First there was not enough water in the South Island, then too much, pushing down wholesale prices.
Contact Energy's profit is forecast by one analyst to slide 54 per cent when it reports its full year-results on Friday.
The country's biggest listed power company has already warned of a grim result and Forsyth Barr's Andrew Harvey-Green said positives from an "extremely tough" year were limited. He forecasts
net profit of $109 million, down from $237 million in the 2008 financial year. Earnings are expected to be down 18 per cent at $454 million.
But there may be better news delivered on Friday.
"We expect the main positives to come from forecast/guidance information. In particular we expect Contact Energy to reduce its capital expenditure forecasts in light of the stronger New Zealand dollar."
The company has more than $500 million of construction projects under way, including the first phase of the Tauhara geothermal power project near Taupo, construction of the 200 megawatt Stratford gas-fired peaking station and an underground natural gas storage facility at nearby Ahuroa.
Harvey-Green said another positive was strong margins for LPG sales.
However, Contact had been hit by extreme hydro generation conditions. First there was a shortage of water in the South Island for the first two months of the financial year at a time when North Island generation was unable to make up the shortfall. For the past eight months too much water has pushed down wholesale prices which have been exacerbated by the constrained HVDC link.
The company had also suffered from fallout from the decision to put up the pool of directors' fees at the same time as increasing power prices.
Harvey-Green said this had seen customer numbers fall about 7.5 per cent to around 480,000. Gas prices rising faster than expected and low generation due to outages at its gas-fired stations had also hurt the company.
"However, over the past month there has been a turnaround in the short term issues that caused the result and signs normality is returning to the wholesale market."
Grant Williamson, of Hamilton Hindin Greene, said the share price had enjoyed a good run, climbing almost $1 in the past month. Given Contact's problems were well documented, the most interest on Friday would be in guidance for the current year, particularly on what was being done to win back customers, he said.
Contact closed down 1c yesterday at $6.49.
