20 Aug 2013

Rise in profit at Contact Energy

11:30 am on 20 August 2013

Contact Energy has reported a rise in profit for its full year after it continued to reduce the cost of buying energy and worked hard at keeping retail customers.

After-tax profit rose 5% to $199 million in the 12 months to the end of June.

Contact Energy said there's more electricity than demand which makes the market highly competitive.

It said its investment in the flexibility of its generation portfolio, reducing its reliance on large volumes of contracted gas, has been beneficial and is reflected in the result.

When one-off items are stripped out, underlying profit rose 15% to $202 million.

The company said completion of the Te Mihi geothermal power station this year will provide it with additional lower-cost generation.

During the year, customer numbers declined 1% to 435,500 and retail sales dropped 3%.

Contact said customer turnover is intense with the industry continuing to average 30,000 switches per month.

Meanwhile, commercial and industrial sales volumes increased 3% and company re-sign rates remained strong.

Contact, which generates about a quarter of New Zealand's electricity and is 51% owned by Origin Energy of Australia, declared a final dividend of 14 cents per share, up from 12 cents last year.