Mercury NZ Shares Jump 4% in Thin ASX Trading as Investors Back Renewable Generator's Wind-Powered Growth

SYDNEY — Mercury NZ shares rose 4.1% on the Australian Securities Exchange on Thursday. Trading was very light, as investors focused on the New Zealand renewable power company's growing wind business.

The stock gained 22 Australian cents to close at A$5.58, the highest level of the session. Only 764 shares changed hands on the ASX, a tiny amount compared with typical activity on the New Zealand stock exchange, where Mercury has its main listing.

That low volume means small trades can cause large price swings on the ASX.

Mercury did not release any price-sensitive news Thursday. The broader S&P/ASX 200 fell 0.43%, but defensive sectors such as utilities and real estate held up better than mining and energy stocks.

Strong quarter despite dry conditions

Mercury, one of New Zealand's four largest power companies, generates all of its electricity from renewable sources, including hydro, geothermal and wind.

Last week, it reported strong results for the first quarter of fiscal 2027, the three months ending Sept. 30. Its trading margin, which measures revenue from electricity sales after energy costs, rose 19% from a year earlier to NZ$445 million.

The result came despite very dry conditions. Rainfall in the company's Waikato River hydro catchment was at the 2nd percentile, among the lowest on record, compared with the 71st percentile a year earlier.

Hydro generation fell 332 gigawatt-hours, or 24%. But new wind and geothermal projects added 307 gigawatt-hours, more than making up for the shortfall. Total generation rose slightly to 2,526 gigawatt-hours.

Wind projects expand

Mercury's Kaiwera Downs Stage 2 wind farm in Southland reached full generation during the quarter. The NZ$486 million project added 36 turbines and 155 megawatts of capacity.

All 12 turbines are now installed at its Kaiwaikawe wind farm in Northland. In August, Mercury approved the NZ$506 million Puke Kapo Hau wind project.

Analysts say the company's investment in wind and geothermal power has made it less dependent on rainfall. In the past, a quarter this dry could have hurt earnings.

Guidance confirmed

Mercury said it remains on track to meet its fiscal 2027 EBITDAF guidance of NZ$1.075 billion, roughly the same as last year. It expects to pay dividends of 29 New Zealand cents per share. The forecast assumes 4.1 terawatt-hours of hydro generation, and the company warned that weather could affect results.

In fiscal 2026, Mercury generated NZ$762 million in operating cash flow and invested NZ$710 million, or 66% of EBITDAF, in new and existing renewable projects.

Share performance

Despite Thursday's gain, the ASX-listed shares are down about 4% over the past year. On the NZX, where most trading happens, the shares closed at NZ$6.70 last week, about 6% below their 52-week high. The company's market value is about NZ$9.6 billion.

What to watch

Investors will watch hydro storage levels, wholesale electricity prices and progress on new wind projects.

Political and regulatory issues also matter. New Zealand has been debating how its electricity market works after a period of high prices during dry years.

Because ASX trading in Mercury is so light, the NZX is a better guide to the stock's overall direction.