Contact caned

By Nick Stride

Friday 3rd May 2002

Contact Energy's March first-half bottom profit fell 16% to $30 million but the company was ahead after accounting for one-off items.

Profit before unusuals was up 55% to $40.3 million, while earnings before interest, tax, depreciation and amortisation were down by $5 million to $116 million.

Chief executive Steve Barrett said the electricity market had been soft in the first half.

Rainfall in November and December had boosted hydro lake levels above their mean for that time of year but levels were now back below the mean.

Growth in customers and retail sales were offset partly by lower gas and wholesale electricity revenues.

Total electricity and gas customers at March 31 were 520,000, up from 494,000 a year ago.

The company has put on hold plans to build a 400 megawatt gas-fired power plant at its Otahuhu site.

Mr Barrett said a number of uncertainties had to be resolved before Contact could be confident the project would deliver an appropriate return on capital.

These included market reforms, gas supply, resource consents, and the transmission regime.

Mr Barrett said gas supply and regulatory issues were of particular concern.

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