The country's largest listed power company made $68 million in the six months to December, 19% percent less than in the same period a year earlier.
Underlying earnings, which strip out one-off items, fell 3% to $76 million. Sales rose 7% to $1.29 billion.
However, because of the dry weather, Contact had to boost low hydro generation volumes with more expensive thermal generation.
Competition for customers also intensified as a result of a Government-driven campaign to encourage households to shop around for the best deals.
Contact gained more than 4600 customers between September and December by offering a prompt payment discount for customers paying online.
And it says earnings will improve in the second half of the year as retail prices rise and wholesale electricity prices improve.
Contact's chief executive, Dennis Barnes, says tens of thousands switched to another provider following a government campaign to shop around.
''Competition will continue to be fierce, but we've shown ourselves to be able to respond to that.
''My expectation is that we will continue to grow our customer numbers and by the end of the financial year we'll be back where we a started at the beginning of the financial year and have reversed all of those declines,'' Mr Barnes says.