14 Aug 2012

Contact Energy's profit up

6:57 pm on 14 August 2012

Contact Energy's full year profit is up more than a quarter, due to an increase in thermal generation which offset lower output from its hydro lakes.

The company made $190 million for the year to the end of June, an increase of 27% compared with the previous year.

Excluding unrealised accounting changes and one-off items, Contact's underlying profit rose 17% to $176 million.

The low hydro inflows that marred Meridian's result did not hinder Contact.

Contact's gas and thermal power stations made up for poor hydro generation, with the company drawing on its Ahuroa gas storage facility and Stratford peaker plant to meet demand.

Higher wholesale prices lifted income, though generating more expensive thermal power pushed up costs.

Contact says electricity customer numbers fell slightly flat at 443,000 , while margins contracted due to discounting to keep and attract households.

Looking ahead, the company aims to lure customers in areas where it generates most of its power, 71% of which is in the North Island, and completing its Te Mihi geothermal power station.