EBITDAF rose 44.8% but NPAT fell 78.0% on a prior-year one-off gain

Revenue grew 24.8% to NZ$2.7b.

PBT fell 72.2% to NZ$142m. The PBT-versus-NPAT growth gap of only 5.8 percentage points means the headline decline is dominated by the prior-year non-recurring item rather than tax, even though the effective tax rate normalised from 8.0% to 27.5%.

Operating cash flow rose 64.2% to NZ$578m, helped by a NZ$111m fall in trade debtors. Capex stepped up sharply from NZ$68m to NZ$296m, lifting capex intensity from 3.1% to 10.8% of revenue. Net debt eased to NZ$1.8b and leverage strengthened to 2.2x EBITDAF.

Management cites record generation and a full year of broader customer connections. With EBITDAF of NZ$841m and net debt at 2.2x EBITDAF (down from 3.3x), operating trajectory and balance-sheet capacity have improved together, which means the underlying earnings power has genuinely stepped up.

Tax and the prior-year disposal gain together account for the NPAT optics. A PBT-versus-NPAT growth gap of only 5.8 percentage points indicates the NZ$366m NPAT decline is overwhelmingly associated with last year's non-recurring gain not repeating. Investors evaluating like-for-like earnings should use EBITDAF or PBT against the FY22 base, not NPAT.

Capex intensity more than tripled in a single year. Total capex moved from NZ$68m to NZ$296m (capex/revenue 3.1% to 10.8%), signalling a step into a heavier investment phase. This matters because it will compress future free cash flow even if EBITDAF keeps growing, and it sets a higher bar for dividend coverage in FY24.

No FY24 EBITDAF guidance is carried into the supplied extracts; the interim release referenced a normalised FY23 EBITDAF target of ~NZ$795m, which the reported NZ$841m exceeded.

The half-year shape is unusual: HY23 NPAT was NZ$230m, implying H2 NPAT of -NZ$127m. This reflects the timing of one-off items rather than a clean seasonal split, so the implied H2 loss is not a forward-looking indicator. For FY24 expectations, the more useful anchors are the EBITDAF run-rate and the elevated capex profile, not the reported NPAT shape.

Stripped of that release, conversion would have been close to the prior-year level. The debtor-day shift may reflect timing of wholesale settlements or customer billing patterns rather than a structural change, so another period is needed to confirm the new run-rate. This matters because reported FCF leans on a working-capital tailwind that may not recur.

Free cash flow of NZ$459m covers the full-year ordinary dividend at 56.2% of FCF, but the payout ratio versus NPAT of 293.0% is uninformative given the one-off-suppressed earnings base. With capex stepping up sharply, FCF coverage of the FY24 23.3c guidance is the more relevant forward test.

EBITDAF of NZ$841m looks durable: record generation, full-year retail scale, and a normalised tax rate together support the underlying read. The NPAT line is the noisy one.

This briefing cannot assess hydrology assumptions, hedge-book positioning, generation-mix economics, or segment-level margins, because the supplied extraction does not include current-period segment splits.