Contact Energy posted a 12 per cent gain in first-half underlying profit while holding its dividend unchanged and trimming capital expenditure in the face of weaker sales.
Underlying profit rose to $82 million in the six months ended December 31, from $73m a year earlier, the Wellington-based company said in a statement. Sales fell to $1.04 billion from $1.12b. Net income was $96m compared with a loss of $116m a year-earlier, which reflected impairments.
Sales were in line with a forecast from brokerage Forsyth Barr, which had expected normalised profit of $79m in a period of subdued electricity demand. National electricity demand declined by 2 per cent in the first half, which Contact said reflected reduced residential consumption and lower irrigation demand as warmer temperatures and above-average rainfall boosted hydro-electric generation.
It will pay a first-half dividend of 11 cents, in line with the year earlier. Expenses fell to $778m from $866m, while capex dropped 11 per cent to $63m. Its gearing ratio fell to 36 per cent from 37 per cent.
"Contact's strategy remains centred on optimising the customer and generation businesses to deliver strong cash flows which are ultimately for distribution to shareholders," Contact said. "We expect our operational improvement initiatives to continue to reduce our costs."
Contact shares last traded at $4.79 and have gained 15 per cent in the past 12 months.