Genesis Energy Limited

Kia ora, and welcome to Genesis Energy's FY22 investor presentation. I'm Mark England, the Chief Executive, and this morning, myself and James Spence, our new CFO as of March this year, will be discussing Genesis Energy's results as we look ahead and back on FY22. We'll also cover some operational highlights and our strategic outlook. We'll be joined on the roadshow, as the slide says, by Tracy Hickman, who as well as being Chief Customer Officer today, has agreed to be interim CEO when I step away after the ASM in October, ahead of a permanent CEO being appointed by the board. So after mentioning a few highlights, James will cover off our financial performance, and then I'll come back on for the operational performance and strategic outlook. Slide four covers our highlights over the year across financial, operational, and social metrics. Our reported EBITDAF of $440 million is our strongest EBITDAF since listing, and demonstrates momentum in the business that has been built up over several years. NPAT is up too. However, those of you that have followed our sector for a while now know that it is materially impacted by fair value adjustments on derivative profits and asset revaluations, both of which are affected by a higher wholesale price curve. This year, the swaption contracts, which conclude in their current form on December 2022, were a key driver of this NPAT improvement. More on those later. We continue to grow out our dividends and provide shareholder value with an 8.9 cents per share final dividend. So total FY22 dividends were 17.6 cents per share. The full year dividend represents the eighth year of continuous growth. Operationally, the business is performing well with strong customer loyalty. Customer churn declined to under 13% and the MPS score rose to 51 points over the year. Carbon emissions significantly declined in FY22 after FY21 was characterized by substantial dry spell and disruptions in the gas market. So Genesis was required to support the energy sector and increase our thermal generation that year. This year, with more normal conditions, our emissions significantly reduced, helped by a full year's generation of the YPP wind farm. FY22 emissions were also about 20% lower than two years ago before the YPP wind farm was up and running. As a company, we're also mindful of our impact on the communities we operate in and have highlighted some of the social impact we've had as a business. PowerShout gifting, for example, was piloted in FY22. This gives Genesys customers the option of gifting their free hours of power to vulnerable people. For every hour given away by our customers, Genesys matched it. So Genesys and our customers gave away over 130,000 hours of free power. As an employer, we've worked to ensure gender equity to make sure all of the Genesis whānau are paid what they're worth, and that women have equal leadership opportunities. I'm proud to now have a gender balanced executive team, and the pay equity gap has also continued to decline in FY22, now down to 1.3%. Finally, our Nga Āra Creating Pathways program was launched in FY22. This gives young people opportunities at Genesis in apprenticeships, internships, and work experience. We welcome 21 individuals in FY22 and look forward to continuing this program to help build the Genesis workforce of the future. Just like Poe Limited, a collaboration with local Mirai and the Huntly area set up over the prior year, we see supporting career pathways in the communities we operate around as beneficial to both Genesis and those communities. I'll now pass on to James to discuss our financial performance.

Thank you, Mark, for the introduction, and good morning, everyone. It's great to be presenting my first set of results for Genesys. I've got eight slides. You'll see here some formats consistent with previous reporting periods and some new formats, particularly as we look at gross margin and cash flow on later slides. To start, I'll run through an overview of Genesys' FY22 performance on slide six. You can see revenue is down approximately $400 million in the year. This reduction was primarily due to lower generation volumes. In FY22, Genesis generated around 6.5 TWh, down from 8 TWh in FY21, with 3.7 TWh from thermal assets, which was down from 5.5 TWh in FY21. EBITDAF performance at $440 million in FY22 was up 24% on PCP, or 6% after the FY21 adjustments, the strongest performance since listing. I'll go into the drivers in later slides. The NPAT result of $222 million in FY22 is up considerably versus FY21. A driver of the NPAT result is the change in value of derivative contracts, which, again, I'll go into further on. The remaining items on this chart I'll go into further on later slides. So turning now to slide seven, where we'll look at EBITDAF performance. On this slide, you can see that FY22 EBITDAF improvement is driven by $100 million increase in electricity and gas gross margins. This is a result of a combination of factors, including generation mix, gas pricing improvements, and exclusion of one-off impacts from FY21. I'll go into this further on the next slide. You can also see that OPEX is up due to inflation, specific projects, and growth costs. Our strong EBITDAF performance was delivered across all three fuels. Coupé is down on the previous year despite higher gas production volumes following inlet compression, and this is due to the reset of contract prices. Now we'll go into some more detail on the drivers of our gross margin, turning to slide eight. So we're presenting gross margin by fuel as it's a way to look at the business, excluding the impact of internal transfer prices between business segments. Although the bar charts shown on this slide are simple, for those that want to see a breakdown into prices and quantities at a detail level, I suggest you look at this slide in combination with slide 33. So looking at the main drivers here, electricity margin is up due to around 200 gigawatt hours increased generation from our hydro assets. contribution from the 446 gigawatt hours from the Waipipi wind asset PPA, and non-repetition of the adjusting items from FY21. The improved hydro conditions nationally meant there was less reliance on backup thermal generation in FY22 and fewer swaption calls, which negatively impacted our results in FY21. Our coal stockpile means we're protected in the short term against the global rally in coal prices. And our longer term carbon hedging program leaves us with an advantage position for the foreseeable future. On the retail side of electricity, we've seen some improvements in pricing, particularly in the SME channel. Turning now to gas gross margin, which is up $45 million year over year. The story here is strong gains in retail and wholesale. In retail, we were able to improve the rates across CNI and SME. as the market moved to follow the higher wholesale and carbon prices. In wholesale gas, there were several factors in play. Firstly, legacy sales contracts concluded in December 2021, which were not renewed. This enabled Genesis to focus our sales on higher value channels at better margins. We benefited from a lower transfer price from Coupe and FY22, but this was offset by relatively high prices incurred from Methanex last winter, to support the market during a period of constrained gas availability. LPG margins have improved, driven by better wholesale prices, where many sales are linked to global pricing benchmarks. LPG has also benefited from a lower transfer price from Coupe, although that's partially offset by inflationary pressures we're seeing in bulk delivery charges. At Coupe, production volumes increased following inlet compression, which completed in September 2021, and gross margin was $100 million in the year. In the second half of the year, daily production declined. Although gross margin was strong, it was down versus PCP due to the lower transfer prices from July 2021. So now I'll move to slide nine to look at operating expenses. The business has experienced inflationary pressures and has continued to invest, which has resulted in higher operating costs in FY22. With inflationary pressures due to the competitive job market and increase in headcount in growth areas, employee-related expenses grew by $9 million in the year. Our digital transformation project has been ongoing through FY22. This has included bringing on specialist staff to ensure successful implementation. We launched Frank Energy earlier this year and have already seen strong customer number growth with over 90,000 customers at 30th of June. We've also invested in our future gen strategy as we develop opportunities with our solar partner, FRV. Other cost increases include higher software and insurance costs consistent with inflationary pressures across the economy. To touch on NPAT on slide 10, The key point to note on this slide is the large gain in fair value movements, mostly driven by the roll off of the existing swaption contract in December 2022. With expiry only six months out, these now have a significantly lower liability. Our PPA is also improved in value as the wholesale market lifted. So let's now move to slide 11 to look at capital expenditure. In FY22, capital expenditure was down moderately, and we've seen a switch from capex at Coupe, following completion of the inlet compression, to increased capex at the power stations. A major achievement for the year was the completion of the first of three generator refurbishments at Tuai, part of the Waikaremoana scheme. Approximately $6 million was invested in this project. This was a significant achievement in the current environment given constraints on logistics, particularly in the second half of calendar 2021. This new generator increases capacity by two megawatts. The other two generators will be upgraded in over FY23 and FY24 to increase total scheme capacity by six megawatts. Not included in the capex number is our investments in associates. While our primary focus is to reduce emissions, we're mindful that the costs of the ETS are likely to grow, so it's important we hedge our long-term exposure. We continue to invest in dryland carbon and have recently committed to a second partnership, Forest Partners, to grow our investment in forestry and secure long-term carbon offsets. Now moving on to look at cash flow and balance sheet considerations on slide 12. Starting with the chart on movement in net debt on bottom right of this slide. You can see that net debt increased by $76 million in FY22 with working capital movements being a key driver. Cold stockpile of around 900,000 tons on 30th of June has been acquired at prices well below current market levels. This and some other small inventory movements has resulted in a cash outflow of around $110 million in the year. You can also see that there was the cash impact of the beach settlement in early FY22. Now, looking at our interest rate hedging position, you can see in the chart on the top right that we have 64% of current gross debt hedged in FY23, providing good protection against interest rate increases. Inevitably, we will see interest cost increases in FY23 given the current market conditions. The debt to EBITDAF credit metric has improved to our lowest level in the last five years due to the strong EBITDAF performance. This will assist Genesis in any future investment opportunities while maintaining the ratio within the target bands. So finally, turning to slide 13, where we look at dividends. This year, the board has declared a final dividend of 8.9 cents per share, represents continued growth in our dividend payments, and this is the eighth consecutive increase in dividend. To remind you, last year we updated our dividend policy to a range of 70% to 90% of free cash flow. The total dividend of 17.6 cents per share continues to reward shareholders while retaining cash on hand for future investment and growth. We continue to offer the DRP, which is offered a 2.5% discount to those who participate. With that, I'll hand you back to Mark to discuss our operational performance and strategic outlook.

Thank you, James. As many of you have heard me say before, deepening our engagement with customers is important to our strategy at Genesys, and our Energy IQ platform is key to this. We've just rolled out our latest version, which transforms the user experience, creating customizable features so people can feel at home on the app. As well as being able to choose an image of your home or business from a range of options and tag electric vehicles and solar panels to it, new features include LPG order tracking, more insights for EV customers, power shower history, and hourly gas use for those on a new gas smart meter. We currently have 12,000 gas smart meters installed with 25% of the customer base expected to have one by the end of FY23. Understanding when you consume your gas is a key step towards providing customers much more knowledge and advice on how they might choose to reduce costs and or reduce emissions in their home of the future. The rollout of the new app has seen more customers than ever engage with Genesys beyond receiving and paying a bill. And with help of our digital transformation program, we expect this to continue. Onto residential. In FY22, we saw continued growth in customer satisfaction and loyalty, demonstrated by the highest ever interaction MPS and churn continuing to decline. Total customer numbers were steady in the year, but it was pleasing to see growth in Q4 as we build momentum into FY23. Net back across residential electricity was slightly lower in the year as we did not pass through any wholesale or network price changes. Conversely, gas net backs grew strongly as higher wholesale gas and carbon costs were passed on to residential consumers. We also successfully transitioned from an extended loyalty provider or external loyalty provider, I should say, in FY22 to fully focus on Genesis's PowerShout. Our customers have supported this. as the bottom left chart shows, with more customers citing PowerShout as a reason for joining Genesis than on the previous scheme. And on to the business market, which, unlike the residential segment in slide 16, shows that SME electricity netbacks grew as we contracted a significant number of customers and higher wholesale prices were passed through. Multilateral partnerships such as FarmSource and the Capricorn Society continue to be a key focus for the SME segment, where we can build on enduring relationships. Energy services which drive energy efficiency and lower carbon outcomes continue to be the focus for larger industrials, where we can work in bilateral partnership for the longer term. We also saw a significant growth in CNI gas netback, where the market is more responsive to wholesale prices. In FY22, Genesis launched Frank Energy, succeeding our previous challenger brand, Energy Online. Slide 17 indicates Frank offers customers affordable no contracts for customers looking for an offering that sells it to you straight. We launched the marketing campaign in February 2022 with a series of irreverent ads across digital media and billboards across the country. We've had some real success with these campaigns with the brand preference rising to 76% since launch. There's also a big focus on digital sales mix with the proportion of digital sales rising from 38% to 56% over FY22. We're really pleased with how Frank has performed since launching with churn declining to below the rest of tier two market in FY22 and growing Frank's customers by nearly 5,000. Now onto slide 19 and the wholesale segment. In 2020, Genesis set out our 1.5-degree science-based target to reduce our portfolio's annual emissions by 1.2 million tonnes by 2025 and 1.8 million tonnes by 2030. We never expected the reduction to be linear due to the nature of weather-dependent wholesale market and the backup role coal plays. However, as mentioned on the highlight slide, after higher emissions last year due to hydro conditions and gas availability, we were able to significantly reduce emissions in FY22. While our primary goal is reducing our emissions and supporting New Zealand in decarbonising, we are mindful of the nearer-term costs of emissions under the ETS. In FY22, we extended our carbon hedge position through the purchase of long-term contracts and are now fully hedged through FY27 as well as part of FY28 and 29. The short-term wholesale market conditions will always impact our longer-term hedge position, but we are well-placed to continue to perform as a business, even as the ETS costs fluctuate. Beyond our current hedges, we have continued to invest in forestry, as James mentioned, following on from the success of the Dryland Carbon Partnership. We've invested further in a second fund called Forest Partners. These two forestry investments will provide Genesis a significant volume of long-term credits. The supply of these units will build up through the back end of this decade and be fully producing by the early 2030s. Moving to slide 20, and Genesys people. In the tight market for talent, Genesys remains committed to keeping our people safe, motivated, and valued. An example of our commitment to this is the rainbow tick accreditation we were granted in FY22. Our employee NPS remains strong at over 65 throughout the year, and we remain a living wage employer. We've always been committed to gender equity leading the way with our Minding the Gap policy in 2017, which has ensured women are paid fairly, and that every six months we consider where inequities may have emerged to close them. The pay equity gap has continued to decline to 1.3%, and we now have a gender-balanced executive team thanks to several years of focusing on the cross-functional as well as leadership development of some of our most promising people. At the same time, the proportion of women in senior leadership positions fell slightly, but still remains above our 40-40-20 goal. The number of injuries did increase in the year primarily in our LPG delivery operation as it continues to grow to support customer demand and new drivers are brought on board. Most injuries were preventable sprains and strains associated with the manual handling of LPG bottles. Each injury is assessed to identify how we can prevent similar injuries from occurring in future and we've seen the lost time associated with those injuries reduce over the last two years as minor strains are picked up earlier. A comprehensive program of work is underway to reduce injuries, focusing on safety culture, ergonomics, early intervention, and reducing risk through engineering design of equipment used in the delivery. At Genesis, we've aligned our sustainability objectives to five of the UN Sustainable Development Goals, which are most aligned to our business and the impact we can have. In FY22, there were many highlights, and we've grouped them into three pillars. A low carbon future for all, which as discussed before, we have a significant reduction in emissions in FY22 due to a full year of YPP and more normal hydro conditions. And we're also focusing on supporting industrial decarbonizing through our pilot of energy as a service with an increase in the number of customers also buying an energy service more broadly. Onto a more equal society, we're mindful as a major employer throughout the country that we have the ability to ensure everyone has the opportunity to benefit from decent work. As well as our efforts on gender equity and the living wage, we rolled out Anara Creating Pathways program in FY22. This program provides young Rangitahi the opportunities to work at Genesis and opportunities in STEM fields. And then a sustainable business. This year, we celebrated a decade of partnership with DOC in our effort to support the fear of conservation. We also launched our sustainable finance framework and now have 660 million across green bonds and sustainability linked loans. And of course, running a sustainable business also means sustainably meeting the needs of customers, employees, and shareholders year on year, much of which this presentation has been focused on. Now onto slide 22. We've also released several new documents today, providing investors and other stakeholders more transparency over sustainability aspects of our business. This slide draws your attention to them, and I recommend a good read through when you have time. All these documents are available for review on our investor center. I'll just speak briefly on the climate risk report. We launched our first report in 2020 and have continued to develop this framework. Considering the risks from the physical and transition risk of climate change are a core part of Genesys strategy formulation. While we see risk to our business, there are also ample opportunities. Our focus to become a more sustainable business is about positioning ourselves to minimize the risk and capitalize on the opportunities through supporting New Zealand's energy transition. Now moving on to our strategic outlook. To remind you all, our company purpose at Genesis is to empower New Zealand's sustainable future. In the wholesale market, our vision is to be an active enabler of New Zealand's energy transition through our FutureGen program and more. And across retail markets, we intend to engage our customers to inspire millions of sustainable choices. The three strategies of delivering more from the core, building for the future, and navigating the transition are what we are doing as we drive towards those vision statements. So as many of you will know, we've had several changes to our executive team at Genesis. While externally it may look like a big change, with three internal promotions, there is continuity within the business. When I move on in October, Tracy Hickman will be stepping in as interim CEO. The board is well underway with the formal recruitment process for a permanent CEO. And Tracy has been in the energy sector for almost three decades and has had executive experience at Genesis across generation, wholesale markets, and is currently our chief customer officer. So it will be an awesome interim and ensure stability. She'll be joining James and I on the roadshow and looks forward to meeting many of you then. You've heard from James this morning. He brings a wealth of experience from CFO roles in four markets, and you'll meet him in person on the roadshow if you haven't already. James has had a big and positive impact already on the business, and many of you will notice some of that throughout the slides he has just presented. And I'd briefly like to touch on the other new members of the executive team. Peter Kennedy is our chief digital officer. He has 15 years of digital marketing and customer experience, and prior to joining the executive team was Genesis' GM digital and new services. Peter is responsible for all Genesis technology and digital operations, including our digital transformation program. Pauline Martin is our chief training officer and electrical engineer by trade. Pauline was previously GM of electricity and carbon in our wholesale markets team. And prior to coming to Genesis, Pauline worked for several years at Mercury. We won't hold that against her though. As CTO, Pauline is responsible for our derivatives and spot trading, fuels procurement and future gen contracting. Rebecca Larkin has been appointed COO and is responsible for our generation assets, LPG operations, and solar development. Rebecca has been at Genesys for nearly 20 years and has had a number of roles across environmental generation, trading, sales, and retail operations. Matthew Osborne is another pillar of continuity, having joined Genesys as general counsel in 2018 and then taken the broader role of chief corporate affairs officer. He brings a wealth experience to legal, regulatory, and sustainability communications and governance. And finally, Nicola Richardson, who has been supporting me as Chief People Officer over the last six years and helped drive our cultural transformation to help make Genesis the vibrant, empowered and innovative culture it is today, is leaving in September to take up a similar role at ASB. Nic will be sorely missed across Genesis, as in her time we've become a living wage employer driven for gender equity across our business and successfully navigated the challenges of keeping staff safe and productive across the country during the pandemic. We're proud to see her progress in her career, though, and the process to replace it has started. So we refreshed our retail strategy recently under Tracy and Peter's leadership. As one of New Zealand's largest and most diverse energy providers, we understand the role we play in supporting our customers to make sustainable choices. We firmly believe that empowering customers to make the choices that matter to them is part of our role, which includes giving them the tools, services, and products to help them make more sustainable choices. There are a few examples on slide 25. And we're making the transition to EVs easier and more cost-effective for our customers through our soon-to-be-launched product, Everywhere. The add-on to our EV plan, which already offers a 50% lower rate at night, will be to enable energy roaming for our customers so they can fast charge at Airtel's largest EV charging network for the same rate as charging at home, all in one Genesis bill. I mentioned PowerShout gifting earlier, and we're now considering how we can build on that initial pilot. Looking ahead to new developments, we're thinking carefully about how we can support the transition to renewable fuels by building on the platform we've already created to offer more knowledge and advice to our customers through digital means. Today, we already tell our customers what the carbon emissions for their home are in real time. In the future, I hope Genesis will be advising customers on how they can reduce their emissions footprint as well as reduce their energy costs through time of use choices, energy efficiency, and actions around fuel choice that they make for heating, cooling, hot water, and cooking. And of course, our digital transformation, which is underway, also hopes to build a retail business that we can accelerate in the future. On slide 25, we explain how we intend to empower our customers with millions of choices. In the sustainability journey, our wholesale strategy on site 26 explains how we are actively enabling New Zealand's energy transition and continuing at pace to clean up our own backyard. We finalized a joint venture with FRV in February and have been working to identify sites and potential opportunities for grid-scale solar. We've made good progress in building a team and identifying potential sites and have four opportunities currently under detailed consideration. We hope to announce a lead development by the end of the calendar year. Like many other businesses, we are seeing increased costs and some delays to generation development. This has meant some extension to our solar pipeline timetable, but we're confident of a successful development through to FY27. The PPAs that support FutureGen have also been delayed, with Mercury advising us that Kawakawa financial close is now at risk. While we would be disappointed if this contract cannot be concluded as previously agreed, We do have other opportunities available to us and will make the most appropriate business decision for Genesis. We continue our investigation into biofuels at Huntly and the role this fuel could have in supporting decarbonisation across New Zealand more broadly. Our work so far has shown that biofuels could be a credible option for New Zealand if governments, the energy sector and forestry can work together collaboratively. We see a real opportunity for New Zealand to solve the dry year storage challenge as well as transition industrial production away from coal. Unfortunately, the trial burn of biomass at Huntley that was planned for this year has been delayed due to complications around international shipping and the availability of the raw material as the global energy crunch hit earlier in the year. But Genesis is optimistic the trial burn will occur sometime in FY23. So the next three slides, starting on slide 27, are our view on the risks and opportunities that lie ahead for the sector. While New Zealand has seen moderately higher electricity prices this year relative to the rest of the world, we've so far been largely insulated from the extremes of the global energy crunch. Europe particularly has seen a very significant rise in energy costs, with wholesale electricity prices up by five times or more. In retail energy markets, European consumers are likely to see their annual energy bills double or triple in the next year. Australia, too, has experienced significant volatility, some are driven by global energy markets, but also compounded by unprecedented interventions in the electricity and gas markets over the last 10 years and more recently, which should act as a warning to market participants and policymakers here in New Zealand. For the electricity sector, and in effect the gas market, New Zealand's only direct price link to global energy commodities is through importing of coal for the Huntley coal stockpile. In FY21 and 22, Genesis imported significant volumes at prices secured well before the global lift in commodity prices. While I'd love to claim that was a masterful strategy, at the time it was driven by fears of a dry winter that last year never materialized and our need to support fixed price swaption commitments at the time too. The result of having access to low-priced coal has been short-term price protection for New Zealand's electricity markets. If Genesis had been importing coal at this year's market price, the impact on the running cost of marginal thermal plants in an energy-only market would have resulted, we believe, in somewhere between a 50% and 100% increase in the wholesale price of electricity versus what we've actually seen. As you can see in the bottom right chart, while our stockpile is at the highest level it has been since well before the IPO in 2014, the cost of replacing it is substantially higher at today's prices. As any prudent business would do, we will need to start to consider the cost of replacement as we continue to maintain this critical energy security asset for the market and also protect value for Genesis shareholders in the process. So as Genesis continues to consider how it can support energy security, we plan to launch a replacement for the old Swaption product, which will be made available for all wholesale market participants, and we're going to call it a market security option, as outlined on slide 28. The existing Swaptions expire in December 2022, and while these have been a useful product for the market to date, they're not cost reflective in the current market. Recent discussions with competitors have flushed out that no one wants to take the price risk on coal. And as such, the terms of the market security options will be more flexible. The products will provide the flexibility for market participants to plan ahead to ensure they have sufficient backup generation for dry periods. Genesis will manage the complex logistics, plant management, maintenance, and dispatch of the thermal units. Ensuring unit reliability and fuel availability takes months of planning and therefore requires an upfront commitment. In the current global environment, Genesys cannot be expected to provide short-term backup without an upfront commitment from other market participants. We therefore won't be providing free optionality to market participants who have the capacity to manage their own risk but choose not to. We believe that doing this is also the best way to insulate large and small consumers from the spot price volatility that has been seen in energy retail markets overseas. In addition to the solution I just spoke about, there are several other issues that the sector, regulators, and the government need to consider, which we have laid out in slide 29. This winter, we have seen an increase in peak demand to levels not previously experienced. There are a number of factors driving this, but regulatory settings need to support the cost and consequence of high load over winter periods. Recent changes to transmission pricing regulations have exacerbated this and made it more challenging for generators to forecast and deliver the appropriate load. With overall electricity demand forecast to increase, it is important that regulatory settings send the right incentive to major consumers. The ETS is an important signal to all of New Zealand that decarbonising is not only the morally right thing to do, but is also economically rational. We have planned for higher carbon prices at Genesis for a long time, and it's one of the key reasons we're committed to decarbonizing our portfolio. With carbon today at over $85 a ton, it has nearly doubled in the past year, and is over four times the price it was five years ago. The higher price is already sending signals to the market, the electricity market, and that's why we're seeing so much renewable development come on stream. The consequences, however, of even higher carbon prices, like the settings recommended by the Climate Change Commission, are likely to reverberate through the wholesale electricity market and really start to impact consumers. While thermal generation is a small and decreasing component of the generation supply, as the marginal plant, it is very often the one that sets the price for all electricity sold. The consequence of this is while thermal generators such as Genesis will face increasing costs, all generators will receive more for the energy they produce. On this basis, it is important that the consequences of significantly higher carbon prices on the price of highly renewable electricity for everyone are fully considered when adjusting the ETS settings. Finally, the RMA reforms appear to not be going far enough to make it easy to build new renewables. While it is important to consider the impacts of renewable development on local communities they operate in, This needs to be balanced with the already high cost of construction in New Zealand and the urgency required for the country to meet our 2030 and 2050 emissions targets. Right now, New Zealand is building the assets for our low-carbon future, and the energy sector will play a transformational role. If we can get the settings right now and plan ahead, I'm optimistic New Zealand can lead the world to net zero. That's all for me now. I'll pass on to James to provide some detail on our guidance, and then we'll open up for questions.