State-owned power company Genesis Energy said its net profit came to $19.7 million in the first half to December 31, down 72 per cent against the previous comparable period, driven by the low wholesale electricity prices that resulted from high hydro storage levels last year.

Genesis, which is soon to be partly privatised under the Government's mixed ownership model, said there had been a $12.7 million "negative swing'' in the fair value its derivatives and a $14.2 million increase in depreciation.

The company declared an interim dividend payable to the Government of $64m, up from $57m in the first half of the previous financial year.

See Genesis' Financial presentation here.


Genesis, which is New Zealand's biggest retailer of electricity and gas, said it had experienced growth in retail electricity and gas volumes in the six months to December 31 but not enough to offset the impact of reduced wholesale electricity which was a result of above average hydro storage levels, higher temperatures and reduced consumer demand.

The six-month period was also characterised by increased competiton in the retail market, and year-on-year increases in Huntly Unit 5 generation and Kupe production volumes.

Genesis chairman Dame Jenny Shipley said while external operating conditions were challenging, the company was able to benefit from its strong retail market presence and its investment in the Kupe oil and gas field.

She said the company had held its market share in electricity and gas retailing, despite intense competition, particularly from smaller retailers, and had grown customer accounts by two per cent.