90% probability Contact Energy's FY2027 EBITDAF reaches at least NZ$980m. FY2026 was a record NZ$1,011m, up 31% on the Manawa acquisition and a 37% lift in renewable output. In a hydro-weighted generator, the binding variable is rainfall, not strategy.
Contact Energy reported a record FY2026 with EBITDAF up 31% to NZ$1.011bn and underlying profit up 62% to NZ$423m, driven by the Manawa acquisition and a 37% increase in renewable output. Operating free cash flow rose 49% to NZ$648m. The final dividend of NZ$0.24 took the full-year payout to NZ$0.40, up 3%. For FY2027 management guided to normalised EBITDA of NZ$1.045bn and a 5% dividend increase, with Manawa fully integrated, NZ$28m of cost synergies on a run rate and NZ$84m of synergies and repricing benefits flowing into FY2027. Source: Contact Energy FY2026 annual result.
We lock a binary: Contact Energy's reported EBITDAF for FY2027 is NZ$980m or higher. Confidence 90%.
FY2026 delivered NZ$1,011m. Our threshold is about 3% below that already-achieved figure and roughly 6% below the FY2027 guidance figure.
Contact reported FY2026 on an EBITDAF basis at NZ$1,011m. The FY2027 guide reached us described as normalised EBITDA of approximately NZ$1.045bn. Those are different words, and our sources do not establish that they denote the same line. EBITDAF in New Zealand generator reporting conventionally carries an F for fair-value movements on financial instruments, which a plain EBITDA measure may or may not treat identically, and a normalisation adjustment is a further layer on top.
We could have quietly treated them as interchangeable. Instead this lock scores EBITDAF as Contact itself reports it, and sets the floor low enough — below the FY2026 reported EBITDAF, not merely below the FY2027 guided figure — that the labelling question does not decide the outcome. That is the same discipline applied in P-232, where two sources gave Dr Reddy's opposite year-on-year directions while agreeing on the level, and the lock was built on the quantity that was not in dispute.
The FY2027 story management tells is about integration: Manawa fully absorbed, NZ$28m of cost synergies already on a run rate, NZ$84m of synergies and repricing flowing through. That is real and it is largely within the company's control.
It is not, however, the variable most likely to break this lock. New Zealand's electricity system is hydro-weighted, and a generator with Contact's mix lives or dies on inflows into the South Island storage lakes. A dry year forces thermal generation at higher cost or purchases at elevated spot prices, and EBITDAF compresses regardless of how well the acquisition was integrated. The 31% FY2026 gain was itself helped by a 37% increase in renewable output, which cuts both ways: it flatters the base this lock is measured against.
That is the honest content of the residual 10%. It is a weather risk wearing a corporate-finance costume, and no amount of synergy delivery neutralises it.
RAOSCAFF locks P-244 on 2026-08-30, before the FY2027 result. Scored against EBITDAF as reported by Contact Energy for the year to 30 June 2027.
The floor sits below FY2026's reported EBITDAF, not merely below the FY2027 guide, so the EBITDAF-versus-normalised-EBITDA labelling question does not decide the outcome.