Genesis Energy : Half Yearly Report and Accounts

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Interim Report 2022

G E N E S I S E N E R G Y L I M I T E D

Chairman and Chief Executive's joint letter

Pukapuka Mai I te Heamana me te Manahautū

Tēnā koutou,

Genesis continued to move at pace in the first half of the 2021-22 financial year with ongoing investment in the transformation of the business and new renewable generation, while

at the same time delivering another solid financial performance.

The flexibility of our generation assets, the Waipipi wind farm being fully operational and growth in retail netbacks were among important contributors to the result. EBITDAF was $210.3m, NPAT was up 63% to $84.7m and gross margin was up 1% to $354.6m. The board approved an interim dividend of 8.7 cents per share and the reintroduction of the Dividend Reinvestment Plan at 2.5% discount.

After five years of planning, design and manufacture, work started on stage two of a challenging upgrade of our Tekapo B power station that will future-proof it for decades. The $15m+ project will see the station deliver its 800 GWh of annual generation by using up to 12,000 less litres of water per second.

The project will deliver operational flexibility along with reduced running limitations and annual maintenance costs. The work follows the completion of a two-year $26.5m project to install a new intake gate at Tekapo A in FY21.

EBITDAF¹

$	m
HY21 $216.0m

NPAT2

$ m

HY21 $52.0m

1. EBITDAF: Earnings before net finance expense, income tax, depreciation, depletion, amortisation, impairment, fair value changes, and other gains and losses. Refer to the consolidated comprehensive income statement on page 6 for reconciliation from EBITDAF to net profit after tax.
2. Net Profit After Tax.

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Investing for the future

Our digital transformation continues and will create consistent and distinctive end-to-end customer experiences, allow us to scale new products and services at a greater pace, integrate with partners more efficiently, and reduce cost and risk through automated processes.

We also continue to invest in our assets to maximise their efficiency and output.

During the half, along with our Kupe joint venture partners Beach Energy and NZ Oil and Gas, a $72m projectat the gas production station near New Plymouth was completed.

It restored the plant's potential capacity of 77TJs per day, equivalent to approximately 15% of New Zealand's daily natural gas demand. The joint venture partners are now investigating the potential for drilling another development well to further increase recovery from the field. Kupe remains a high-quality gas asset and will continue to play a key role in New Zealand's transition to a lower carbon future.

Marc England	Barbara Chapman CNZM
C H I E F E X E C U T I V E	C H A I R

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On the North Island's East Coast, a $7.7m project is underway to overhaul two turbines at the Piripaua power station. It's expected to improve efficiency by 3.3%. Work on the first generator started in November and will run through till March. The second unit will be upgraded in FY23.

Empowering New Zealand's sustainable future

Playing our role in the country's transition to a low carbon future remains top of mind across the organisation. This includes building a sustainability framework to help us deliver our targets.

In November we launched a comprehensive Sustainable Finance Programme, recognising the company's commitment, leadership and investment in mitigating climate change and sustainability more broadly. The programme includes a new Sustainable Finance Framework, designating an existing NZX listed bond (GNE030) as a Green Bond and a $100m loan linked to achieving our sustainability targets. The targets acknowledge the broad reach of sustainability, and include reductions across all scopes of emissions, ramp up renewable energy generation goals, and a future of work programme. As per the terms of sustainable linked loans, Genesis will pay a lower interest rate on the loan for achieving its goals but will have to pay higher interest if it falls short of its commitments. During December 2021, Genesis converted a further $150m of its funding facilities to a sustainability linked loan structure.

Continuing to execute our Future-genstrategyat pace, we also confirmed FRV Australia as our joint venture partner for the development of grid-scale solar. FRV Australiais a leading developer of utility-scale solar farms and will bring its expertise in developing these around the world to work with Genesis in delivering up to 500MW of solar capacity over the next five years. This will generate about 750GWh pa - enough to power 100,000 households or 185,000 EVs per year. Genesis will hold a 60% stake in the joint venture, which will add to our generation portfolio of hydro, wind, geothermal and thermal

sources of energy. Locations for the solar developments will be mainly in the North Island with a focus on existing transmission connection points.

Helping customers reduce their emissions

Empowering New Zealand's sustainable future includes providing tools and insights to help customers understand and take action on their own carbon footprint. Reducing transport emissions is a focus for the country, and we've developed some unique offerings for electric vehicle owners. More than 1,000 customers have taken up our EV Planover recent months, and we've developed a portal on our Energy IQplatform where they can access data on their usage and find the most cost-effective and emissions-friendly times to charge. Among those on the plan so far, we've seen 7% moving their household usage from day to night.

EV Sync can automate the best times for charging

We also partnered with Christchurch based company Evnexto develop and trial new EV smart charging technology. Evnex has been at the forefront of developing chargers since 2014 and now has a market-leading smart charger that can safely reduce overnight charging to a few hours. The smart charger can also 'talk' to electricity lines companies to balance load and help smooth demand on the grid. Genesis, through in-house software development, has added EV Sync, an intelligent feature that connects the smart chargers to the Energy IQ app so customers can schedule and automate the best times to charge.

Genesis is using the Evnex smart chargers in a pilot with EV car sharing company Zilchfor one of their large corporate clients. It includes the installation of chargers in employee homes as a cost-effective alternative to workplace charging, with the

added benefit that the power used can be measured separately from the rest of the house and sent directly to the company for reporting and reimbursement.

We have also seen strong growth among commercial and industrial customers wanting to understand their energy use as the first step toward decarbonising their business. Now, more than 25% of these customers

• with 5% growth in the half - are purchasing decarbonisation services from us. A key driver in the uptake of these differentiating products has come from restructuring the supply of our Energy Insights monitoring product. We moved from a third-party leasing arrangement to developing our own sensors at the start of this financial year, and now operate more than 1,000 at clients' premises.

Launching Frank*Energy

We also rebranded Energy Online to Frank*Energyto reflect a new direction, offering and attitude that it will bring to the market. Challenger retail brands have grown 40% over the last four years and Frank*Energy offers a simplified customer proposition and business model to keep prices low with digital sign up, service and automation to drive lower cost to acquire and serve. There are no contracts, no preferential deals with the same plans available for new and existing customers. Frank*Energy starts with a base of 90,000 customers and offers electricity, gas and LPG. Customers can sign up, manage their usage, pay bills and place orders for LPG through the Frank app and online. While owned by Genesis, Frank*Energy, will operate autonomously.

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The role of Huntly

Huntly's role in supporting the market through the dry year of 2021 underlined its strategic importance to New Zealand. This was also borne out in independent analysis of the market that we commissioned looking at four different market scenarios through to 2030. In all scenarios, New Zealand is on track to achieve 96% - 98% renewable electricity by 2030 with some thermal generation expected to be needed to maintain a reliable electricity system when renewable energy is low.

Emissions from Huntly will decrease sharply throughout this decade. We believe we have reached peak coal use and are looking at alternative fuel options for the Rankines, such as biomass. Broadly speaking, there are three aspects to the work - sourcing the right type of biomass, ensuring there is a reliable supply, and understanding the changes that will need to be made to the Rankine units. There is a lot to learn in each of these areas. We are hopeful a biomass trial will be possible in the coming months, and, if successful, we'll assess the fuel's commercial viability.

We believe that Huntly is a viable alternative to the Lake Onslow pumped hydro project. It's ideally located for major electricity generation, close to demand, with high voltage connection, and has access to a good local workforce. Transitioning the Rankines to biomass strengthens the case for Huntly to continue as the country's electricity back-up.

Coping with Covid

Covid-19 has proven to be a marathon rather than a sprint for the country. We're very proud of how our staff have adapted to fluctuating alert levels and varied restrictions to continue supporting our customers and keeping our sites operational.

At all times, our priority has been the safety of our people and we have proactively looked at trends and developments around the world. In August we introduced saliva testingat Huntly to provide assurance our staff and the plant could operate safely.

Saliva testing at Huntly

We also joined other businesses in November calling on the Government to allow us to import rapid antigen tests as another layer of protection for staff and help ensure workplace continuity. The Government agreed and we secured more than 50,000 tests that are being deployed across our business. Each staff member has been provided with rapid antigen testing kits and training. To enter any of our premises, staff need to complete a negative test twice a week and upload the result to an internal app. The feedback from staff was overwhelmingly positive and our people have completed more than 15,500 rapid antigen tests to date.

Looking ahead

Dealing with Covid-19 remains a key priority but will not slow the pace of our transformation.

The sector is waiting for the Government to deliver a national energy strategy later this year that we hope will provide a detailed framework for how the country will achieve a lower carbon future. We would like to see a clearly defined long-term national energy strategy with a strong commitment to a more renewable energy system supported by clear policies developed in collaboration with business. We believe a focus on carbon intensive areas such as process heat and transport should be a priority, recognising the opportunity for electricity to support a lower carbon Aotearoa.

We enter the next phase of our growth with four new executives and a gender balanced executive team. Three of the appointments are internal promotions highlighting the strong professional development programme within the business to foster growth and succession. Peter Kennedy was appointed Chief Digital

Officer in January while Rebecca Larking and Pauline Martin will transition to their respective new roles, Chief Operations Officer and Chief Trading Officer, by mid-April. We're also pleased to welcome James Spence as Chief Financial Officer.

We should all be mindful of NIWA's warningabout La Nina weather patterns for the next few months, but the sector is in better shape heading toward autumn and winter than a year ago. The lakes are fuller, we have reliable supplies of gas, and the Waipipi wind farm is now fully operational. There is also sufficient coal to back-up the system, if the country needs it.

Above all, after more than 100 days of lockdown, our thanks go to all our people who adjusted superbly to the challenges and continued to deliver strongly for our customers and shareholders, helping Genesis to continue to empower New Zealand's sustainable future.

Ngā mihi,

Barbara Chapman

Chairman

Marc England

Chief Executive Officer

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Condensed Consolidated

Interim Financial Statements

Ngā Tauākī Pūtea Tōpū Whakarāpopoto Weherua

For the six months ended 31 December 2021

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Condensed consolidated interim financial statements

Consolidated comprehensive	6
income statement
Consolidated statement of	7
changes in equity
Consolidated balance sheet	8
Consolidated cash flow statement	9

Notes to

the condensed consolidated interim financial statements

General information and significant matters	1 0
A. Financial performance
A1. Underlying EBITDAF and underlying earnings	12
A2. Segment reporting	12
A3. Depreciation, depletion and amortisation	15
B. Operating assets
B1. Property, plant and equipment	15
B2. Oil and gas assets	16
C. Working Capital
C1. Receivables and prepayments	17
C2. Inventories	17
D. Funding
D1. Borrowings	18
D2. Finance expense	19
D3. Dividends	19
E. Risk management
E1. Derivatives	19
E2. Change in fair value of financial instruments	20
E3. Fair value measurement	2 0
F. Other
F1. Related party transactions	21
F2. Commitments	22
F3. Contingent assets and liabilities	22
F4. Arbitration decision in respect of a carbon liability dispute	22
F5. Subsequent events	22

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