Profit jumps for Contact Energy

  • 17/08/2014

By Pattrick Smellie

The stars aligned for Contact Energy in the year to June 30, producing a 17.6 percent increase in net profit of $234 million.

Shareholders will get a second dividend increase in two years, as a new geothermal power station came on stream and the upgraded Cook Strait cable allowed its South Island hydro-electricity catchments to be maximised.

The profit includes a $43m payment from the contractors who built its new Te Mihi geothermal power station,which was late to be commissioned, and reflects greater production of lower cost hydro-electricity.

Stripped of that one-off factor, net profit rose 12.4 percent to $227m, although the company expects the revenue covered by the compensation payment to show up in operating revenue in the current financial year.

Earnings before interest, tax, depreciation, amortisation and changes in the value of financial instruments were up 9 percent to $587m.

The final dividend will rise by 1 cent to 15 cents per share, raising total distributions for the year to 26 cents per share.

The result was earned on revenues of $2.446b, 3 percent lower than in the previous financial year, reflecting weak demand, partly caused by warm winter weather, and ongoing competition for customers.

Despite weak ongoing electricity demand, the result reflects Contact's completion of a multi-year $2b series of new plant builds, including a gas-fired peaker station at Stratford, as well as Te Mihi, and upgrades at other geothermal stations.

Generation from its two combined cycle gas turbine units, once the powerhouse of the Contact fleet, fell by around a third while hydro generation was 14 percent higher.

NZN

source: newshub archive


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