Market Guidance Update

This announcement provides information related to earnings guidance for Manawa Energy (MNW) in relation to the FY23 and FY24 financial years. FY23 guidance o MNW expects EBITDAF for the year to 31 March 2023 to be around the top end of the current EBITDAF guidance of $127.5m to $140.0m. This is due to strong Q4 trading conditions, driven by solid wholesale prices and generation volumes. o Capital expenditure guidance of $45m to $55m remains unchanged. FY24 guidance o MNW expects EBITDAF for the year to 31 March 2024 to be in the range of $120m to $140m. o This is underpinned by the following assumptions: o Wholesale prices remain materially in line with the current ASX forward curve; o MNW's generation volumes are approximately 1,915 gigawatt hours, including the volumes generated by KCE[1] schemes. Note that this is below the 'long-run average' of 1,942 gigawatt hours due to a weather-related outage at the Esk Scheme (Hawke's Bay) and a planned Waipori Scheme (Otago) outage over summer to replace the Waipori 3 generator and undertake maintenance works; o Average hydrological conditions; o Around $8m operational expenditure related to our new generation development pipeline; and o No material adverse events. o MNW expects its FY24 capital expenditure to be in the range of $65m-$80m. This comprises the following expenditure: o $18m-$22m for enhancements of existing generation assets; o $22m-$28m for asset maintenance and lifecycle expenditure on existing generation assets (including KCE assets); o $13m-$16m for new generation development activity; o $7m-$9m for technology, regulatory, environmental, and other capital investment; o ~$5m for the Manawa House office fit-out in Tauranga. o MNW also expects to receive $20m-$28m of cash proceeds in FY24 from the divestment of surplus land and carbon credits. Further information o To better compare MNW's financial performance between FY23 and FY24 on a like-for-like basis, three key "normalisations" are required: o FY23 is the final year MNW receives avoided cost of transmission revenue, and this is expected to provide ~$15m of EBITDAF (net of other transmission pricing methodology changes) in FY23. o FY23 includes April 2022 earnings from the mass market retail business (sold in May 2022), providing ~$4m of net EBITDAF. o FY23 included one month of internal transfer pricing for electricity to the mass market retail business prior to the commencement of the Mercury CFD[2]. This provided ~$3m of EBITDAF upside. o The following items are expected to drive a net increase in the FY24 EBITDAF result. o The energy outlook in FY24 is expected to be favourable compared to FY23, driven by current price and volume assumptions, and changes to our hedge position (increases EBITDAF by $10m to $20m). o Generation operational costs increase primarily as a result of abnormally high project expenditure including a significant dam safety project (reduces EBITDAF by $1m to $3m). o New generation development operating costs increase due to additional resource and increased consenting costs and other activities expected to be undertaken in FY24 (reduces EBITDAF by $2m to $4m). MNW management will provide a full update on asset enhancements, the new development pipeline, and other key business initiatives at the company's full year results announcement in May 2022. -ends- Investor enquiries: Phil Wiltshire GM Corporate Services Ph 027 582 6600 investor.relations@manawaenergy.co.nz Media enquiries: Paul Ford Head of Corporate Relations Ph 021 809 589 comms@manawaenergy.co.nz End CA:00409260 For:MNW Type:MKTUPDTE Time:2023-03-31 08:30:46