Genesis Energy Limited

Thank you for standing by. Welcome to Genesis Energy Half Year Results 2026 Analyst Briefing. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Malcolm Johns, Chief Executive Officer. Please go ahead.

Good morning and thank you for joining us. Before we get into the detail, let me briefly outline how we will run today's session. I'll start by covering a quick snapshot of the half-year FY26 and our core investor value proposition before stepping through progress on our Gen35 strategy delivery. Julie will then take you through the group financial performance, FY26 guidance and our outlook to FY32. We will then move to the equity raise we announced to the market today before we open for questions. Let me start by recapping the highlights of our record first half earnings performance. Our FY26 half year normalized EBITDAF was a record 307 million. Over the past 18 months, we have stepped up leveraging our market leading flexibility to drive earnings outcomes. Across FY25, we leveraged our flexibility to defend earnings during periods of low hydro and low wind. For the first half of FY26, we again leveraged our flexibility, but this time to optimize earnings during periods of high hydro and high wind. This is Genesis's competitive advantage and core investor proposition, earnings resilience, no matter the weather. Group operating cash flow for the half was $183 million up 298% on the prior period. Net debt remains well managed and within our target range to support our BBB Plus investment grade credit rating. Over the last calendar year, we delivered total shareholder return of over 13% and the board has declared a half year dividend of 7.3 cents per share in line with current dividend policy. Gen35 is focused on building new renewables into our large, already established customer book, displacing baseload gas generation as quickly as we can, and further leveraging our market-leading flexibility to drive growth. Today, we are updating our outlook for FY28 to upper 500 million EBITDAF and extending our outlook out to FY32. Our FY32 outlook is driven by growing cash from our customer, renewables and flexibility cogs in our strategy, which we will speak to further shortly. As we have previously indicated, once we have embedded our new financial management system, we will be evolving our reporting to reflect these three value pools. This is most likely to be the FY27 half-year results. Margin quality uplift is a strategic deliverable, and during the half, we continued to optimize our customer book through the integration of Frank into Genesis and the full purchase of Ecotricity. Customer churn and net back uplift during this transition played out as expected. A major milestone this half was the first cohort of around 50,000 customers successfully migrating onto Gentrack's G2 platform. The transition went well, and we are quickly seeing encouraging operational and customer benefits. Release 2 is on target for delivery late this calendar year, early next calendar year. Moving now to delivering our renewable generation. In FY23, our development pipeline stood at around 364 megawatts. Today, it is around 2,500 megawatts and will continue to grow. We are on track to deliver our renewables growth objectives of around 500 megawatts of solar, 200 megawatts of BESS through advanced stage and consented sites with grid connections. We completed a partnership agreement with Jensen Renewables for first mover options on PPAs and joint venture wind developments across their 1000 megawatt wind pipeline. This is in addition to the offtake agreement we have with Jensen for 70% of the Mount Cass wind farm in Canterbury. That's scheduled to start construction in quarter three, FY26, with supply expected in quarter one, FY29. Noting that we also have our own existing wind options at Castle Hill, which we are progressing. Defending our earnings in dry, low-wind periods and optimising them in wet, high-wind periods is driven by our market-leading flexibility. We are delivering BEST1, a $135 million 100MW 2-hour battery, which is on track and tracking within budget. BEST2 business case is progressing on track. Adding solar and BEST developments will drive margin uplift across our three hydro schemes, which can store around 500 gigawatt hours in total. Turning now to the delivery of our major technology upgrades, we remain within our target total cost envelope of $145 million. Phasing is currently as indicated. However, there may be some movement between FY26 and 27 for spend that is currently scheduled around the middle of the calendar year. In addition to being live on stage one of G2, we are also now live on our new financial management system, and we are well into delivering our electronic trading and risk management system upgrades. I would now like to hand over to Julie to run through group performance. Julie.

Kia ora, Malcolm, and morena to everyone on the line. As Malcolm outlined earlier, we have delivered a record half-year earnings. with our Gen 35 initiatives continuing to deliver well and the business making good progress as we move through Horizon 2 of Gen 35. Our value proposition that we shared at our Investor Day in November remains strong, and in support of that, you will all now be aware of our most recent capital management strategy activation, being the equity raise offer that we put into the market today. This is an opportunity for our shareholders to invest with us in the acceleration of our growth pipeline of dispatchable firming capacity and new renewable generation, displacing gas from our baseload generation while sustaining our well-established customer position. We will talk more to this offer shortly, but first let me take you through our half-year results for financial year 26, our guidance for the remainder of the financial year, and our outlook to financial year 32. As you will see on slide 12 of the results presentation, Genesis delivered a reported EBITDAF of $303 million and a reported net profit of $95 million, both significantly up on the prior comparable period. The strong financial outcome was delivered through a period of significant supply across the sector due to the extreme weather conditions, driving lower wholesale prices and reducing the need for thermal generation as we brought off the market to meet our customer demands. Our revenue was down 13% overall, largely reflecting lower wholesale prices and reduced generation, while noting that the tactical activity undertaken to rebalance our customer demand mix has delivered higher quality retail margins. Before I speak in more detail about a group gross margin and operating costs, I do want to call out that the half-year results now reflect the accounting for the new long-term Huntley firming options. Our Rankin units are now valued as capacity assets. And we have also brought in a new derivative position for the long-term HFO calls that we expect from our counterparties along with their associated coal and carbon obligations. So moving on to slide 13, our group gross margin was up 27% on the prior period with a notable uplift from our generation mix and overall lower cost of fuel, coupled with an 8% increase in retail margin contribution. Our hydro generation increased by 17% against PCP as we responded to the weather conditions, which gave rise to an uplift in gross margin from displacing thermal generation. This was supplemented by around 250 gigawatt hours of higher generation from our renewable energy PPAs. The dry winter conditions and gas scarcity that featured in the prior comparable period saw a gas price rebalance in the current half, with the average cost of gas reducing by around $3 a GJ. This upside was partially offset by an increase in the cost of coal and carbon. Another call-out is our higher wholesale gas margin, which was enabled in part by tactically extending the shutdown of Unit 5 in a lower-priced environment and redirecting the gas to industrials in Q2. The strong contribution from retail reflects our continued focus on margin improvements. also noting that this result includes a full half year of ecotricity gross margin of around $10 million. And also of note during the half is that we saw a 15% increase in lines and distribution fees against PCP, with these costs being passed through to our customers. Moving across to operating costs, we had a 7% increase in spend against PCP, excluding digital projects. We have taken out around $5 million of costs from multiple initiatives, including our retail operating model reset and changing our insurance structure. However, we also have around $2 million of higher costs across the period as we continue to activate our productivity initiatives with temporary resourcing, and we work through realizing the synergies from our one-brand strategy. As Malcolm mentioned, our major digital transformation projects are tracking well, with financial year 26 being our peak year for the spend. During the half, we incurred around $14 million for our retail billing system and spent around $10 million on our finance system replacement, which went live on the 2nd of February. We continue to prioritise our maintenance projects with a slight ramp up in spend during the half in support of our rank and units activity to ensure they are standby ready for calls under the new LT long-term HFOs. Moving to capital management on slide 14, We generated $183 million of operations-free cash flow after stay-in-business capex. This cash was utilised to fund our dividend commitments and progress our growth investment pipeline in alignment with our capital allocation framework that I shared with you at Invest Today 25. We successfully released around $95 million of cash from our working capital with the establishment of the new coal energy reserve stockpile that is funded by our HFO counterparties. We are now working towards reducing our operational coal stockpile further as our growth investment opportunities advance. Our stay in business capex spend of $43 million for the half remains in line with our expectation for financial year 26 of $130 to $140 million. This spend is elevated in the latter part of the financial year as we ramp up activity, including overhaul and upgrade works for our hydro assets, and activity in support of prolonging the life of the Huntly scheme. Our growth investment spend of $70 million was directed to advancing our Huntly best construction, which is progressing well, and our solar pipeline, including the acquisition of the rights for Rangariri Solar Farm. Moving to slide 15, we continue to remain focused on our balance sheet and the strengthening of our capital management framework as a key enabler for GEN35. The activation of our capital management strategy is well underway, and we are confident that funding will not be an impediment to accelerating our growth investment pipeline and the associated returns growth. We remain focused on financial resilience and our investment grade credit rating, which was recently reaffirmed by Standard & Poor's at BBB+. The board has declared a financial year 26 interim dividend of 7.3 cents per share in alignment with our dividend policy, with a record date of 26 February 2026 and a payment date of 25 March 2026. Our dividend reimbursement plan remains in place as a valuable tool to manage our balance sheet through the cycle and this will continue to be operational alongside the equity raise due to the Crown's ongoing formal commitment to participate. To ensure fairness for shareholders, we've adjusted the DRP pricing mechanism as you see summarised on the slide. Moving now to our retail business, our focus on margin quality is reflected in the 19% increase in total retail netback across all segments. This is a key financial metric that we remain focused on with disciplined pricing, improved customer mix and reduced cost to serve. The reliability of our schemes and operations is another focus area to ensure our generation assets are available to us and to the market when needed, regardless of the season and the shape of the demand. This is a key enabler for unlocking flex for an optimized portfolio position. And as slide 19 shows, how our generation played out across the half with more hydro and increased PPA volumes and a material reduction in thermal, demonstrating how our portfolio flexes to market and weather conditions to protect our margins. And notably, we delivered a 21% reduction in the average cost of generation per megawatt hour against the PCP. As our investment pipeline matures, we will further optimize our portfolio and reduce the cost of generation. So in summary, the financial year 26 half-year financial performance saw us deliver a strong uplift in earnings through margin quality while maintaining cost discipline and a critical focus on the strength of our capital management. Our retail netbacks improved across all segments, our asset reliability was high, and we demonstrated market-leading flexibility across the portfolio. We continued to deliver on what we said we would, and we are focused on uplifting our earnings out to financial year 32, enabled by our pipeline of growth opportunities and our continued focus on productivity initiatives across the group. So moving on to the outlook for financial year 26, our normalized EBITDAF range remains unchanged from the upgrade we issued in January that took our guidance to $490 million to $520 million. The outlook for the second half of the financial year is premised on P50 hydro inflows and features more thermal generation as seasonal demand increases and brings generation cost pressure on gross margin. This all remains subject to hydrology, gas dynamics, plant performance and market conditions. I want to speak now to our outlook for financial year 32 as this is a critical year for Genesis as our growth investment pipeline of opportunities are delivered and activated. As Malcolm shared earlier, we now have a growth pipeline of around $2 billion that is enabling a financial year 32 EBITDAF range of between $650 and $750 million. This pipeline includes a range of advanced stage renewable developments that displays base load gas generation significantly reducing our total cost of generation as indicated on the slide, while leveraging our flexibility and customer demand position. We also continue to progress other GEN35 initiatives that are enabling productivity gains and driving our like-for-like OPEX target of around $380 million in real terms. while noting, though, that there will also be incremental OPEX coming into the business when our investments are operationalised and they start generating the EBITDAF uplift and returns growth. Our primary source of funding over the period to financial year 32 is our own operating free cash flow, which also includes a range of self-help measures, including working capital and inventory management. Operations free cash flow funds our stay-in-business capex and includes all planned major hydro and Huntley maintenance. And it also funds our dividend policy. Any surplus cash will contribute to the funding of our growth investment pipeline alongside the funding toolkit pathways, which now includes our equity raise offer of $400 million. Our capital management framework ensures a credible pathway to accelerate the delivery and returns from our financial year 32 growth pipeline. while maintaining our investment grade credit rating of BBB+. Serving our customers well and growing our total shareholder returns remain at the center of our thinking. We have delivered what we said we would over the past two years, and we are confident we will deliver what we say over the coming years. I'm now gonna hand it back to Malcolm to talk in more detail about our equity raise offer. Malcolm.