Meridian Energy says hydro levels remain high and it has recovered from a record dry year.
Despite sharp rises in transmission costs and 27 days of high voltage outages, profit for the six months to end of December 2012 jumped from $9 million the previous year to $173 million.
After one-off items are stripped out, underlying profit fell by 11% to $88 million. Earnings fell 6% to $277 million.
Chief executive Mark Binns said inflows into South Island catchments are higher and efficiencies have been made in retail business.
Lake Pukaki, the largest storage lake, is at 93% of capacity - 109% above average at this time of year - and having so much water puts the company in a strong trading position.
Mr Binns said the company will also start seeing the benefits of the transmission upgrade which, by allowing a higher flow of energy between the islands, will make New Zealand basically one energy market.
Meanwhile, negotiations on an energy supply contract between Meridian and the owners of Tiwai Point aluminium smelter which started last July, are continuing.
Mr Binns would not predict what the outcome will be or the timeframe, but said it is a complex deal with big amounts of money at stake and negotiations were continuing in good faith from both sides.
The company has no big projects planned for the next five years.
Mr Binns also said the company is looking at selling its half stake in Macarthur windfarm in Australia, which cost $A500 million.