Contact Energy expects future energy demand to remain weak despite any gradual recovery in the economy.
Looking at the past five years, and the past year in particular, chief executive Dennis Barnes said the usual correlation between higher GDP and an increase in energy use does not appear to be happening.
He said on Tuesday that tepid demand and excess generation are driving competition and pushing margins down but lower costs should ease the resulting pressure on the company's margins.
Demand is such, Mr Barnes said, that he cannot see the need for a large new power generating station in the next ten years.
And while the company is keeping a watch on negotiations between Rio Tinto and Meridian on a future energy supply contract for the Tiwai Point aluminium smelter, he said it would not be fatal if the two sides failed to reach an agreement.
Contact's half-year profit rose 29% to $88 million for the six months to December 2012 compared with the same period a year ago.
Underlying profit rose 21% to $92 million, boosted by lower generation costs from using cheaper hydro power rather than gas.
Contact's stock rose 16 cents to $5.24 on news of the profit figure.
