Genesis plans to raise $400 million from the market. Photo / NZME
Genesis Energy said it planned to raise $400 million after reporting a record first-half profit.
The power generator and retailer – 51% owned by the Government – reported record first-half normalised earnings before interest, tax, depreciation, amortisation and financial instruments (ebitdaf) of $307m from $222.0m in the previous comparable period.
Genesis said the result demonstrated the strength and resilience of Genesis’ diversified portfolio of assets and the company’s ability to deliver strong earnings under variable market conditions.
The company, which runs the coal and gas-powered Huntly Power Station, continued to actively manage its gas position into the third quarter of its 2026 financial year.
“Current expectations are that winter 2026 conditions will revert toward more normal seasonal patterns, with thermal baseload and firming capacity available to support system security,” it said.
The $400m equity raise would be used to accelerate the development of its growth opportunities across renewable generation and dispatchable firming capacity, and underpin delivery of its “Gen35″ strategy.
The offer comprises an underwritten placement of $100m at $2.15 per share and an underwritten 1 for 7.9 pro rata renounceable rights offer to raise $300m at a price of $2.05 per share.
The Government has committed to subscribe to $198m worth of new shares, which will enable it to maintain its 51% stake.
The proceeds from the offer will initially be used to reduce net debt.
Among the highlights for the half were:
• Edgecumbe solar farm (136 MWp) Final Investment Decision (FID) delivered and construction will commence in Q4 FY26.
• Leeston solar farm (67 MWp) is on track for Final Investment Decision in Q4 FY26.
• Rangiriri solar farm (271 MWp) was acquired. Once operational, the Rangiriri solar farm is expected to generate around 437 GWh of electricity annually – enough to power 54,600 homes.
• Huntly BESS Stage 1 (100 MW/200 MWh) remained on track and within budget
• 10-year Huntly Firming Options for Rankine capacity were authorised by the Commerce Commission and came into effect on January 1, 2026.
The half started with record low inflows and snowpack, before spring saw South Island inflows, particularly at Tekapo, enabling higher hydro generation and materially reduced thermal generation.
Coal generation fell to 164 gigawatt hours (GWh) from 710 GWh in the prior corresponding period, as thermal assets shifted from baseload to flexible firming.
“This integrated portfolio response reduced Genesis’ carbon emissions and lowered the cost of generation,” the company said.
“The result reinforces the structural flexibility advantage of Genesis’ portfolio — enabling earnings to be defended in dry periods and enhanced in favourable conditions."
The capital raise would serve to accelerate Genesis’ pipeline of growth opportunities across renewable generation and dispatchable firming capacity, chief executive Malcolm Johns said.
“Genesis has developed a strong pipeline of attractive growth investments, with this new equity raise offer enabling the acceleration of circa $2b pipeline of growth opportunities to financial year 2032 across renewables and dispatchable firming capacity,” he said.
In its outlook, Genesis’ 2026 normalised ebitdaf guidance remained unchanged at $490m – $520m.
Genesis’ 2028 normalised ebitdaf target increased from mid to upper $500m to upper $500m - the higher end of a previously indicated range.
The company published its 2032 normalised ebitdaf outlook of $650m – $750m.
Finance Minister Nicola Willis said the capital raise would support and advance the Government’s goals for secure and affordable energy.
“We confirmed last year that we would consider requests from all three Mixed Ownership Model energy companies for Crown investment in commercially sound generation capacity,” Willis said.
“Genesis’ proposed investments will directly contribute to enhancing energy security, including through enabling Genesis to bring more flexible capacity to the market which can be used to address dry-year risk,” she said.
JamieGray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.