[Non-English content]. Good morning, 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 2026 annual shareholder meeting. We continue to hold this meeting in hybrid form and very much appreciate those shareholders who are able to attend. As always, our online streaming facility is available for those who couldn't be here in the room. Before we start, just some quick housekeeping for those in the room. The bathrooms and the fire exits are behind you. If we hear a fire alarm and a request to evacuate, security will help us exit down the stairs and assemble across the road on Reimers Avenue, which is out this way.
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. Type your question into the field and press send. Your question will be immediately submitted. Should you require any assistance, you can type your query and one of the Computershare team will assist through the chat function. Alternatively, you can call Computershare on 0800 650 034. Please note that while you can submit questions 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 one topic, they may be amalgamated.
Due to time constraints, we may run out of time to answer all your questions. If this happens, we will answer them in due course via email. For those present in person, during question time, simply raise your hand and one of our attendants will bring a microphone to you. Turning now to today's agenda. We will move through board highlights from the year, the Chief Executive's Review, a Q&A session, the resolution, and then general business. If there are any additional discussion points that you feel haven't been covered in today's meeting, please reach out to our investor relations team at the email address investor.relations@genesisenergy.co.nz. There's just one resolution to vote on this year. We are putting forward Simon Mackenzie for election as a director following his appointment by the board effective from 12 August.
You will be able to vote on today's resolution either in person or for those online using the Computershare platform. I will refer to instructions on how to vote when we reach that point in 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 2026 Annual Shareholder Meeting of Genesis Energy Limited officially open. Thank you all for joining us today. To begin, let me introduce your board of directors. Hinerangi Raumati-Tu’ua. Hinerangi joined the board in March 2022. She is Chair of the Audit and Risk Committee and a member of the Human Resources and Remuneration Committee.
Hinerangi is Chair of Tainui Group Holdings and serves on the boards of a number of entities, including the Guardians of New Zealand Superannuation. She brings extensive governance experience, having chaired and served on iwi boards and those in varied sectors including water, fisheries, local government, public trust, and the Reserve Bank of New Zealand. In addition to her strong commercial investment and corporate governance background, Hinerangi focused on the development of post-settlement commercial entities and commercial frameworks with a [Non-English content] Māori view. Thanks, Hinerangi. Warwick Hunt. Warwick joined the board in October 2022. He is a member of the Audit and Risk Committee and the Capital and Markets 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. Warwick is Chair of the Bank of New Zealand, a non-executive director of the National Australia Bank, and a fellow chartered accountant in Australia and New Zealand. Thank you, Warwick. Tim Miles. Tim joined our board in 2016, coming to us from his previous role as Chief Executive of Spark Digital. He is Chair of the Human Resources and Remuneration Committee and a member of the Health, Safety, and Wellbeing Committee. Tim has had a long executive career in customer- and technology-focused roles both in New Zealand and internationally. He is Chairman of 40 South Limited, a director of NZX-listed company oOh!media Limited.
Tim has served as a director of companies in the fields of technology, finance, and property. Thank you, Tim. James Moulder. James joined the board in 2018. He is Chair of the Capital and Markets Committee and a member of the Audit and Risk Committee. James has strong governance experience, having held a number of non-executive board and advisory board positions in the electricity and carbon industries. James previously held executive management positions at Mighty River Power, now known as Mercury Energy. Prior to joining the Genesis board, James advised the Singaporean government on the development of electricity hedge trading markets. More recently, he has been involved in the development of carbon and environmental markets in Asia. James' background advising the New Zealand electricity sector's regulatory bodies also strengthens the depth of our sector experience. Thank you, James. David Baldwin. David joined the board in August last year.
David is chair of the Health, Safety, and Wellbeing Committee and a member of the Capital and Markets Committee. David brings more than 35 years of international leadership and governance experience across Asia-Pacific, Europe, and North America. David 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, Origin Energy, Shell, and 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 and infrastructure private equity portfolio companies. David is also a non-executive director of energy companies in the Philippines and the United States, both in the Macquarie Asset Management portfolio. Thank you, David. Simon Mackenzie. Our new director, Simon Mackenzie, joined us on August 12.
He can't be with us today but has recorded a message which we will play later in the meeting. Simon has broad experience across the energy sector. Simon served as Vector's Group Chief Executive from 2008 to 2025, currently serves as a Director of Bluecurrent, and has previously held director roles for New Zealand Windfarms and the Gas Industry Company. Prior to joining Vector, Simon gained experience in both energy retailing and generation through roles with Mercury and ECNZ. During his tenure as Vector Group Chief Executive, Simon transformed the company from a traditional energy infrastructure operator into a more diversified technology-driven business. Simon has championed innovation across the energy sector, forging partnerships with Amazon Web Services and Google X, supporting early trials of solar and battery technologies, and overseeing major investment in Auckland's electricity and gas networks to accommodate growth, electrification, and climate-related resilience.
You'll have the opportunity to hear from Simon later and vote for his election. I'd like to take this opportunity to acknowledge our former director, Catherine Drayton, who stepped down from the board this year after seven years of service. Catherine was Chair of the company's Audit Committee and a member of the Markets and Risk Committee. Catherine's input to the direction of Genesis, her skills, and careful stewardship were invaluable. We thank her for her expertise, dedication to the company, and wish her 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 the skills held by directors. The matrix shows a very strong breadth and depth of expertise and secondary skills held by your board. The skills matrix is not set and forget.
The board is conscious of the need to keep an eye on the skills we need to create value in the future. Technology and AI are developing rapidly. The board and management are purposely developing our understanding across a broad range of initiatives to ensure we are well-placed to use technology and AI to drive shareholder value into our strategic delivery. We are, of course, not alone on this journey. Engaging with similar businesses outside of New Zealand and those at the frontier of data and AI is an essential part of this program. During the financial year ended 30 June 2026, the board was assisted by the following four committees in the performance of its functions: the Audit Committee, the Markets and Risk Committee, the Human Resources and Remuneration Committee, and the Nominations Committee. In June 2026, the board resolved to amend its committee structure.
This means that with effect from 1 July 2026, the board is now assisted by a modified group of four committees in the performance of its functions. An Audit and Risk Committee, a Capital and Markets Committee, a Human Resources and Remuneration Committee, and a Health, Safety, and Well-being Committee. The role previously performed by the Nominations Committee will now be undertaken by the board as a whole. As part of that decision, the board also resolved to amend the remuneration scale for committee responsibilities, but within the directors' fee envelope. Directors' remuneration was last reviewed in the FY 2025 year as part of the previously communicated biennial review cycle. No increase in the directors' fees pool was sought. Directors' remuneration will be reviewed again in FY 2027. Through our reporting, we seek to present a balanced view of how Genesis creates 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, a climate statement, a modern slavery statement, and a sustainable finance report. They can be found in the investor center on our website. I am proud to lead a strong and capable board of directors who provide their extensive experience and specialist skills for the benefit of our company, our shareholders, the wider community, and our other stakeholders. The energy market has continued to evolve over the past year. The independent review of electricity market performance led by Frontier Economics concluded with the government announcing a package of measures in response. Affordability and security of supply remain firmly in focus, and we are seeing that reflected in the regulatory and policy programs.
Striking the right balance between those two outcomes is critical, and Genesis understands this challenge particularly well given our role the portfolio plays in supporting New Zealand's energy security. Diversity of reserve fuel and generation remain critical components of this, as does ensuring the commercial cost of delivering this is carried proportionally across the entire sector. Policy makers and regulators are considering additional reliability obligations to strengthen security of supply through dry and low wind periods, and you will all be aware of the government's work on a potential LNG import facility. We are encouraged to see the broad consensus emerging across Parliament on the need to accelerate electrification of New Zealand's overall energy makeup. We do expect the election ahead to shape how electrification may play out over the near term.
Importantly, Gen35 has been designed to balance serving our customers well and delivering strong outcomes for our shareholders across the near and longer term. Our strategy is focused on the underlying needs of our customers and New Zealand's energy system and is designed to remain resilient through changes in the policy and regulatory environment. FY 2026 marked an important milestone in Genesis' transformation. Alongside a strong financial performance, we strengthened our balance sheet through a capital raise and launched our FY 2032 Growth Plan, positioning Genesis to accelerate growth while supporting New Zealand's energy security. This year's strong financial result was achieved through improved margin quality, cost discipline, and strong capital management. Favorable hydro conditions enabled Genesis to leverage its market-leading flexibility to support customers, strengthen New Zealand's energy security, and deliver value for our shareholders.
The investments we have made over the past few years to strengthen our trading capability enabled us to capture this value. Our normalized EBITDAF of NZD 522 million was up NZD 52 million on FY 2025. This keeps Genesis on track to achieve EBITDAF in the upper NZD 500 million range by FY 2028. The successful NZD 400 million equity raise completed in March 2026 not only strengthened our balance sheet but increased our strategic flexibility, enabling us to accelerate priority investments as part of the FY 2032 Growth Plan while preserving optionality as our development pipeline continues to mature. Our Gen35 strategy delivery is well underway with proof points now emerging. Malcolm will expand on these in his presentation. We have maintained disciplined investment in existing assets alongside new renewable generation and storage in line with our FY 2032 Growth Plan. We balance this investment with competitive shareholder returns.
The board moved to a fixed dividend policy for the period FY 2024 to FY 2025 to provide shareholders with certainty while we positioned the business for growth. As outlined at our annual results presentation, the board is reviewing our dividend policy beyond FY 2028 and will have more to say in the FY 2027 interim results in February. Regarding guidance for FY 2027, we are guiding to normalized EBITDAF of NZD 480 million -NZD 520 million, assuming P50 hydrology, wind, and solar conditions. As always, guidance remains subject to hydrology, fuel, and plant reliability, and no material changes in regulatory or policy settings. The health, safety, and wellbeing of our people is a priority for this board. This year, the board established a health, safety, and wellbeing committee to reflect the importance we place on this area and to focus our efforts on continuous improvement.
Among those improvements this year was the introduction of the GenSafe platform, enhancing our ability to capture insights, support timely decision-making, and strengthen learning from incidents and near misses. Effective risk management reduces exposure to high-consequence events across our operations. It was pleasing that recordable injuries reduced from 48 to 37 last year. To maintain this continuous momentum, we started a comprehensive review of our critical health and safety risks to ensure our controls remained effective and aligned with industry good practice. In FY 2027, we will upgrade and implement a new critical risk management framework aimed at strengthening how critical risks are identified, monitored, and controlled across the business. A reduction in our emissions this year reflected good hydrology, strong trading, and emissions reduction efforts across the business.
Our total greenhouse gas emissions, Scope 1, 2, and 3, decreased to 2,014 kilotons, down 47% from FY 2025, and the lowest level recorded since our FY 2020 baseline. While our emissions are trending downward over time and will continue to do so as we invest in new renewable generation, renewables will continue to influence emissions outcomes. While holders of Huntly Firming Options, or HFOs, own and hold their own thermal fuel reserves, Genesis, as the generator, is required under international carbon accounting rules to account for these emissions as our Scope 1. We expect holders will account for the same emissions as their Scope 3. This means that while HFO holders determine when and how much the thermal generation is called under their HFOs, that generation will affect Genesis's reported Scope 1 emissions. We will clearly identify the emissions associated with HFO generation in our future reporting.
Our emissions profile is therefore influenced by that HFO dispatch decision, hydrology conditions, and renewable generation. As a result, annual emissions are expected to fluctuate while the long-term trend will continue downwards. Achievement of our FY 2030 interim emissions target towards our FY 2040 net-zero commitment assumed deployment of biomass at Huntly. We have recently concluded that current commercial decisions do not support progressing biomass to the next stage of investment and, as a result, we no longer expect to meet the FY 2030 interim target based on normal hydrology and expected market conditions. During FY 2027, we will assess the implications of this on our FY 2040 net-zero target. We expect to provide an update in our FY 2027 climate statement. Huntly Power Station continues to play a critical role in maintaining security of supply when renewable generation is constrained.
As we continue to invest in renewable generation and flexible firming capacity, we remain focused on reducing emissions over the long term while maintaining a secure and reliable electricity system. In conclusion, along with my fellow directors and our Genesis Energy team, I would like to thank you for your continuing support of our company. Our renewable transmission must also deliver energy security and reliability, and we will continue to engage constructively with regulators to help ensure a workable pathway for new renewables 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 want to acknowledge the awards that Genesis has been recognized for in the past year across our wholesale and retail segments. These include our Women in Wholesale program winning the Wellbeing Award at the Energy Excellence Awards. Our Power Shout gifting program winning Best Social or Sustainability Initiative at the 2026 Asia Pacific Loyalty Awards. Our Wholesale Outages and Projects team winning two awards at the New Zealand Project Management Awards, and our People and Culture team winning the Business Impact Award at the Human Resources New Zealand Awards for their contribution to delivering on our Gen35 strategy. Awards like these are a reflection of the talented, dedicated, and innovative group of people you have striving to make your company better in every area. It is now my pleasure to invite your Chief Executive, Malcolm Johns, to address our shareholders. Welcome, Malcolm.
Thank you, Barbara. [Non-English content] everybody. [Non-English content] . From wherever you are listening, a warm welcome. It is a pleasure to speak to you today and set out how our team is delivering. Our strategy, Gen35, remains, and we are delivering Horizon 2, the period from FY 2027 to FY 2032. We refer to this as the FY 2032 Growth Plan. Let me first start by introducing our executive leadership team, and I would ask each to stand as I do so. Emma Oettli is a long-time member of our leadership team who seamlessly transitioned into Chief Financial Officer in April this year. Emma is an excellent example of the investment we have made in developing our senior leadership talent to ensure we have a strong internal bench ready to step up to executive leadership when appropriate.
Claire Walker is our very experienced Chief People Officer and has worked hard to strengthen our leadership bench through a combination of building and recruiting talent while setting up strong internal succession lines. Stephen England-Hall is our dynamic Chief Revenue Officer. Currently unique to Genesis, Stephen leads both our retail and wholesale functions, delivering our strongest gross margin outcome during FY 2026. Matthew Osborne is our experienced Chief Corporate Affairs Officer, navigating a busy year with a number of regulatory and policy matters following the release of the Frontier report. Ed Hyde is a very experienced senior executive leading our technology and transformation programs as Chief Technology and Transformation Officer. Tracey Hickman has an extensive and broad career across the energy sector and is our Chief Operating Officer.
I'm extremely proud to work with a strong executive team and alongside a great mix of established and emerging leaders who are delivering for our customers and our shareholders. We are no longer in an energy transition. We believe we have entered the age of electricity. We are seeing growing electrification in transport, heating, and data, not only here in New Zealand but across the world. Homes and businesses everywhere are experiencing the AI revolution, and this is accelerating change to levels we have not seen before. Electricity is both critical to this revolution and generally scarce relative to future demand. As we look ahead over the next few years, we are going to experience a rapid AI revolution that will need four core components: increasing amounts of electricity, data, processing capacity, and human judgment.
Regardless of how AI changes everything else, these four things will remain constant through the AI revolution. This means demand and supply of electricity are going to have to grow, and likely grow for some time to come. At Genesis, we believe electricity is New Zealand's energy solution. It's efficient, it's increasingly renewable, it's made in New Zealand, and because neither rain, wind, nor sunshine need to travel through the Strait of Hormuz, it provides energy security and independence. However, today, electricity only makes up around 30% of New Zealand's total annual energy use. 70% comes from non-electrical sources, and 50% of our overall energy is imported. As we have all been experiencing since conflict in the Middle East began, this energy profile, with its heavily imported components, can have a material impact on the total energy costs for Kiwi homes and businesses.
If electricity made up 60% of New Zealand's total annual energy today, the average household would be saving up to NZD 3,000 a year on total energy costs. New Zealand's total annual energy bill would be around NZD 10 billion a year less than it is today. This is why our vision is a country that lives Life at Full Power. Homes and businesses leveraging New Zealand's natural electricity advantage to thrive at full power for this generation and the generations that come after us. Achieving this is about the electrification of transport, heat, and data. To do this at scale and at pace, we need predictable long-term policy and regulatory settings that enable us to compete for both customers and capital in equal measure. This will not only lower the total cost of energy for our customers, it will empower the New Zealand economy for generations to come.
As a sector, we must deliver what we call the 60-95-100 formula. 60% electrification of New Zealand's total energy, at least 95% renewable generation, and electricity that is available 100% of the time, regardless of the weather or customer demand. For Genesis, Gen35 is about growing customer demand for electricity through electrification, reducing average generation costs from increased renewable generation and energy security and flexibility from Huntly Power Station and our three well-placed hydro schemes. Gen35: Life at Full Power delivers for our customers, our investors, and for future generations. For our investors, we are focused on embedding three commercial foundations into our culture: margin quality, cost discipline, and strong capital management. On margin quality, this year, group gross margin increased to NZD 949 million, up 10% on the prior year. This reflects how our teams are delivering across our customer, trading, and generation business units.
It is the strongest gross margin result for Genesis to date. On cost discipline, cost to serve reduced. An investment in our major technology program remains within the self-imposed overall envelope of NZD 145 million. As the major technology and single brand programs conclude in FY 2027, the focus increasingly shifts into ongoing margin quality and cost discipline outcomes. On strong capital management, we are investing to structurally lower the average core cost of generation by FY 2032 in support of increased margin quality. Each investment is assessed within our strong capital management framework, and we will deliver new generation through three structures: direct investment from our balance sheet, leveraging third-party capital into joint venture developments, and contracting power purchase agreements or PPAs.
I will now take you through what we have delivered in FY 2026 in each of our three cogs of customer, renewables, and Huntly, as well as touching on our major technology replatforming program. In customer, our team is delivering our strategy to lower the total cost of energy for our customers, while also lowering our cost to acquire customers and our cost to serve customers and improving netback outcomes. FY 2026 saw overall customer numbers move lower as planned, as we rebalanced our customer portfolio to improve our margin quality and cost discipline.
Netback increased to NZD 176 per megawatt hour, and as I have said, we delivered the strongest gross margin outcome for Genesis to date. This rebalancing of committed demand also enhanced our flexibility at Huntly Power Station. That allowed our trading teams to use that increased flexibility to great effect, as reflected in the strongest gross margin I have mentioned.
We have now delivered this repositioning, delivered a simpler retail operating model, and launched our single brand. If you turn to the right, you can see our single brand outside. Pleasingly, customer numbers returned to growth around May this year, with quality customer acquisitions continuing over quarter one of FY 2027. Electric vehicle planned connections are growing strongly. Rooftop solar connections remain in growth, with Genesis now the largest rooftop solar retailer in New Zealand. Flexible customer demand reached 58 MW, a record. We are delivering margin quality and cost discipline in our customer business, and we can see the direct link of this in our improved commercial outcomes in FY 2026 and early in FY 2027. In renewables, we will deliver more than 2 TWh of new renewable generation by FY 2032, and this will structurally lower the average generation cost.
In FY 2026 we delivered the first full year of operation from our joint venture, Lauriston Solar Farm in Canterbury. Tihori Solar Farm near Edgecumbe moved into construction, and we reached final investment decisions, green lighting Leeston Solar Farm in Canterbury. New power purchase agreements were secured for supply from Mount Cass Wind Farm, being built by Yinson Renewables in Canterbury, along with a new geothermal PPA in Northland, which will come into effect in FY 2029. Our PPA for generation from the Kaiwaikawe Wind Farm in Northland became effective, with the site expected to reach full generation in January 2027. As our renewable generation portfolio grows, we are monetizing the flexibility and dispatch ability of Huntly Power Station in ways we have not done so before. We have delivered capacity contracts to support maintaining three Rankine units, known as Huntly Firming Options, or HFOs.
These are a return on and a return of capital contract. HFOs have underpinned and de-risked the more than NZD 100 million in life extension investment we are making to extend the three Rankine units well out into the 2030s. Our new NZD 130 million, 200 MWh battery energy storage system, or BESS, has been delivered and is operational. We are proud that this is the most capital-efficient grid-scale battery delivered in New Zealand to date. We have committed to stage two of Huntly BESS, a further 200 MWh , for which construction will begin later this year. We expect BESS stage two to take over from BESS stage one as the most capital-efficient, grid-scale BESS delivered in New Zealand to date. We see the Huntly site centered around 400 MWh of batteries, three life-extended 240 MW Rankine units, and our 50 MW fast start diesel gas peaker.
We retain the option for a second fast start peaker, although there is no commercial case for that investment today. Those assets will be supported by diversified fuels of coal, gas, and diesel, with biomass remaining an option as economics improve into the 2030s. Should imported gas become an option, fuel pricing will continue to determine which fuels are dispatched at what times. We have also begun building new renewable generation around the Huntly site, with Rangiriri Solar Farm moving toward final investment decision. Gas storage remains of interest. However, it is no longer essential to delivering our FY 2032 growth plan objectives. In September, we contracted additional third-party gas supply for the period of March 2027 to December 2029 to support our industrial customers and electricity generation.
We are now clear on what we need to support Genesis's electricity supply and security across dry and low wind periods, and we are now well covered for these risks. For national energy security needs, over and above this, Genesis is committed to making a contribution proportional to its position in the overall sector. Flexible generation is a key strength in our portfolio, and our long-run generation share will be around 15%. However, we can flex down as low as 7%-8% generation share and up to as high as 18%-20% generation share, allowing us to maximize market conditions as we have demonstrated across FY 2025 and 2026, and we will demonstrate again in FY 2027.
We see our fair contribution to national energy security through this lens, and we have been clear since we launched Gen35 in FY 2024 that we can only maintain generation and fuel reserves where there is a clear commercial case for us to do so, which brings us to our decision to review the future of Unit 5, our 400 MW combined cycle gas turbine at Huntly Power Station. Unit 5 has not operated for half of each of the past two years. As we and others build new renewable generation, and with the recent addition of extra water storage now in play, and in an energy-only market context, it is challenging to currently see an attractive commercial case for Unit 5 beyond the very near term. To remain commercially viable in New Zealand, Unit 5 needs contracted long-term revenues, long-term cost competitive and reliable fuel supply, and fuel flexibility.
None of these things are currently available in New Zealand. As we indicated in our full year results, we have established a review team and commenced a review process of Unit 5. The team will be exploring options to secure Unit 5's commercial future in New Zealand, alongside options to sell it in the international market, and any other options that the team may choose to investigate. We expect this process will take us around 12 months or so, and we will keep the market updated as appropriate. Finally, a quick update on our technology program. As we detailed at our 2023 Investor Day, we are delivering three major technology re-platforms: a new billing and a CRM system in our customer business, a new financial management system, and a new electricity trading and risk management platform. This is the technology equivalent of a heart and lung transplant to Genesis.
These are complex programs and our teams are doing a great job. We currently remain on track to complete them within time and budget envelope that we gave ourselves. FY 2026 saw the completion of the consolidation of our three retail brands, Genesis, Frank, and Ecotricity, into a single unified Genesis brand. Our updated brand positioning is energy that never stops and our new tagline is Life at Full Power, chosen because they translate our strategy into clear customer and investor benefits. The new sunburst logo represents a raw, continuous source of energy in a bold and distinctive way. It also draws on the story of Maui capturing the sun, symbolizing the harnessing of energy, reinforcing our role in helping customers control and get more value from their overall energy purchases.
We have a market-leading strong brand position with high customer loyalty, and the changes being delivered under our single brand strategy over the coming months will strengthen our market position further. FY 2026 has been a solid year of delivery. FY 2027 will be the same. FY 2028 remains our target year for being clear of the major technology, brand, and transformational investment, setting the platform for Genesis to thrive over the years to come. We remain committed to upper NZD 500 million EBITDAF in FY 2028 based on P50 hydro, wind, and solar, and assuming no major unplanned outages or major regulatory changes. Looking now out to FY 2032, the period from now until 2032 is Horizon 2 of Gen35. We call it the FY 2032 Growth Plan. The FY 2032 Growth Plan has five delivery pillars.
Customer, where we will partner with our customers to electrify their homes and businesses to lower their total cost of energy, while also delivering lower cost to acquire customers and to serve our customers, to deliver margin quality and cost discipline. In renewables, where our focus is to structurally lower our long-term average cost of generation through delivering more than 2 TWh of new renewable generation. At Huntly, where we are putting in place a group of flexible, dispatchable generation assets and fuels to maximize the flexibility and security of our portfolio and lift our asset-backed trading outcomes. In operating costs, where we will deliver cost discipline to reduce our current core operating costs while also recognizing and managing our commercial headwinds, which broadly fall into two areas.
Increased operating costs associated with building and maintaining a strong future generation development pipeline appropriate to our portfolio, and the known and planned decline of Kupe production out to around FY 2034. Both of these headwinds have been included in the FY 2032 numbers shared during our capital raise earlier this year. To recap, we are building a culture focused on margin quality, cost discipline, and strong capital management to deliver growing quality demand, lower average generation cost, increased margin from flexible dispatchable generation, a competitive operating cost base, while leaning into and managing our known headwinds.
Critical to this is how we develop and strengthen our people. During FY 2026, employee engagement remained strong, with overall engagement of 78% remaining above the New Zealand benchmark of 75%. These results, during a period of profound change within Genesis, demonstrate how we are delivering our strategic objectives in leadership and culture development.
A core part of our strategy delivery will remain investing in our people and our leaders to ensure we have a strong internal leadership bench and we are evolving our leadership and leadership structure to reflect both the dynamically changing internal and external operating environment without compromising strategic delivery. We have developed an awesome group of people, and they are doing some very cool stuff right now. I am extremely proud of them and extremely proud to be part of this team. In wrapping up, we can expect the regulatory context for electricity to remain politically contested in New Zealand for the foreseeable future. We can expect wholesale electricity prices to continue to fluctuate as we navigate what will be a dynamic context for supply and demand balance over the coming years. It is, however, largely a rational market that has served New Zealand well for decades.
What will remain constant is that we are in the age of electricity, and the transport, heat, and data sectors of our economy are going to electrify. That means we will all have to continue to compete strongly for customers and capital to ensure the age of electricity is a golden age for our generation and the generations that come after us. We are well into building a company that can deliver a strategy designed to navigate that political contest in energy policy and the ups and downs over time in supply and demand dynamics. We will deliver Life at Full Power for our customers and for our investors. I'll now hand back to Barbara. [Non-English content].
Thanks very much, Malcolm. We now have an opportunity to take questions on the presentations that you've just heard. Questions from the floor are now open. If you do have a question, indicate please by raising your hand. Please remember that this meeting is being webcast. You'll need to be heard by a remote audience, so please wait for the microphone to be passed to you before speaking. Those shareholders attending online today may also submit questions, and I will address those questions after we have addressed the questions from the floor. Before asking your question, please state your name and if you are a shareholder, proxyholder, or shareholder representative. Thank you. Are there any questions from the floor?
Alex Ball, New Zealand Shareholders Association proxyholder. Thanks for the presentations. Very detailed and comprehensive. Quick question, and it's a minor disclosure question. You've put up the corporate governance skills matrix for the board as a collective skills matrix. Thank you for that. Leading companies and an increasing number of companies on the NZX have been moving to an individual director skills matrix, which allows shareholders to understand the individual skills that directors bring to the collective board. I know that a number of your peers in the listed energy sector are already doing that. Have you got any plans to have a look at that?
[Non-English content] , Alex. Nice to see you here. Look, that is definitely something we can look at. As I said, skills amongst the board are not a set-and-forget thing. I think going forward, yeah, let me take that away with the team, and we can see if we can make that better and more aligned to what best practice might be nowadays. So thank you. Graham, there's one over here as well when you're ready.
[Vincent Drago]. I'm a shareholder. Two quick questions. One is about the guidance for 2027. As against a profit of NZD 522 million, there's a guidance of a range from NZD 480 million- NZD 520 million. From the presentation that we have heard, I would have thought the guidance would be at least 10% above what is indicated. The second question is, pardon me if I'm wrong, but the customer base has fallen. Is that what was mentioned? Customer base has fallen. What would be the primary reasons for that? What are we doing to reverse that and increase the customer base? Thank you.
Well, thank you for your questions. I'll start with the question on the customer base. You will have heard that we have merged three entities inside Genesis, one being Genesis, one being Frank, and one being Ecotricity. As part of that, our focus has been on customers who are of the most value to the company. So in our view, yes, it's great to have a lot of customers, but we want those customers to be high-value customers. So we will focus on the contribution that they make and really hone in hard on those customers who make the most contribution. So while customer numbers might be going down, the value of the contribution from the retail book from customers won't be. So you'll see that just slight change in dynamic.
On the forecast, the guidance that we have given, as always, it assumes things like P50 hydrology, wind, solar, and so outcomes will fluctuate from year to year based on those particular dynamics. The year we have just been in, it has been a favorable year for Genesis because of those hydrology dynamics and the other initiatives that the team has put in place to get to the result that we have got to, which was a very good result, a very strong result. Looking forward, I think it would be remiss of us to give guidance based on hydrology that might not happen. We always guide towards that P50 hydrology. You will see us during the year, should the need arise, as we have done in the past, we might change that guidance just depending on how things are tracking in and around that hydrology component.
Do you want to add anything more, Malcolm?
I would just add that we still have one-off or the technology spend is NZD 40 million this year. The major technology programs that I talked about in my presentation, we still have NZD 40 million worth of operating costs in this year. They come to an end in the end of FY 2027, so they move out, and I think that is probably the 10% difference that you are thinking of, because our policy is to expense those programs as we build them rather than capitalize them. We capitalize a small portion, but the majority of it we are expensing as we go through.
Thank you. Question here.
Hi. Is it on? Yeah.
Yeah.
Okay. You've indicated that last year hydro was very favorable.
I just want to talk about importation. Imported costs of coal when there's local available across the road at Huntly. Kupe winding down with the potential of the future development of gas. These are politically overtones statements because I realize they're all very relevant to the election at the moment. Importing LNG is very contentious at the moment, and the question is, what's Genesis policy regarding the climate concerns, re-accessing local coal in Huntly and reopening gas fields in New Plymouth, which some political parties are indicating they're very keen on doing? Thank you.
Thank you. Look, I'll start, and I'm sure Malcolm will have a much better answer than I do ultimately. I covered a lot about emissions in my presentation. Hopefully you heard, we are on a downward trajectory, but it does go up and down depending on all the conditions we have. On coal, the coal can't just be any source of coal. There's a specific type of coal that's required for us burning. Yes.
I kind of want to challenge that a little bit.
What Sorry, what particular point do you not agree with?
I don't agree with the fact that the local coal could not be changed economically, to be available for power generation at Huntly.
We do use a lot of local coal at Huntly, so I'm sorry if you've not been clear on that.
No, I'm just worried about the import factor because on the cost thing, import is a strong variable in your decision to wind down Unit 5 and also just generally it seems to be that. Was it the 95%? It can change the balance sheet. I'm just saying that hydro was very favorable, and that's not always going to be the case. I think there is a I want to hear more about the other concerns when it's not a wet year, when the lakes aren't full.
We can pick that up with you offline. I think the people in our fuels team would be the best group to answer some of those questions. I'm well aware that the cost of importing coal, of course, is high. There are costs associated with that, with shipping it and transporting it into New Zealand. The coal that we bring in is the right specification for our machinery, and the local coal that we buy is also the right specification. We work hard to get that particular balance right because we are aware of the additional cost associated with importing. Look, on LNG, we don't need LNG for our portfolio, but obviously were it to come in, that changes the dynamic again. You had a question around Kupe. Sorry, what was that particular question?
Reopening. It's not a done deal. There's some political parties that are keen on reopening the gas fields that are available in Taranaki. It was a political decision to shut them down, and it's an issue on this election, I happen to know, being somewhat a local of Norwegian. Yeah.
Thank you. Look, were that to happen, we of course, will respond to whatever change in fuel supply might happen in New Zealand, and that's one of the strengths of Genesis. We do have good options around how we manage the flexibility of fuel that is available to us as a gentailer. Were that change to happen, then our response will be commensurate with that change. But who in the team is best to manage an ongoing question? Tracey, would you mind just standing up? If you want to find Tracey at the end of the presentation, please talk to Tracey about the fuel flexibility issues and the political dynamics that you've been raising. Thank you. There was a question here.
Thank you. [Keith Stewart], I am a shareholder. Why doesn't Genesis build another coal-fired unit at Huntly? That is why Huntly was there. It's got the coal, it's got the water, it's got all the facilities. The Chinese build them all the time. Why doesn't Genesis build a coal-fired unit at Huntly? That would solve all of New Zealand's electricity problems, and it would be reliable. It would be 100% online. It's the obvious thing to do.
Thank you very much, Mr. [Stewart]. Malcolm, I'll pass that one to you.
I think as New Zealand builds more renewable generation, the amount of thermal reserve generation that you need will naturally adjust. We've invested over NZD 100 million on extending the life of the existing coal-fired Rankines out into the 2030s. It is a question for New Zealand, I think, more broadly, in terms of what the long-term thermal backup will be. I do note that some political parties have made comment in the last 24, 48 hours around the potential for a new Rankine, albeit on biomass, produced from woody biomass. It looks like that is a debate that is beginning to evolve, and it's certainly one that we would participate in.
All right. Thank you. Also, that would mean that Genesis could sell more electricity to the AI. I can't understand why aren't you building. You should be building 10 of them, actually. There's coal there.
Well, we do—
Plenty of coal nearby.
We do have three of them at the moment.
Yeah, I know. Thank you.
Thank you very much, Mr. Stewart. Any other questions from the floor before I? Okay, thank you. Matt, do we have questions online?
Yeah. We have a question.
Thank you.
Yes. [Edmund Stranahan]. I am a shareholder. Two topics I wanted to raise questions on. One is just purely relating to the financials. When I look at the factors in there, you have the valuations of derivatives in there. The actual fluctuation in 12 months from a positive to a negative, seems to add up to about NZD 271 million. That is a hell of a lot of money. How come? Why has it changed so much in 12 months?
Well—
I'll pass to Malcolm or maybe to Emma.
Yeah. I'll pass to Emma so that you can have a more technical explanation. Broadly, accounting policy requires us to act as if we sell all of our forward contracts for electricity on June 30. We have to value them against the market on that date. This year, because of the low wholesale prices, a number of them were theoretically out of the money. That's why the valuation swings around year on year. We don't sell those forward contracts because the part of the equation we're not able to value under accounting policies is all of our customers. We've already sold that electricity to all of our customers. We have to value the forward supply contract, but not the forward demand contract, and that's why it affects the balance sheet the way that it does.
I'll get Emma to stand up quickly. Don't try and explain it now, but maybe—
You've done a pretty good job, Malcolm.
Maybe you can connect afterwards and have a chat on it.
Probably the one thing I would add, though, that is a non-cash adjustment. So what we actually pay for those forward contracts when they become due is still the price that we've agreed. So while it has this big net profit swing that you do see, the value we can derive in terms of the cash output, also ability to sell that energy, is still locked in. I can talk to you later about it.
Thank you.
Thanks.
The second question I wanted to ask was relating to data centers. They seem to be using a lot of electricity. There's a number of factors I see come into this that are very relevant. Is Genesis sort of of the attitude it might be better to keep away from data centers and not supply them or actually go into supplying them? Because with the amount of electricity they're using, I understand it's, well, if I call it, you'd have the pretty high cost of transporting the electricity if you didn't generate it quite handy to the site. If these sites are dotted around, well, even just the North Island, that becomes a very big factor.
Data centers definitely do make a big swing in the demand side of the equation, and I think it's up to the electricity sector to understand how we will supply into that, and that's something that Genesis is thinking about. You see examples overseas where data centers come with their own energy, they have their own peakers and things beside them. Whether New Zealand would ever go down that route, I don't know. We're certainly alive to the demand. As Malcolm talks about, electrification is a big part of New Zealand's future, and getting from that 30% electrification now to 60% will make a massive difference in the amount and affordability of energy in New Zealand. Data centers would take up a lot more energy again, and so the supply response to meet that energy would also have to be a fairly large response.
But Malcolm, do you want to add something?
I think, as I mentioned, the supply and demand balance for electricity is going to be very dynamic, where you've got the potential for large blocks of demand to suddenly become available and also large blocks of supply to suddenly become available. I think if you look at New Zealand overall, we've got something like an annual demand of 42 odd terawatt-hours of electricity a year. We have a national pipeline of more than 40 TWh of generation we can build. So we're far from running out of opportunity and options as those dynamics play out.
Thank you. Are there other questions before I take questions online? Okay, Matt.
Okay. We have first question here from shareholder [Eva Quilling]. She is querying Simon Mackenzie's absence from this meeting, and asking how available will he be to attend future Genesis board and committee meetings in person.
Thank you for the question. Prior to joining the board, Simon flagged to us that he had a family commitment in Europe at this particular time. It was a known thing when he joined. We all knew that he would not be able to make this meeting. It wasn't a family commitment that he could change. I'm very satisfied that Simon's got the capacity and the ability to be a really effective member of this board, and I'm really looking forward, as are all of us, to working with Simon. Please rest assured that his capacity is not constrained. This is just a one-off thing that happened at this moment in time.
Thank you. Next question here is from [Stephen Main]. Mr. [Main] is referring to the NZD 400 million capital raise undertaken in March earlier this year. He asks, why was there a NZD 100 million placement component to the capital raise when pro rata raises are the fairest way to go? He goes on to ask whether we will be offering a share purchase plan to make up for the dilution impact of the placement. Also queries, in terms of the rights issue, the NZD 300 million rights issue, why the complication of making it a 147.9? Who came up with that number? Should it not just be 1.8?
Thank you very much, Mr. Main, for the question. Sort of addressing your question about share purchase buybacks. Is that right, Matt?
He says, "Will there be another share purchase plan to make up for the dilution of the NZD 100 million placement aspect of the capital raise?
If you look at it in the round, the whole equity raise was designed around fairness to our customers, getting the support from the government aligned to the amount of capital we were trying to raise, and a placement was a particular component of that to make sure that we were able to secure the NZD 400 million that we were looking for. I think that the discount that applied across the board was very fair to shareholders. Actually, in this market, it was a very, very effective discount. I think the outcome in the round of the capital raise was very good for Genesis and very good for shareholders. There are, of course, lots of other alternative ways that we could have structured this deal, and it was the board's decision.
The board spent a good deal of time getting the structure right so that we could satisfy making sure that shareholders that were involved and those that weren't were fairly treated. I think we got a very good outcome for the company and for the shareholders in the way that the equity raise was structured and executed.
Next question from [Stephen]. He refers to Malcolm's recent opinion piece for BusinessDesk, where New Zealand's EV uptake rate was described as measly at just 2%. He asks, what policies would you like to see implemented to get this number up? Are there any examples of pro-EV policies in countries that have worked? What major Western countries are worse than New Zealand when it comes to EV uptake?
That's for you.
Right. I'm just trying to remember the BusinessDesk article. New Zealand has, if you include plug-in hybrids as well as full electric, we're somewhere around 3%-4% of total vehicles. The most important thing is to look at the core economics of changing from combustion engines to electric vehicles. To achieve that tipping point, you need to achieve two things. One is you need to achieve price parity between combustion engine and electric vehicles, and the second is you need to achieve range parity. In other words, for the same purchase of a vehicle, you can travel the same distance. We expect those two parities to occur in New Zealand sometime around 2029 and 2030. So the fundamental economics of purchasing electric vehicles versus combustion engine vehicles is likely to change around the 2030 mark. It's already changed in places like China.
They've already tipped over that balance. What we've seen is electric vehicle uptake accelerate when you reach that point. So I think from a market perspective, and New Zealand largely follows a market-based approach to these things, those two parities of price and range are the critical tipping points for when we think electric vehicles will start to supersede combustion engine vehicles in terms of sales here in New Zealand. Most people will be aware our fleet stays around for a long time, 15-20 years, and so it's going to take a while for personal vehicles to transition to electric vehicles at scale. What's of more interest is what's happening in light commercial vehicles, where the products that are coming into the market in terms of couriers and light commercial vehicles, et cetera, are much more exciting from our perspective.
With the conflict in Iran and the price of gas at the moment, we're seeing roughly a third of vehicle sales being electric vehicles at the moment. The market is working extremely effectively. As a country, we can make a decision to put in place policies that makes that go faster. I think that the most important thing is that the base economics of price and range parity and the alternate fuel are the critical elements to determine how fast the vehicle fleet will electrify.
Thank you.
Next question also from [Stephen Main]. "For those of us who like to invest in New Zealand energy companies and attend their AGMs, it was annoying that both Genesis and Meridian chose to have their overlapping AGMs an hour apart this morning. Could you please undertake to work with Meridian to ensure that your AGMs do not clash in the future? Also, how many shareholders have turned up today, both in the room and online?" I can probably answer that question. Firstly, very happy to engage with my counterpart at Meridian to avoid a repeat clash. Secondly, online, we have 41 shareholders, and approximately 20 guests, and in the room here today we have 85 shareholders and guests. Of course, we can't help it if Meridian copies us.
Nor will we collude with Meridian, Matt.
Next question, another question from [Eva Quilling]. "On the Genesis director skills matrix presentation slide, do I understand it correctly that only a minority percentage of directors have as their primary skills to govern in the areas of, one, health and safety, and two, customer insights?
I think when I spoke, I mentioned the establishment of a health and safety and wellbeing committee. The board recognizes that that is a very, very critical area for us as we help Malcolm and the team look after our people and engage in safety. I think my own position is I think we're all, as directors, a little bit modest in our capability around health and safety and our own self-assessments, because I see nothing other than robust challenge and very good questioning around health and safety and wellbeing. So as we establish this committee under David Baldwin as the Chair, I think you might find in the next 12 months that people get more comfortable with their own self-assessment as we work through the agendas and the papers for that particular committee. And what was the second part of the question?
Customer.
Customer.
Health and safety first and customer insight.
I think as we refresh this board going forward, and as we have done over time, the balance around skills in the skills matrix will change, and people will come in with different skills. So I would assess that Simon Mackenzie coming in has very good skills around customer. And so things like this are dynamic and will change. And I think it goes to your point, Alex, around showing our skills as individuals and not as type, I think might make a difference to how actually that's conveyed to you as shareholders. So I think that's a good pickup.
There's a further question here from [Eva Quilling]: "Please name the top three winning factors that led to Mr. Mackenzie's appointment to the board.
I would say very strong experience in the sector, so obviously as CEO of Vector for a number of years. He's got very strong experience around data and how data is applied in businesses like this. Then I'd say in the subset number three, he's got very strong health and safety and very strong customer experience.
That's it? Okay, so that part of the meeting has concluded. There are no other questions. So I now move to the formal part of the meeting. This year we have one resolution on which to vote. For those present, if you don't have a pen or a voting paper and would like one, please pop your hand up and our Computershare representatives will help you. For those online, you may cast your vote through the Computershare platform under the Vote tab. Once voting has opened, the resolution will allow votes to be submitted. To vote, simply select your voting direction from the options shown on the screen. Your vote has been cast when you see a tick appear on your screen. If you want to change your vote, simply select Change Your Vote, and you may change your vote at any time until I declare the voting closed.
I now declare voting open on the one item of business. The resolution is open in the Vote tab, so please submit your vote online at any time. I will let you know before I move to close the voting. You will also be able to raise questions before I formally put the resolution forward for voting. Those present in person, please raise your hands and a microphone will come around. This is relating to the vote we're putting in. The resolution proposes that Simon Mackenzie, who's eligible for election, be elected as a director of the company. The board has confirmed that Simon is standing as an independent director. The board recommends Simon to you as a director of Genesis Energy Limited and unanimously supports his election. Simon has recorded a message for shareholders, which we'll play for you now.
After that, if you do have questions, we'll take questions on that. Thank you.
[Non-English content] , and thank you for the opportunity to stand for election to the Genesis Board. I've spent close to 40 years in the energy sector, beginning with the Electricity Corporation of New Zealand, working across generation, transmission, and ultimately as a commissioning engineer at Huntly Power Station. Since then, my career has covered virtually every part of the energy value chain: engineering, generation development, wholesale markets and trading, networks, regulation and policy, technology, and obviously, importantly, customers. I spent over 25 years at Vector, including 18 years as Chief Executive, leading a complex portfolio of regulated and non-regulated businesses across electricity, gas, technology, and metering. That included significant infrastructure investment, acquisitions and divestments, and extensive engagement with global markets. Growth was also an important part of my role.
One example was the development of Vector's smart metering business, now known as Bluecurrent, which grew into a significant business across New Zealand and Australia, and on whose board I continue to serve. A particular focus throughout my career has been on how technology, data, and analytics can transform the energy sector. At Vector, we developed leading partnerships with global technology leaders, including Tesla, Amazon, and Google. Those experiences have reinforced my view that the next phase of the energy transition will not simply be about building more physical assets. It will increasingly be about using data, digital platforms, and AI to coordinate an energy system that is becoming significantly more complex. I also bring deep experience in regulation and policy, governance across electricity, gas, wind, and technology businesses, and a long-standing focus on health and safety, risk management, sustainability, and organizational culture.
I believe that combination of experience is particularly relevant to Genesis today. New Zealand faces growing electricity demand, declining gas availability, increasing renewable generation, and greater challenges around security. Customer expectations, resilience, and affordability are all key issues. Genesis has a unique role to play through Huntly and its critical firming capacity, but also through its growing generation portfolio and significant customer base. As a director, my role would be to support management whilst also challenging constructively, bringing experience, commercial judgment, curiosity, and a strong focus on customers, risk, and shareholder value. I am excited by the ambition of Gen35 and the opportunity ahead for Genesis. I apologize that I can't be here in person today. Thank you for considering my election. I would be privileged to contribute to the board and to the future success of Genesis.
Acknowledging that Simon's not in the room to answer any questions himself, and having explained how the Board views the appointment of Simon and the key strengths that he brings, are there any questions or discussion on this particular resolution? Yes. There's one here.
Yeah, I fully support Simon and—
Would you mind please just waiting for a mic so the people on the webcast can hear you? Thank you.
Yeah. I'm [Naki]. I'm shareholder. I fully support Simon Mackenzie. I've attended several of his meetings. He's very capable, very skillful. It's a great value to the company. Thank you.
Thank you, sir. We will pass that on. I am sure he will be thrilled to hear that. Are there any other questions relating to Simon's appointment? Any online, Matt? No. Okay. I now put to the vote the ordinary resolution that Simon Mackenzie be elected as a director of the company. We will give you a moment to mark your voting form or vote via the Computershare portal in relation to this resolution. So if you could do your voting now, please. Will the Computershare people come through and pick up the votes, please?
Yeah. Is there anyone in the room who still has not had their vote picked up? If those online could note that I am about to close the voting, please. Thank you, everyone. 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 have now been collected by Computershare, and the full results of the voting will be announced to the market as soon as they are available. We are reaching the conclusion of the meeting, and shareholders now have the 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 tab, type the item you wish to raise into the box at the bottom of the screen, and press Submit. Those present, please raise your hand if you have any general questions and a microphone will be brought to you. There is one over here. Could you pop your hand up again, sir? Thank you.
[John Shearer], shareholder. I have seen a bit on the news recently about plug-in solar. Is there something here for Genesis?
Malcolm, I'll pass to you.
Well, we've leaned right into rooftop or home solar. We've got over 30,000 customers across New Zealand. Our customer team is pretty skilled at designing products around new aspects of distributed energy. The short answer is, yes. If the products become available, we will work with our customers to design products that work for both of us.
Any other general questions? One in the front here.
[Linda Scarlet], shareholder. I'm interested to know why the Low Energy User rate is going to be taken away. I do understand across the board, not just your company. It's going to affect many, many people. What is the baseline energy cost going to be?
Malcolm?
Well, that decision is a national decision. It's a regulatory change, and we have to comply with the regulation. In terms of what baseline costs will be for individual customers, I can't answer that. But what I can do is link you with Stephen after this, who can talk perhaps about your particular case.
Okay.
Okay, fine. Yeah.
It's a general question.
Okay. It is an individual thing. It does vary from household to household. As I said, we've moved to simplify our retail model and our products, but to provide as much flexibility and tailoring as we can to our customer base. But ultimately, it's a regulatory decision.
Thank you. Any other questions online?
[Ian Rank], shareholder. Hi, Barbara.
Hi.
Just a question on low-level usage consumers, which is probably the majority of the general shareholders that are here. When you answered the question before, I think it was from the Shareholders Association or somebody else up there about your consumer numbers, you didn't seem to be too worried about the fact that you'd lost quite a few because they were low-value people. I think probably a lot of us are low-value people. What's being done to continue to look after us?
You go.
First of all, we're not focused on low-value people. Every customer has a different shape. Some customers use a lot of energy at breakfast and dinner time. Others use consistent amounts through the day. Some use a lot during the nighttime, some through the daytime. We have a generation profile that has a shape as well. The move to a single brand, and the planned repositioning of the customer base was to better match the shape of our customer demand to the shape of our generation profile. So it didn't differentiate on whether you're wealthy or not, et cetera, which suburb you come from. It was really about your demand profile. If you look at the dynamics of FY 2026, we rebaselined the customers down to around 500,000 customers, and our gross margin went up by 10%.
That's just really a better match of our generation and our demand profile. So it's not a segmentation of customers, it's just matching the way we generate electricity at Genesis, with the demand profiles of different customers. We have a very strong program in terms of supporting low socioeconomic groups, consumers that are in difficulty, and also not-for-profit electricity retailers. We believe we do more than our fair share in that space.
Ian, that was a way better answer than mine.
There's a question over here.
There's a question here and there's one over here.
Oh, hi. [David Bluebach], shareholder. I have a question on the RNZ, Radio New Zealand article saying that the Genesis profits had halved to NZD 85 million on valuation requirements. No one's brought that up, so I'm assuming people aren't too worried about that. Just in very simple terms, can you explain that in plain English as to what that means, please?
I think the metrics to look at for Genesis are the EBITDAF and the free cash flow metrics. Profit can bounce around based on the derivatives, which is the explanation that Malcolm gave. There is a way you can get from your EBITDAF back down to your profit and see how it changes from one year to the next. I would encourage shareholders to look at the EBITDAF numbers as the best measure of how Genesis is performing in any one year or between any one year to the next.
You don't think that's going to affect dividend payments—
No, no.
—in the future?
It is completely outside of that. Thank you for the question. Question over here.
[Gavin Logan], shareholder. My question is about the difference in cost between using coal for generation and renewables. Could you give us an idea of the difference of cost, if there is any?
Yeah, sure. Generating by coal can move from about NZD 180- NZD 235 odd a megawatt hour, including the cost of carbon at its current rate. Renewables are going to be on a long run average, something around NZD 90- NZD 115 a megawatt hour, so it's about half. Renewables will be about half the cost of thermal generation. But when it comes to wind and solar, when you generate that electricity, it generally has to go to customers straight away. The advantage that thermal gives you is that you can store the fuel, and when customer demand is high, and the wind's not blowing or the sun's not out, you can decide to generate that electricity. So thermal is exceptionally good as backup generation or what we call firming. So it smooths out the wind and the solar.
To give you a sense, Huntly Power Station does more work backing up wind generation now than it does hydro generation, and that causes us a different dynamic. Backing up hydro is better because we turn the machines on and leave them on for a long period of time. As you'll know, on any sort of windy day, the wind speed changes through the day, and that does mean that we have to turn them on more regularly and adjust their level of generation more often. That increases the wear and tear on the machines. So, rule of thumb, renewables is about half the cost of thermal generation.
Thank you. There's a question down the back, and I think there's a question online as well, one online. So we'll go to the question down the back of the room first.
[Warwick Gold], shareholder. Are you interested in projects like the Tiwai aluminium smelter, supplying, tendering for that or not?
We didn't tender for that contract, largely because at that time, our committed customer demand was 6.8 TWh a year, which is kind of at the upper level of what we can. In fact, it's in excess of what we can realistically generate efficiently. So the reduction or the repositioning of our customer book means that we're now down at about 6.2 TWh a year. That's a better match between our supply and demand. Because our three lakes are fully deployed in service of our customers, we didn't have the excess generation capacity the others did. So it didn't make sense for us at the time.
Thank you. I'll now take the question that's online.
We have a question from Matt Smith of Chesham Estates Limited. His question is, "Could you please outline the company's intentions towards dividends through to 2032?
Thank you very much for the question. As we've mentioned, we've had a fixed dividend policy in play, and we will be reviewing that and come back to you with more information at the half year around February. I think questions are done. So thank you very much, everyone. To wrap up, this is my eighth year leading the board as Chair, and I thank my colleagues on the board for their support and their hard work, and Malcolm Johns and his executive team for their support and hard work. I'm proud to lead an organization committed to powering Aotearoa, New Zealand with Energy That Never Stops. 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 refreshments with us and take the opportunity to interact with the Board and the team. This concludes our 2026 annual shareholder meeting, which I now declare closed. Thank you, everyone.