Quarterly Operational Update

Quarterly Operational Update for the three months ended 30 June 2022.

>WIND DRIVES GENERATION UPLIFT - Wind production hits 1,269GWh lifting annual generation to 7,499GWh.

>LAKE TAUPO STORAGE HIGH - Lake Taupo 80% full following wet start to winter.

>ENERGY YIELDS LIFTING - Yields lift across all segments.

COMMENTARY

A wet June across NZ saw Lake Taupo inflows reach the 95th percentile and 71% full at the end of the financial year. Wetter conditions in July lifted Lake Taupo storage further to 80% full, positioning Mercury hydro generation for FY2023 well. While inflows for the quarter were close to median, the financial year was drier than normal with inflows slightly above the lower quartile. Accordingly, Mercury’s hydro generation for the year was below normal at 3,662GWh but broadly similar to FY2021.

National electricity demand was relatively weak for the quarter down 1.7% versus Q4 2021 mostly due to lower industrial demand (key contributors being Norske Skog, Panpac, NZ Steel and the Marsden Refinery). On an annual basis, demand trends were also lower with demand falling 1.2% on the FY2021 average.

Persistently high thermal fuel costs saw Auckland futures prices hold up in FY2023 and FY2024 at $193/MWh and $183/MWh respectively as at 30 June 2022. Short-term futures prices have eased slightly since financial year end due to strong national inflows and rising storage.

Operating statistics now include separate disclosures relating to the newly acquired Trustpower retail business from 1 May. These are reported separately to provide consistency in reporting for FY2022 (except for the Manawa contract for differences which is included in Mercury's buy CFD volumes). Trustpower retail statistics will be aggregated with Mercury's existing disclosures in subsequent quarterly operating reports.

Physical sales across all segments lifted in the quarter and for the year with annual mass market volumes dropping 117GWh (Mercury only), offset by higher sales to commercial/industrial customers lifting 367GWh. Average annual yield growth was strong, up $6/MWh in mass markets and $12/MWh in the commercial/industrial segment. Annual sold contract for differences yields also rose by $6/MWh for the year. Trustpower retail electricity volumes for May and June were 333GWh.

On the generation front, Mercury generated almost 7,500GWh in FY2022 bolstered by wind generation of 1,269GWh from Turitea North and the ex-Tilt windfarms acquired in August 2021.

[For Operational Statistics and Charts, please refer to the attached.]

ENDS

Howard Thomas
General Counsel and Company Secretary
Mercury NZ Limited

For investor relations queries, please contact:
William Meek
Chief Financial Officer
0275 173 470

For media queries, please contact:
Shannon Goldstone
Head of Communications
027 210 5337

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