Contact Energy Profit Jumps 62% as Utility Eyes 250-MW Data Center at Former Gas Plant Site

New Zealand utility Contact Energy reported a 62% surge in full-year net profit, driven by the acquisition of Manawa Energy and stronger renewable generation, while simultaneously unveiling plans to explore a major data center development at its retired gas plant site in Stratford. The dual announcement underscores how traditional energy players are increasingly positioning themselves to serve the surging electricity demands of the digital economy.

Contact posted net profit of NZ$423 million for the year ended June 30, 2026, up from an underlying NZ$261 million in the previous year. EBITDAF increased 31% to NZ$1.01 billion, while operating free cash flow rose 49% to NZ$648 million. Revenue slipped 3% to NZ$3.21 billion. The year-on-year comparison excludes a NZ$98-million release of an onerous gas-storage contract provision that had boosted reported FY2025 EBITDAF, making the underlying prior-year figure a more representative baseline.

The acquisition of Manawa Energy, completed in July 2025, added approximately 2.4 TWh of hydro generation and contracted renewable supply during the year. Contact said it has fully secured the NZ$28 million in annualized cost synergies originally identified from the transaction. Renewable generation also benefited from a full year of output from the Te Huka 3 geothermal plant. As a result, Contact's own generation was 98% renewable in FY2026, up from 88% a year earlier, as thermal generation dropped 79%. The broader New Zealand electricity market reached 93% renewable during the financial year amid high hydro inflows and increased renewable capacity.

Looking ahead, the company expects normalized FY2027 EBITDAF of approximately NZ$1.05 billion, assuming average hydro and wind conditions. It also plans to raise its annual dividend to 42 New Zealand cents per share from 40 cents in FY2026.

Alongside its financial results, Contact announced a partnership with CDC Data Centres to explore construction of a large data center at Stratford in New Zealand's Taranaki region. The companies intend to seek resource consent for a facility with 250 MW of IT and compute capacity, equivalent to roughly 350 MW of total peak load when ancillary requirements are included. The project remains at an early stage, and neither company has committed to construction. Development would depend on approvals, anchor tenants and financing.

Contact said it intends for the facility's electricity demand to be supplied under long-term contracts supported by new generation from its 11-TWh pipeline of geothermal, wind and solar projects. Co-located battery storage is also planned as part of the concept. The Stratford site housed Contact's Taranaki Combined Cycle gas plant, which was retired in 2026 after reaching the end of its operating life. The location retains grid infrastructure and has 500 MW of grid-scale battery capacity already consented, while Contact and Lightsource bp are separately progressing a proposed 150-MWac solar project nearby. Contact's existing 200-MW fast-start gas peaking units at Stratford would remain operational.

Industry observers note that the Stratford project exemplifies a broader trend of utilities repurposing retired thermal plant sites—which offer existing grid connections and industrial infrastructure—into hubs for renewable-powered data centers. By pairing large-scale compute loads with new renewable generation and battery storage, Contact is effectively creating an integrated energy-digital campus that could serve as a template for other markets facing similar grid constraints and data center demand pressures.