It’s Groundhog Day for Contact Energy, which posted its interim half year result this morning, with identical earnings to the previous corresponding period of $225 million (ebitdaf).
As a result there was no change for underlying earnings after tax for the six months to December 31, 2009, which were $80.1 million.
The company will hold the interim dividend distribution for the its first half at the equivalent of 11c a share.
While the significant numbers were the same, managing director David Baldwin said challenging conditions posed by high hydro inflows resulted in low wholesale prices.
Those, combined with a lack of operational flexibility, led to an “unsurprising” result.
Extreme weather and transmission constraints, which negatively impacted Contact’s performance by $40 million in the late winder of 2008, did not reoccur.
However, the company’s operating costs in the six months to December were higher by about $40 million, due to higher costs of gas-fired electricity generation.
An unchanged interim dividend of 11c per share is to be paid.
Mr Baldwin said Contact's financial performance for the second half of the current financial year would depend on various factors including hydrology, wholesale prices and the extent to which higher operating costs could be reflected in retail prices.
Retail competition remained intense and Contact would be faced with a further increase in gas costs in the second half of the financial year as there was a major step up in gas price in one of its major contracts, Mr Baldwin said.
So there were a range of possible outcomes for the full year as a result of continued volatility in the retail and wholesale markets.
Based on current conditions, Contact was not uncomfortable with current market consensus estimates for the current financial year.
Contact Energy's share price this morning was $5.80 (NZX:CEN)
Tue, 23 Feb 2010