Limited and Limited and a Director of IAG New Zealand Limited and Warren & Money Limited. Catherine, a fellow at accountant in the New Zealand and Australia. Thanks, Katherine. James Moulder. James joined the Board in 2018 as Chair of the Markets and Risk Committee and a member of the Audit Committee. James has strong governance experience, having held a number of nonexecutive board and advisory positions in the electricity and carbon industries. He has previously held executive management positions at Mighty River Power, which is now known as Mercury Energy. Prior to joining the Genus Board, James advised the Singaporean government and the development of electricity hedge trading markets. More recently, he's been involved in the development of carbon and environmental markets in Asia. James' background advising the New electricity sector's regulatory bodies also strengthens the depth of our sector experience. Thanks, James. David Bold. I'd like to introduce our new Director, David Baldwin, who joined us on 1 opt -- just need to speed this up, please. David brings more than 35 years of international leadership and governance experience across Asia Pacific, Europe and North America. He has held senior executive and director roles spanning renewables, gas and LNG, utilities, chemicals and infrastructure asset management. His career includes leadership positions with Contact Energy, RME, [ Shellon Berkshire ] Hathaway Energy. Most recently, David was a Senior Managing Director with Macquarie Asset Management, where he advised and served on the Boards of energy infrastructure and private equity portfolio companies. David is currently a Non-Executive Director of energy companies in the Philippines and the United States both in the Macquarie Asset Management portfolio. You'll have the opportunity to meet David later and vote for his election. Thanks, David. I'd like to take this opportunity to acknowledge former Director Paul Zealand, who retired from the Board after 9 years service. Paul was a member of the Human Resources and Remuneration Committee and the Nominations Committee. Paul's input to the direction of Genesis his skills in health and safety and his careful stewardship was invaluable. We thank him for his expertise and dedication to the company and wish him all the best. On the screen now is our Board skills matrix. A summary of the skills we consider necessary for the company's success and an assessment of skills held by directors. The matrix shows a very strong breadth and depth of expertise and secondary skills held by your Board. Succession planning is important. With Paul's departure, we assess the skills we needed in a new director and undertook an external search. As mentioned, David Baldwin is wide experience in renewables, gas and LNG, utilities, chemicals, and infrastructure asset management and has a particular interest in health and safety. His expertise will greatly assist the board in interest need to make in those areas in the years ahead. We're committed to being transparent about our opportunities, targets, strategy and progress and also about our challenges, the impacts we have and how we address those. At our core, Genesis is an electricity generator with strong commercial investments adjacent to and in support of this. We delivered shareholder value through 4 primary areas, our large and loyal customer base, growing our renewable generation supply, monetizing energy security through our substantial flexible generation assets and fuel diversity and our commercial investments. Through our reporting, we set to present a balanced view of how we create value over the short, medium and long term. Our annual reporting suite includes a fully integrated report where our commercial performance is supported by relevant environmental, social and governance metrics. Climate statement, a sustainable finance report. They can be found in the investment center on our website. The Board has a strong and effective working relationship with the company's Chief Executive and the executive team. It's pleasing to see the progress Malcolm and the team have made in the delivery and execution of our Gen35 strategy to deliver earnings growth and sector-leading yields. The business performance in FY '25 and accelerating delivery of key strategic outcomes is a testament to the strength of the executive and the senior leadership teams. Directors' remuneration was reviewed in the FY '25 year as part of the previously committed by cycle. No increase in director fees pull was sought. Rather, directors achieved a modest increase in fees through reallocating the existing call. As this reallocation was within the envelope of the current fees pool, shareholder approval was not required. Directors' remuneration will be reviewed again in FY '27. I'm proud to lead a strong and capable Board of Directors who provide their extensive experience and specialist skills for the benefit of the company, our stakeholders, the wider community and you, our shareholders. During FY '25, the government undertook 2 areas of review. Firstly, [ Palmer's ] Commission in the Electricity Authority undertook a review of market competition. Then Frontier Economics was commissioned to undertake a review of the electricity market. That was peer reviewed and the government announced its response on 1 October. In addition, we received a letter from the Minister of Finance into all gentailers clarifying the government's position on gentailer capital structures. We welcome the clarification delivered with these announcements. Gene35 is very much aligned to the government's objectives and the Board is now looking at ways we can accelerate the delivery of our strategy to further support those objectives. Malcolm will speak more to this soon. FY '25 was a challenging year with 4 very different quarters. Guests declining faster than forecast and other generators being caught short during winter 2024. We're proud that Genesis was able to support all our customers with our own generation across FY '25 and that none of our customers were exposed to the wholesale electricity market prices of winter 2024. This is the advantage of an integrated model in Genesis' flexible generation portfolio. For shareholders, our flexible generation portfolio links directly to earnings resilience as shown in FY '25. We acknowledge that recent price changes have been felt by our customers and we're doing all we can to minimize these. However, around 60% of the FY '25 price rises were driven by increases in regulated power line charges which we passed through on behalf of the power lines companies. Those increases are not increases from Genesis. They are approved by the Commerce Commission every 5 years and all retailers pass them on. There are further lines increases from the lines companies still to come, and these will impact customer price rises over the next few years. Notwithstanding those increases, we believe wholesale electricity prices are now past their peak. The announced pipeline of new generation out to 2030, coupled with increased booming products we've brought to the market will bring downward price pressures to the market. Normalized EBITDA was up 15% to $470 million, and reported net profit after tax was up 29% and to $169 million. This result was driven by improved margin outcomes from our retail business, resulting from the transformation program we are successfully executing. This was further supported by improved trading and operational outcomes of Genesis' generation and fuel flexibility. Normalized EBITDAF is showing pleasing improvement when you look through the technology replatforming projects. But we do expect NPAT will continue to move around, driven by electricity derivative valuations. As a result of our solid EBITDAF and net profit after tax, the Board declared a dividend of $0.143 per share. This provides a return on investment to shareholders while also enabling progress on our capital program to support future growth. Looking ahead, as announced on Tuesday, FY '26 normalized EBITDAF is expected to be between $455 million and $485 million. This remains subject to hydrology conditions, gas availability and price plant reliability and stable market conditions. Our digital investment will peak in FY '26 before returning to stay in business level of around 15 million to 20 million per annum by FY '28. We have 3 critical technology platform upgrades being delivered. Our retail billing system, our financial management system and our electricity trading and risk management system. In addition, we have an increase in forecast carbon costs in FY '26, driven by historic carbon hedges, which are currently above the depressed carbon spot market. We're also budgeting for increased [indiscernible] costs in the second half of FY '26 as existing contracts expire and new contracts reprice accordingly. Safety is a whole of business focus and the Board plays an active role. We are pleased to attain ISO 45001 accreditation during FY '25. Reaching this international standard confirms our commitment to maintaining and improving safety standards for our people. Overall, safety performance improved across the business in FY '25. However, LPG remains a focus for further work. We have a proactive plan in place to keep driving overall performance, which includes our focus around our critical safety risks and on LPG outcomes. After launching our Gen35 strategy in November 2023, we're delivering what we said we would. Gene35 is focused on 3 key things: firstly, optimizing our large customer demand position. Secondly, building renewables to support our 3 hydro generation schemes. And thirdly, monetizing our competitive advantage in flexible generation. Through these 3 key focus areas, we will deliver sector-leading yields while strongly managing our capital. We are in horizon 2 of Gen35, which covers FY '25 to '28. The key deliverables are the 8x8 initiatives and a general uplift in business as usual. Customers remain a critical focus. We want to offer our customers simple but innovative products using efficient operating structures, and keep introducing ways for them to lead their own energy transition. We are delivering our strategy and have growing confidence in providing earnings uplift to upper to mid-$500 million EBITDA by FY '28, subject, of course, to hydrology conditions, no major unplanned outages or any major changes in operating context. We opened our first solar farm at Lauriston here in Canterbury, which is now generating up to 100 gigawatts of electricity a year enough to power around 12,500 households. We expect to reach final investment decision on 2 more solar farms during FY '26. [ Eckim ] in the Bay of Plenty and [ Leston ] in Canterbury and the Foxtons solar farm is currently in the fast track consenting process. We are also well advanced in the construction of our first 200-megawatt hour battery at Huntly Power Station capable of powering about 60,000 average households with 2 hours a day. The battery is expected to be operational by early FY '27. It will cost around $135 million compared to other similar battery systems being quoted as costing up to $180 million. This illustrates the benefits of a strong capital management approach and developing at the established Huntly site. The swift delivery of new generation assets and valuable PPAs that we launched Gen35 is a testament to how we have quickly put in place the capability to procure build and deliver new generation. Gene 35 is focused on putting place the platform for ongoing earnings while retaining strong management of our capital. As I have outlined, we are building new renewable generation and contracting new renewable supply where it is value accretive to shareholders to do so. The capital management approach to delivering new generation is comprised of 3 solutions: One, direct on-balance sheet investment where we will generally prioritize assets that store energy are dispatchable or also provide second order portfolio benefits. The Huntly battery project is an example of that. Secondly, directly leveraging third-party capital where we form joint ventures with third-party capital providers to build new renewable generation and Leeston Solar Farm, which opened in FY '25, as an example of that. And then thirdly, indirectly leveraging third-party capital we write long-term PPAs with third-party generators. Those are power purchase agreements. The start of our Tauhara geothermal power purchase agreement in FY '25 as an example of that. These 3 types of growth capital structure will form the foundation of how we deliver new generation that is value accretive to Genesis shareholders. We have a number of investment opportunities to explore. We're reviewing them carefully, and we'll decide on funding requirements once that part of the job is completed, and we're moving at pace in that regard. As I said before, it's good to have clarity on the government's willingness to participate in potential equity raisings that may be required to support energy security and affordability objectives. We're currently reviewing all our options, including potential additional equity requirements and we'll do what's necessary and appropriate to support the execution of our strategy at the relevant time. We're very aware of the important shareholders place on dividends. And the Board is in continually, reviewing the balance between investing for the future, maintaining sector-leading yields and retaining our BBB+ credit rating over the long term. The Board is also conscious of delivering total shareholder returns overall. The share price growth of around 19% over the past year has been pleasing to see. We expect the delivery of Gen35 to become more evident in our earnings and shareholder returns over the few years. While we meet our emissions reduction target for sold products in FY '25, we've faced several challenges that affected our ability to achieve our target of emissions reduction from generation. Generation emissions were 6% lower than the FY [ '20 ] baseline compared to a target of 36% and as we've said before, our missions will inversely reflect wind and rain conditions in New Zealand, some years to come. We remain committed to net-zero focusing on building new renewables to serve our customers in fuel transition in our thermal generation, including biomass to lower our future emissions outcomes. We will continue to report transparently on progress, challenges and assumptions regarding emissions as the business activates Gen35. This approach ensures stakeholders understanding both the ambition and the practical realities of delivering a low emissions future. Our business relies on the expertise and commitment of our people to attract and retain the best, we need high engagement and alignment in the culture of high performance in trust. So it was pleasing to see many of our employee survey results remain above the national benchmark despite the major structural changes that occurred during FY '25. The survey's overall engagement score was 79%. Of these, 87% have a high level of trust in our leaders and 91% feel safe at work. We thank all our people for their dedication to our customers and the business through what has been a demanding year. Care for our people extends to those in the communities in which we interact Genesis invested $5.6 million in community initiatives during the year, more than doubling the prior year's contribution. This coincided with the launch of our community investment framework aligned with our long-term objectives. Focusing on positive social and environmental outcomes for communities connected to Genesis' generation assets. EV relations are important to us, and this year, we welcomed Gruglitery as or General Manager,. Gogo supports the development and enhancement of relationships with EV around our existing and developing generation sites including exploring opportunities to develop commercial partnerships and our implementation of a strategy to lift the cultural capability of our people, and define our areas of commitment with internal and external stakeholders. In conclusion, along with my fellow directors and our Genesis Energy team, I would like to thank you for your ongoing support of our company. FY '25 has been a challenging year in a dynamic decade for the energy sector, this year's events have underlined our long-held view that a renewable transition must also deliver energy security and reliability. We will continue to engage constructively with regulators to help ensure a workable pathway for new renewable generation while maintaining our focus on security of electricity supply and affordability for our customers. I have every confidence that your Board, overseeing our strong executive team will maintain the company's position as an essential and profitable part of New Zealand's energy future, while at the same time, living up to the company's purpose and vision. Finally, I do want to acknowledge the awards that Genesis has been recognized for in the past year across our wholesale and retail segments. This included being named Energy Retailer of the Year at the Energy Excellence Awards. This is a credit to the whole team and the valuable contribution they make to our customers in the sector. It's now my pleasure to invite your Chief Executive, Malcolm Johns, to address our shareholders. Welcome. Malcolm.

Good day to everybody. [Foreign Language]. From whenever you are listening around the country or offshore, a warm welcome, and thank you very much, Barbara. It's a pleasure to speak to you today and review both our FY '25 performance, what we have delivered to date and what we will deliver over the next few years through our strategy, Gen35. Let me first start by introducing our executive leadership team. Tracey Hickman is our longest-serving executive leader, having been with Genesis since it was first formed. Tracey leads our operations, asset development, fuels, environmental, sustainability and EV immunity relationships functions. Matthew Osborn has been with Genesis for over 5 years. and leads our legal, government relations, procurement and communication teams. Ed Hyde joined Genesis in 2023 and leads our strategy, technology and transformation teams. Julie Amey joined us in November last year as our Chief Financial Officer and leads our finance team, including reporting, risk management, performance and capital market actions. Stephen England-Hall joined us in 2023 and leads our commercial business units, including the customer trading and portfolio teams. [ Clear Walker ] joined us in 2023 and and lead our people and culture areas, which include culture, safety, wellness and our talent development units. This team has largely been in place since we launched Gen35 and I'm proud of what we have delivered over the last 2 years. Genesis is a transition within the energy transition. Since we launched Gen35 in November 2023, both transitions have gathered pace. Delivery has and will remain at the center of this team's focus. Core to Genesis' portfolio is our large customer position of around 520,000 customers spread across the whole of New Zealand. Our 3 hydro schemes producing around 2.8 terawatt hours of electricity on average each year, and our very large flexible generation and fuels portfolio to our all national hydro cycles. These Folio drove FY '25 solid EBITDAF performance of $470 million in what has been a very challenging year for the sector. This was an excellent result, and I'm proud of how our team navigated the business through all 4 quarters of FY '25. We are delivering our strategy and seeing commercial uplift in all areas of the business. Operations free cash flow was $147 million. This, coupled with our accumulated cash reserves were used to fund our growth investments of $165 million and to finance our dividend distribution of $116 million. No new debt was needed, moving our EBITDAF to debt ratio down slightly from 2.8x to 2.7x remaining within the 2 to 3x range targeted for our BBB+ credit rating. Genesis' competitive advantage is the flexibility in our generation assets and fuels with our 3 hydro schemes and Huntly power station at the core of this. Our flexibility allows us to generate when the wholesale electricity market is high, actually providing if we can that generation down when the market is priced as we have been doing during FY '26 [indiscernible] Our teams are mastering this flexibility and how to turn this competitive into for our shareholders through market packet [indiscernible], the need a flexible generation. And that has meant previously we weren't getting paid for being [indiscernible both the contract for our gene to be on firming options for fixed annual CFO holder. This means Genesis gets paid [indiscernible] and regarding whether the market generation, HFO directly or in working capital. Yes, [indiscernible]. We'll see a of 600,000 [Technical Difficulty]. If you look at the graph on the screen, you can see our customer demand on the left-hand [indiscernible] in the middle. You can see the market didn't need all the generation we had to offer, so we didn't get paid for having this on standby for the system. The FY '28 column shows the impact of the 2- and 10-year HFO I have just mentioned, we will get paid to have this generation [indiscernible] when conditions we can offer the market more short, medium and long dated electricity security products, which we intend to do. This will offer generators, retailers and industrials, a choice of products to add price stability to their future electricity demand and avoid the consequences of winter 2024. And System security needs to be funded fairly by all market participants. This hasn't been the case in the past, and the system got called out in winter 2024. We welcome the government's recent announcements that it wishes to put in place a more structured and monitored regime for market participants security. Full and reserves are the key elements of having Huntly power station on standby for the country and for energy security. Optimizing working capital deployed for fuel reserves is critical to Genesis. And during FY '25, we have built a formidable fuels team to drive this commercial uplift. The team has already introduced new coal management systems and contracts and enhanced our domestic supply of coal from new contracts with BT Mining for around 120,000 tonnes per annum. We are also well into work on diversifying our international supply options from mines outside of Indonesia, and we'll be trialing an option from Australia in 2026. We are also currently exploring multiple options from other countries in addition to this. However, these are in the early stages of engagement. Our team has introduced more dynamic management of our gas vision with increased flexibility through FY '25 being a major contributor to our EBITDAF resilience. They are stepping up to another level in FY '26. While hydro at our battery are well suited to supporting firming of the system across minutes, hours, coal is well suited to firming across weeks and months. However, New Zealand is not well served across days and weeks. Gas has traditionally played this role, but it is declining faster and is more expensive than forecast. There are now increasing uncertainties on both the supply and the demand side for gas over the coming years. Methanex and Genesis, our 400-megawatt turbine, Unit 5 at Huntly Power Station are the 2 largest gas users in New Zealand and have served to underpin the upstream sector for some decades. Gas decline for other customers has essentially been cushioned first by Methanex until it reached its minimum operating levels last year and now by Unit 5 at Huntly. Unit 5 can produce up to 3.5 terawatt hours of electricity a year. That's about 8% of New Zealand's current electricity demand. However, in FY '25, terawatt hours of electricity or 55% of its total capacity. And that is because gas was prioritized to Genesis' gas customers over our own generation. We expect the output from Unit 5 to fall further in FY '26 as industrial companies outbid electricity generators for gas supply, and we use coal when it is a cheaper fuel. The team is mastering how to use Unit 5 on a more seasonal basis and less of a year-round generation baseload basis. Unit 5 will be fully depreciated by 2032, and and offers the country substantial intraday and intra-season generation options for energy security, but that is subject to fuel availability, flexibility and pricing. We are following the government's recent announcements on LNG and retain our contract option on gas storage at the reservoir in Taranaki. Overall, Genesis used around 25 PJs of gas in FY '25. About 30% of this went to our customers across both homes and businesses. The remaining 66% went to electricity generation, which is currently acting as the buffer between a declining gas market and our customers' stable demand for gas. The market is now allocating gas to the highest and best use, and we are now seeing regular examples of industrial companies outbidding electricity generators for that gas. We expect to see the customer share of our gas allocation increase into the future as this trend continues. As this graph shows, Genesis' ability to pivot between gas and coal is a major advantage currently. Our teams are managing this with increasing dexterity, and this is evident in our improving margin resilience. Kupe production remains broadly in line with forecast, and the joint venture has a capital plan to address the future changes as the field declines. Our position on Kupe remains the same as it was last year. We need the gas supply, but we do not need to own the asset. However, there are no current live engagements around exiting our 46% holding in the asset. As Barbara mentioned, a key aspect of delivering Gen35 is building new renewable generation. We now have a solid pipeline over the next few years, as you can see on the screen. We will deliver this through the 3 capital management structures Barbara has outlined earlier. However, our learnings from the Lauriston Solar Farm have seen a small change in how we will directly leverage third-party capital. Going forward, we will now develop and hold our own pipeline of future development options ourselves. We will build these options on our balance sheet and hold them until we decide it makes commercial sense to recycle the capital into the next development to grow earnings. This means we will begin recycling capital off the back of new developments rather than at the front as we did with Lauriston. This provides Genesis with more direct control over development optionality, time lines for development, capital management and cash flow benefit. We want to capture development margins and the government's 20% investment boost tax credit for our shareholders directly. It is this change of approach, which underpinned our mutual agreement with FR to move in different directions going forward and to end our joint venture. We are on target to deliver options to build to 500 megawatts of solar generation, primarily to increase the value of our water and displace baseload gas generation in our portfolio. However, we do see some risk of solar being overbuilt. So we intend to maintain some flexibility in this objective. We are putting in place wind options and we will continue to do so. Stage 1 of our grid scale battery project at Huntly is underway, and we are well into reviewing Stage 2. The balance of plant we purchased for Stage 1 was purchased to a level so it could accommodate Stage 2. So we are well placed to deliver a Stage 2 battery at the most market competitive CapEx available. As many of you will have read, we are now extending the life of the ranking units at Huntly out to 2035. Key to this investment are the 10-year Huntly firming options we have agreed with Contact Mercury and Meridian. These are calculated based on a full thermal appropriate return on and return of capital over the contract period. Ranking Unit 2 was scheduled to go into retirement in February 2026. And we were well advanced with planning for this to occur when the interest arose to keep this unit in the market until 2035. Subject to the Commerce Commission's final decision on the 10-year HFO, we will now spend around $70 million over the next 2 years to extend the life of the rankings out to 2035. As Barbara outlined, we are delivering 3 new performance-enhancing technology platforms, our retail billing and customer management system, our financial management system and our electricity trading and risk management systems. These are big technology projects equal to a heart and lung transplant for the business. They are never easy projects. However, our teams are doing an excellent delivery job. Technology provides the opportunity to step-change productivity within the business, facilitating an uplift in our drive for a performance-based culture. In 2023, we set ourselves the ambitious objective of delivering these 3 technology projects with an overall envelope of $145 million. made up of around $18 million of capital investment at around $127 million of operating costs. We remain within the overall envelope and on time for overall delivery. However, as the table on screen shows, the phasing of the spend has evolved as we deliver the different phases of the technology projects and we expect this phasing to continue to evolve over FY '26 and '27 within the overall envelope. However, we do not expect any material changes in phasing at this time. We will update any phasing changes in our normal ruling cycles. Once these large technology projects have moved through the system, we expect our technology spend to return to more stay-in business levels of around $15 million to $20 million a year in today's dollars. We believe AI can help unlock further productivity gains in all areas of our business, not just technology, this year, we continue to upskill our people in how to use AI effectively and continue applying it for use in generating finance, retail, leadership development and customer service. We have governance in place to ensure consistency as we deploy AI across the business. Moving now to retail. Genesis has built a strong customer demand position in what is a very competitive retail market. Our transformation process of retail is well underway to deliver our customers the services and products they need to help drive New Zealand's energy transition. We have seen pleasing improvements in our netback performance and very pleasing improvements in our productivity with a 22% growth in netback per full-time employee over FY '25. As we have signaled, we are moving to a single brand strategy as part of that retail transformation. During FY '25, we completed the purchase of the remaining 30% of Ecotricity to take full ownership. We are also well into merging the Frank brand into Genesis. Overall, we see our customer demand position within the band of 6 to 6.5 terawatt hours per annum today. Growing to between 7.5 and 8.3 terawatt hours per annum by 2035. One of our highest value channels to market is through EV customers or electric vehicle customers. As we highlighted when we launched Gen35 in 2023. Genesis has a market-leading position regarding high-value EV customers. And during FY '25, we took a majority position in New Zealand's largest and fastest-growing rapid charging network, charge net. We will have more to say about this at our Investor Day in November later this year. Genesis is proud to be New Zealand's largest distributed energy retailer with around 27,000 household customers with rooftop solar. Some 14,000 of these also now have household batteries. Combined, these households have a peak generation of around 189 megawatts. In current total battery average capacity of around 68 megawatts. In January this year, a record 5% of our electricity generation duration was purchased from household customers -- we expect this to grow as we are currently acquiring around 250 household solar customers a month with a much higher percentage of battery. Our team is well placed and leaning into flexibility to deliver our shareholders, this is a key aspect of why we are upgrading our technology platforms. Our relationship with our customers is changing and we are changing as a retailer too. The Salesforce Gentrack customer billing platform upgrade will undertake its first [indiscernible] testing is showing pleasing productivity advances from the customer resource management section of the software used by our call center and customer care teams. The utility technology space has become very competitive. Optionality has grown considerably in New Zealand over recent years and mature systems are advancing fast to support new services and products for our customers' energy transition. Ecotricity has developed an impressive technology from software from Europe tailored to the New Zealand market. Now that we have this platform available to us, we are reviewing the opportunities to deliver technology benefits faster to our customers and to our business. I would like to acknowledge some changes in our safety ship this year. Clear Walker has become our executive safety lead bringing people, culture and safety into the same leadership team. Our long-serving General Manager of Safety and Wellness, Jared Bohler, retired during FY '25 and we would like to acknowledge Jared's extensive service and passion for all things safety inside Genesis. Will East Gate joined us as a safety wellness. Will has a successful career in safety with excellent skills, culture, safety and safety systems. As I mentioned, we have maintained fine within the embarked on largest change programs ever. We made some changes in executive level to better support our people in the strategy [indiscernible] and making the most of the opportunities that during ever [indiscernible] lent impactful change for our customers and our shareholders. We strengthened our event delivery culture into [Technical Difficulty] Gen35 and doing it in a dynamic time in the electricity sector. In terms of transformation activity, we will peak in FY '26. And and begin moving towards Genesis 2.0 FY '27 and '28. [indiscernible] The government announcements do come with processes that will play out over several months. And as play out, we will gain greater clarity on the benefits that might arise for Genesis. We will update investors in our strategy delivery at our planned Investor Days on 26 and 27 November this year. We will live stream the key parts of the first day and will be in touch soon with details on how you can join that broadcast. Right now, we have an awesome team doing some cool stuff I am incredibly proud of them and what they are delivering for our customers and for our shareholders. Thank you to the Board for their support, wisdom and guidance as we build our team to deliver Gen35. Most of all, thank you for your support as we build an electricity company where energy never stops. I will give it back to Barb.

There's some 3 steps leave to go in this meeting just to keep you on track. The first is we -- you have an opportunity now if you would like to ask questions on the presentations that you've heard from myself and Malcolm. The second is the formal resolutions that we vote on, the team that are up for reelection this year. We get the chance to vote on that. And then there's a more general Q&A the session that we can have after the formal resolutions. So in relation to that first step questions on -- from the floor are now open. If you'd like to indicate by raising your hand, we will bring a microphone to you. So please remember that this meeting is being webcast, so it's important to speak into the microphone, and we'll then take questions from our online shareholders. So other questions from the floor on the presentations that you've heard? Keep rolling along. Have the online questions, Matthew?

Online questions actually, rolling through those? The first question we have from the New Zealand Shareholders Association. We note that under the Public Finance Act of 2001 at the Auditor General appointed the auditor and assure as the lead audit partner is rotated every 5 years. There's no disclosure of the date the leader with a partner an audit firm was appointed nor the policy on audit firm rotation in light of events overseas and recently with our New Zealand, the NZSA believes it is important that companies had a clear audit firm rotation policy and a process to regularly test the market as regards to audit fees. Can you please comment?

Look, I'd just like to comment that, of course, the New Zealand Shareholders' Association and others know that the audit company is appointed by -- not by us, but by Crown entity. And so we are very comfortable with that. In terms of specificity around time frames and things, I'm quite happy to include that in disclosures going forward. And this that causes Deloitte any concerns or...

The company does not participate in the IOD's future director program designed to and into the next generation of directors. The MSA expects NZX 50 companies to participate as part of a responsibility to develop and mentor the next generation of directors. Can you please comment on this? Thank you very much again.

That concern is noted. There's not every company in New Zealand appoints a future director. I think the balance of skills and the complexity we have with our business and the people we have around the table is an excellent combination. At a certain point in time, we -- I wouldn't rule it out. We might engage a future director, but it's not been on our horizon for the moment.

And the final question from NZSA. Whilst the annual report includes a skills matrix, it does not attribute still sets to individual directors to demonstrate how they individually contribute to the governance of the company and add value. Are you in a position to attribute skill sets individually in the future?

The Shareholders Association has sent me an example of what they believe is best practice around the skills matrix that was received after this year's skills matrix went into print. And so that's something that we can consider for next year.

Next question is from a shareholder, Gordon. What is the biggest cost saving for year 2026? Interested to hear comments from Board of Directors.

Malcolm, I might pass it to you.

We have an ongoing productivity program within Genesis and so I would describe cost savings and Genesis as a bubble bath approach rather than a big bang approach. So there's no part of the business that is not undertaking some form of cost optimization at the moment. official intelligence and the productivity gains that, that offers does represent our largest cost saving over the next 2 or 3 years. And you'll see that start to become more prominent in our reporting probably from FY '26 onwards. And evidence of that is if you look at the salary line for Genesis this year, we absorbed inflation inside that line, and we would expect to continue to improve our performance on that. That's the first year that we've been able to achieve that absorption. So the 22% productivity that I mentioned in my speech is indicative of the work that is going on to try and hold our OpEx line flat. And so if you look at our reporting, you'll see that we're reporting on core business, and we're reporting on projects. So we do have a large OpEx for the technology projects that are in play at the moment. we would expect to return to more normal business as usual levels in the years to come, but we are separating out what's happening at a core level versus a project level.

Next question is also from Gordon. What is the Board business doing about acquiring new customers that are shareholders, but not yet customers of Genesis. Does Genesis plan on offering some form of incentive for shareholders who are not customers to become Genesis customers.

The answer to that is no, we don't have that on our horizon. I think the customers that we -- the team are very careful to make sure that we get the right customers into the company, customers who can actually support the company add value in the long term, but we don't have that kind of scheme in play, and it's not in the pipeline.

Next question is from Oliver and Hildegard Colman. Genesis owns Ecotricity, the only carbon positive certified electricity retailer in. What are your plans for Ecotricity with regards to consolidating your retail brands?

You will have read that we are consolidating our retail brands. For example, the Frank brand is being taken out of the market, and there's work going on in and around snergies for Ecotricity, -- that was a very good acquisition for the company. We're very pleased with how that is going, and we'll just keep moving forward with how we manage these brands together.

Next question is from Warwick Gold. Why the sudden drop in gas price between August and October 2024.

Not in my memory horizon, Malcolm.

As I mentioned in my presentation, the gas market is effectively out of balance. There's too much demand for the supply of gas in New Zealand. So very small movements, particularly on the demand side, can create very big movements in the price of gas in New Zealand at the moment. And so you've only got to get someone close a dairy factory somewhere in New Zealand and put that gas back into the market, you'll get a very big reaction from the market on that. and we could expect that volatility in the gas market to probably persist for the foreseeable future.

Next question is from Stephen Mayne relates to Tim Miles election. He notes that Tim sits on the board of ASX listed Media, and that our remuneration report is typically presented and voted on Australian AGMs where Genesis considered doing similar and prepare an annual remuneration report similar to what the likes of Xero and Fitch building currently do. Could Barbara, please comment on this.

It's not on our horizon, Stephen. Okay. Just in the interest of time, Matthew, are there any more online questions?

There's 2 more both from Stephen Maine. Okay. Most New Zealand-domiciled dualist companies presented a resolution at their ASM approving the audit fees. Why was this resolution not presented on the ballot today or at last year's AGM. Does it have any impact on the auditing process, pricing or tender regularity?

I'm very comfortable, Stephen, with where we are in terms of our audit fees. I think they are fair and reasonable to the company, and that is the test that my fellow directors and I will use when we consider audit fees.

And the third and final question from Stephen Maine. It's a long one. What does the government's announcement about the potential sale of its shares in Kupes mean for Genesis. As an Australian-based shareholder, I'm not across the NZ privatization debate. So could the Chair please explain the history of the government's 51% stake in Genesis.

I think that, that quite -- would be quite a long answer, Stephen. So I think that's something -- could I ask the Investor Relations team, please to take off-line and give Stephen a hand in just understanding how this place is set up.

Happy to do that. That's the end of the online questions.

Okay. Now let's move to the formal part of the meeting. We have resolutions on which to vote. For those present, if you do not have a pen or a voting paper and would like one, please raise your hand and a Computershare representative will come and hand you one. For those of you online, you may cast your votes through the Computershare platform under the boat tab. Once voting has opened, the resolutions will allow votes to be submitted. To vote, simply select your voting direction from the options shown on the screen. You can vote for all the resolutions at once or by each resolution. Your vote has been cast when the tick appears. To change your vote, simply select change your vote. You may change your vote any time until I declare that voting has closed. You'll be able to raise questions before I formally put each resolution forward for voting. For those present in person, again, please raise your hand and we'll bring a microphone to you. So Resolution 1 proposes that Catherine Drayton be reelected as a Director of the company. The Board has confirmed that Catherine is standing as an independent director. The Board recommends Catherine to you as a Director of Genesis Energy Limited and unanimously supports her reelection. I now invite Catherine to address the meeting.

[Foreign Language] I'm Catherine Drayton and thank you for the opportunity to stand for reelection. So whilst I've been on the Board for 6.5 years, I believe I still have a contribution to make monitoring the prosecution of the Gen35 aspirations. Emphasizing the importance of insightful stakeholder engagement; and finally, constructively challenging management team on critical business cases, the opportunities the risks in the counter. So I ask for your continued confidence as I seek reappointment.

Thank you, Katherine. Is there any discussion on this resolution? Okay. There appears to be no further discussion. I now put to the vote the ordinary resolution that Catherine Drayton be reelected as a Director of the company. Can the auto queue keep up with me, please. We'll give you a moment to mark your voting form or vote via the Computershare portal in relation to Catherine's reelection. [Voting]

Thanks. Resolution 2 proposes that Warwick Hunt be reelected as a Director of the company. The Board has confirmed that Warwick is standing as an independent director. The Board recommends Warwick to you as a director of Genesis Energy Limited and unanimously supports his reelection. I now invite Warwick to address the meeting.

[Foreign Language] I am Warrick Hunt and delighted to seek reelection as a Director of Genesis. In doing that and recognizing that I've been on the Board for the last 3 years, I thought it only fair to give you some brief views that I formed over that 3-year period. First comment would be the extremely challenging conditions that the company has actually worked its way through. I'd have to observe that as a Board, we have seen our management team handle that in a very short fitted manner while producing reasonable returns, and while at the same time, conceiving and then beginning to implement the Gene35 strategy, and as you heard, we are now well down the track in doing that. I've observed our Board operating effectively, strong teamwork, strong focus on oversight of our management team and ultimately, a very diverse set of skills that's being brought to play. So having said that, I'm absolutely delighted to offer myself for reelection to the Board. One matter that I would draw to your attention relative to my own CV is that over that 3-year period, I've accepted appointment as Chair of Bank of New Zealand and to the Board of National Australia Bank. That gives me very good insights into both the New Zealand and Australian economies. But it means that if you do see fit to reelect me, I will simply have the 3 appointments and I have sufficient time to devote to the business of each 1 of those entities. So I'm excited at the prospect of reelection, and I hope to leverage the experience over the past 3 years. Thank you very much.

Thanks, Warrick. Is there any discussion or questions in relation to Warwick's reelection? There appears to be no further discussion. I now put to the vote the ordinary resolution that Warwick Hunt be reelected as a Director of the company. And I'll give you a moment to mark your vote form or vote online. [Voting]

I'd like to propose resolution #3 that Hinerangi Raumati-Tu’ua be reelected as a Director of the company. The Board has confirmed that Hinerangi is standing as an independent director. The Board recommends Hinerangi to you as a Director of Genesis Energy Limit and unanimously supports her reelection. I now invite Hinerangi to say some words.

[Foreign Language] Greeting to you all. My name is Hinerangi, I have served on the Board of Genesis now for 3 years. It has been both a challenging and dynamic period of time. It's been really pleasing to see how well we have been led by our Chair and to welcome our CEO, Malcolm on during that period. My reflections on this time have been that is that we are well sued by the Board that we have, and we are well served by the management team that we have. It has been a real pleasure to work beside an incredibly talented team. I bring to the Board over 20 years of governance and executive experience across a wide range of sectors and entities. Predominantly, my experience has been in the Maori and Iwi commercial post-settlement economy having contributed both the growth in long-term sustainability of this sector over many years. That experience is invaluable in terms of the contribution that I make to Genesis. I've also dedicated my time in my great to thinking about place of Maori ways of thinking and knowledge in the management and governance of commercial entities in order to create shareholder value for the long term. It's a privilege to serve on the Board of Genesis Energy and to advance the strategy of the company, and I look forward to your continued support.

Thank you, Hinerangi. Is there any discussion on this resolution? There appears to be no further discussion. I now put to the vote the ordinary resolution that Hinerangi be reelected as a Director of the company. And again, I'll give you a moment to mark your vote and form or vote via the portal. [Voting]

Resolution 4 proposes that Tim Miles be reelected as a Director of the company. The Board has confirmed that Tim is standings an independent director. The Board recommends Tim to you as a director of Genesis Energy Limited and unanimously supports his reelection. I'd now invite Tim to address the meeting. Thank you, Barbara.

Fellow shareholders, it's been my privilege to represent shareholders over the past 9 years. As a director, as Chair of the HR and Remuneration Committee and as a member of the Nominations Committee. I enjoy working with my colleagues and the members of the Genesis team. As you've heard, your company has significant aspiration in its goals, delivering for both a better ASTRO New Zealand and to deliver the pillars that will underpin enhanced financial performance. As you've also heard much progress has been made, but we are far from the end of this journey. My background is in digital technology and customer-focused organization, and this leads me to have a special interest in these areas at Genesis. The Genesis team have a number of key technology projects in train and the successful delivery of these are crucial to the support of our strategy and ongoing future shareholder returns. I would be very grateful for your support and continuing this work on your behalf here.

Thanks very much, Tim. Is there any discussion on the reelection of Tim. There appears to be no further discussion. I now put to the vote -- the ordinary resolution that Tim Miles be reelected as a Director of the company. And again, we'll give you a moment to mark your voting form or vote online. [Voting]

Resolution 5 proposes that David Baldwin, who is able for election belted as a Director of the company. The Board has confirmed that David is standing as an independent director. The Board recommends David to you as a director of Genesis Energy Limited and unanimously supports his election. David.

[Foreign Language] It's a privilege to be a member of your Board. Thank you for considering my election last; 30-plus years I've had the opportunity of working around the world in different organizations, including here in New Zealand. I was the CEO of Contact Energy for 5 years. And after that, I was the CEO of integrated gas business of Origin Energy in Australia were which included the construction and operations of the very large equified natural gas project in Queensland. Among other things, including operating onshore and offshore gas fields, including the Kupe gas field that now Genesis is a partner in. Prior to that, I was an engineer and an executive with Shell and Berkshire net in different parts of the world. And they've had a wonderful opportunity to see how things operate in that respect and bring all of that international experience into Genesis. Most recently, I've been a Senior Managing Director with Macquarie Asset Management based in Singapore up until 2 months ago when I retired from Macquarie. I still serve as a director on 2 Macquarie portfolio companies, both renewable energy. And again, that brings the opportunity of importing and sharing that experience with how renewables are built out across Asia and in the United States into Genesis. I've had other nonexecutive roles across the region from Korea to Indonesia to the Philippines and Australia as well, including energy utilities, electricity distribution, hydrogen and so on. So 1 thing that I'm particularly pleased about to bring to generate a culture that supports good performance in health and safety. That's been largely due to the fact that I've been responsible for leading the construction and operations of complex projects LNG rocks, oil and gas, generation, electricity distribution and so on. So that aspect of my career so far has been very important to me. There was a time I was a Global Head of Safety for Macquarie Asset Management, leading safety globally across the 180 portfolio companies that Macquarie vested in around the world. And so all of that with your support, I'd be very happy to stand for election and with your support to contribute to the Genesis Board. Thank you.

Thank you very much, David. Are there any questions or comments on the resolution?

We have 1 online question from [indiscernible]. Could David or the Chair please comment on the recruitment process that led to David's appointment to the Board. What role did the shareholding ministers play in that process? And did they vote in favor of the resolutions put forward to the meeting today.

I said in my speech that we used an external firm to get to arrive at David. It was a very thorough process. We were given quite a few opportunities to talk to other people. And we had a very clear matrix of the kind of candidate that we wanted on the Board, as I said, Paul Zealand had retired from the Board and Paul bought specific engineering and health and safety qualifications to the Board. And so we were largely looking at how do we replicate and enhance on that. So we went through a very thorough process, looking onshore and offshore for the right people and we landed on David, and I'm very pleased we did. I'm not going to comment on the Crown's position. I will say that the Crown does not nominate people for these boards. So that's left to us. We are a commercial entity. And so we do this ourselves. And I'm not going to comment on whether the Crown has otherwise supported. You will see that when the votes come through as we as we show you the voting from today's session. I think that's the best way to do it rather than show in advance. Any other questions? Okay. I now put to the -- Oh, I'm sorry, sorry, I missed you. I will just wait for mic so that the online people can hear.

Thank you. David, do you appear to have been on many boards and companies around the world. Have you any idea of how long you would like or maybe stay with Genesis?

As long as you'll have me -- it's -- so I'm on the 3 boards, including Genesis. So I do have the time and capacity. And it's important for me that, that is I have the ability to give all of myself to a governance role as important as Genesis and any other good governance role would be. But no, I'm thoroughly committed. I've moved back to New Zealand. I'm delighted to be living here again and established and thrilled to be part of your company.

Are there any other questions around David's appointment election?

Two more of just come through online if you want to David, how do you deal with resistance to change in culture. That's a question from [ Eva Quitting ].

How do you deal with resistance to change in in culture.

Well, so I've worked in many countries. I've lived in 8 countries for lengthy periods of time, most of which is across Asia. Indonesia, Philippines, Hong Kong and worked in all the countries in Asia, invested and being on the boards of companies in China, Philippines all over the place. So 1 of the things I think New Zealanders that I found myself and other New Zealand is, is that we're quite adaptable. And we accommodate the differences that exist across cultures and Asia as a vastly diverse set of cultures and and make that work really well. And so I love difference. I run toward it, explore it, understand -- try to understand it as best as I could and work within that environment to make all the stakeholders part of that context, whether it's a business or a community successful.

There's 1 more question.

No, there is a general business, I'll say them all.

Thanks very much. So I now put that David Boldwin be elected as a Director of the company. And again, I'll give you a moment to mark on voting papers or submit online. [Voting]

So ladies and gentlemen, that concludes our discussion on the items of business. In a minute, I will close the voting system. Please ensure that you have cast your vote on all resolutions and pause for 20 seconds to allow you time to finalize those votes. I hope no one's been timing me. I think that was about 20 seconds. So the voting is now closed. This slide, which is for your information, is a summary of the proxies received by the company before voting closed. Thank you all for casting your votes. Your votes will now be collected by Computershare and the results of the voting will be announced to the market as soon as they are available. So there's -- so our colleagues from computers here are walking around with a box. If you could put your voting forms in those boxes, please. Thank you very much. Thank you. Shareholders now have an opportunity to raise any items of general business that may lawfully be put to the meeting. Those online may use the Computershare site to do this, select the Q&A at the item you wish to raise into the box and at the of the screen press submit. For those present, please raise your hands and a microphone will come around to you. I'll start in the room. Are there any general questions from shareholders here today. Okay. Matthew, any online, please?

Yes, it's 1 online question. Eve Quitting is asking, does the company plan to lay off any staff in which -- in department of the company and the name of cost saving.

You will have noted from -- as we went through last year, there was quite a bit of restructuring that went on in our retail division. And I have to say, all our staff across the company all our leaders handle that incredibly well. That did lead to a reduction in FTE in some parts of the business. So some in retail, some in tech. We have no plans for large-scale layoffs. We -- obviously, like any company, we look at our workforce all the time and apply our resources to the right place at the right time. We've got very talented people. We've got very good ways of being able to train people internally and redeploy them into other places. So we have no big large-scale retrenchment sitting on the horizon. We just manage -- we manage our workforce and our efficiency and effectiveness on a day-to-day basis every day. And I think the team are doing an excellent job in that. Any other questions, Matthew?

There's 1 further question from [ Stephen Mayne ] regarding the proxy votes, he just asked how did the government vote their controlling stake? Do they voted by proxy or are they in the poll today.

Matt. I think from memory, they handed the proxies to me as Chair.

It was voted by proxy.

Yes. So I get to vote the government, the crowns. So these people are in my hands at the moment. They don't not very terrified, do they. Any other questions?

Just to comment here from shareholder, Gordon Leotthank you, David, for bringing experience and fresh ideas moving Genesis forward into the future and beyond.

Question in the room?

Yes, Andrew Hart. Just asking a very way out question. I've heard all the question -- the comments about the Huntly firming options and stuff like that. . Do you ever see any option of shutting down Huntly putting in the nuclear power station in this place?

I remember when [ Jenny Shipley ] was the Chair of Genesis Energy and her parting speech [ Genie seed, ] look, she really felt that nuclear should be an option for New Zealand. Look, I think we are a long way away as a nation from even considering something like that. So like, I don't know, you never ever say never, but this country stands on nuclear positioning would not suggest that, that would be possible. Malcolm, do you want to add anything?

No.

Thank you for the question. There's another question down the back and 1 over here on the side. We'll start down the back.

Good afternoon, and thanks for bringing the meeting to. I just wondered, could you tell me what's the most cost efficient and profitable form of electricity generation? .

Hydro water. Rain is free fuel as we like to describe it.

On that note then, the 3 hydro stations that Genesis have appear relatively old. How would you rate them in a seismic large earthquake.

We've spent quite a bit of time and money at Tekapo, which is the 1 that would be most prone earthquakes given where it's located. And I think maybe Tracy help me 3 years ago, 4 years ago, we put in a big -- what I technically known as a plug. We put in a big plug, so that it was an earthquake that stops the water from going down through our system into the lakes beyond. And so that effectively cushions the impact of an earthquake in that valley that the water goes down. So we're very conscious of this. We get involved in thinking about seismic care around dams on all the dams around the hydro sites. It is not a set and forget process. So we are always mindful of those kinds of risk and the management team bring those risks to the Board.

On that note, then, with hydro is there any prospect of further hydro development? .

Look, I think at a very large scale, it seems unlikely at the moment. There will be micro tweaks that make these systems more efficient as we go through in time. And we do that now. There's different ways that the team can manage to get these schemes running more efficiently and generating more power along the way. So I think it's more going to be how do we keep on tweaking the system to make Hydro way more efficient and way more usable as we build out other renewables and then continue with the role of Huntley in firming and battery and those kinds of things. There was a question over here. We just grab a microphone for you. Malcolm jump on 1 time.

Malcolm, you mentioned in your presentation that most -- all of the coal that is coming -- will be used in Huntly will be sourced from overseas. Is there any movement towards sourcing that coal locally so that the dollars and employment, et cetera, could be retained in New Zealand.

So we just executed a deal with BT Mining to purchase 120,000 tonnes a year of New Zealand supplied coal. Up until this point, New Zealand has only been able to supply about 10,000 tonnes a year in the specifications that we need. The team has worked really hard to -- on those specifications to try and expand our opportunity domestically. The reality is that Huntly was built for a very specific type of coal that was found in abundance just behind the current site. And that's largely been exhausted in terms of easy to access coal. And we have 2 mines in Indonesia at the moment that fit that specification. And what happens when you move out of specification as you end up having to burn a whole lot more coal for the same amount of energy. And so it's a price price curve that you sit inside as well as a chemical co inside the coal. But rest assured that -- so for example, the West Coast coal here in the South Island is better suited to steelmaking then to producing electricity in Huntly. But rest assured that we purchase all the coal from New Zealand that we can.

There's another question down the back here, David.

You've commented on nuclear futures. Could you comment on waste-to-energy plants, which are common overseas.

Yes. Very successful overseas. In fact, I've visited 1 in Denmark not too long ago. And these things are remarkable the way they use energy. I think the success in countries in Europe is the reticulation of the heat that can be can be used, and that's not something that we have in New Zealand. I think there is a bit of waste energy going on. For example, Fletchers are burning a lot of tires, old car tires to keep their Golden Bay Furness hot. So there's pieces like that going on around the country. But in this Malcolm knows more than me, there's no plan for any large-scale Denmark like facility here in New Zealand. There doesn't seem -- there's not the reticulation system to start with, but also there's actually to make these things work, you need a lot of waste. And the studies that have been done would suggest, we just don't have it at that scale here. Look, technology changes, as you know, and that may change in the future. But right now, it's just not a viable thing, even though it's very attractive.

The more likely pathway is through a torrefied process where you take the waste and actually turn it into gas that you can use in gas turbines, but that is relatively expensive relative to other fuels that are available at the moment. How it as Barbara said, as that technology rolls forward, you are coming down a technology curve. And so at some point in the future, that tarification pathway is probably more accessible to New Zealand than the Denmark style example.

Any other questions? Any more online? No. Okay. Thanks, everybody. Just to wrap up, this is my seventh year leading the Board as Chair. And I'd like to thank my colleagues on the Board for their support and the support and hard work of Malcolm and his executive team. I am proud to lead an organization committed to powering a sustainable and thriving. We've built strong foundations for future growth, and I look forward to continuing the good work for you, our shareholders, and for our customers and our wider stakeholders. Thank you, everyone, for joining us here today. I'd like to invite those present to share some more refreshments, which I believe are outside and take the opportunity to interact with those of us who are here from the management team and Board. This concludes our 2025 Annual Shareholder Meeting. Thank you.