EBITDAF up 28.5% on revenue down 5.2% as margin hit upper edge

EBITDAF rose 28.5% to NZ$537.0m on revenue down 5.2% to NZ$1.7b, lifting EBITDAF margin to 32.3% — at the upper edge of the supplied historical range (4-period mean 28.3%). Profit before tax swung from a NZ$96.0m loss to a NZ$27.0m profit (+128.1%), and NPAT swung from a NZ$67.0m loss to NZ$20.0m (+129.9%).

Operating cash flow rose 54.6% to NZ$351.0m, but capex stepped up 35.1% to NZ$273.0m (16.4% of revenue, up from 11.5%), leaving pre-lease free cash flow of NZ$78.0m. Gross borrowings rose NZ$145.0m to NZ$2.3b, yet net debt/EBITDA improved to 4.23x from 5.03x on the higher EBITDAF base. The declared interim dividend is 10.0 cents, up from 9.6 cents.

EBITDAF margin at 32.3% sits above the 4-period mean of 28.3%, while revenue contracted 5.2% (lower edge of the supplied historical range, mean +18.6%). For an integrated gentailer this pattern typically reflects favourable hydrology, generation mix or hedge/yield dynamics rather than customer-volume growth. The release excerpts cite EBITDAF being "supported by above"-average factors but the cut-off text leaves the driver formally unresolved.

The headline growth comes off a loss-making base. PBT and NPAT margins remain at 1.6% and 1.2% — lower edge of historical ranges (means 21.2% and 18.4%). The +128.1% / +129.9% growth percentages reflect a swing from prior losses, not normalised earnings momentum, and ROE remains at 0.4% (lower edge; 4-period mean 4.1%).

Capex intensity stepped up materially. Capex of NZ$273.0m absorbed roughly 78% of operating cash flow, and gross borrowings funded the residual investment despite the better leverage ratio. This matters because the deleveraging headline is driven by EBITDAF mix-shift, not by debt reduction.

The supplied second-half shape shows HY25 captured ~53% of FY25 EBITDAF, implying H2 has historically been the softer half; on that pattern, current EBITDAF momentum would put FY26 well above FY25's NZ$786m, but gentailer half-on-half outcomes are sensitive to hydrology and hedge-cycle factors that the release text does not quantify.

The release flags continued investment in renewables to "meet future demand growth and build resilience". Forward generation, hedge-book and customer-yield context is not provided in the disclosed excerpts, so the durability of the margin uplift cannot be assessed from this filing alone.

Working-capital movement helped: receivable days fell to 44.0 from 45.6, inventory days fell to 10.6 from 13.9, and operating working capital declined NZ$17.0m. So part of the OCF uplift is balance-sheet-assisted rather than purely earnings-driven.

Pre-lease FCF of NZ$78.0m is within the supplied historical range (mean NZ$59.6m). FCF/NPAT of 390% reflects the small NPAT denominator rather than unusual cash strength. Total assets of NZ$9.9b are above Annolyse's historical baseline (4-period mean NZ$6.9b), consistent with the multi-year build phase, and the 35% capex step-up suggests the asset base will continue to expand. Combined with continued borrowings growth, the deleveraging signal rests on EBITDAF holding at this elevated margin.

This briefing cannot assess hydrology, hedge-position and forward generation drivers because the disclosed excerpts and calculation pass do not quantify them.