Contact Energy profit beats forecasts
Contact Energy's profit has jumped 24 per cent thanks to stable customer numbers and the take up of falling hydro lake generation levels by the firm's thermal power stations.
The country's biggest listed electricity firm today reported a net profit of $190 million for the 12 months to June 30, about $40m higher than a year ago. That beat a $163.3m earnings forecast by brokerage Forsyth Barr, and a consensus estimate of $170.9m.
Earnings before interest, tax, depreciation, amortisation and fair value changes rose 15 per cent to $509m and revenue rose 22.3 per cent to $2.7 billion.
"The second half of FY12 was characterised by low hydrology and our thermal assets, including the Stratford peaker plant, were drawn on as lower hydro generation was replaced with thermal generation," said chief executive Dennis Barnes.
Stratford hit its full generation capacity of 356 gigawatts in the second half of the financial year, while its Ahuroa gas storage facility saw increased demand from thermal electricity plants.
Barnes said that while the firm benefited from higher wholesale electricity prices in the period, it was offset to some degree by the higher thermal generation costs compared to its hydro facilities, where capacity had fallen by 25 per cent.
Helping stabilise earnings, Contact said customer numbers held at about the same level as the previous year despite high levels of churn in the market.
Furthermore, Contact met its gas take-or-pay commitments for the 2012 calendar year without incurring any excess costs, resulting in a $24m improvement on the previous period.
Contact said its 166 megawatt Te Mihi power station is due to be completed next year, which will end its current investment programme.
Contact shares rose 1 per cent to $4.90, largely unchanged on a year ago. The stock is rated as "buy" according to a Reuters poll of nine equity analysts.
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