Contact Energy's net profit was down 7.2 percent for the six months ended December 2024 when compared to a year earlier. Photo: RNZ / Nate McKinnon
Contact Energy has reported a drop in first half net profit while making progress on its renewable energy developments.
The large diversified energy company said the first half net profit was down on market-making and fair value movements in unhedged electricity contacts costing $21 million, with improved revenue and underlying profit.
Key numbers for the six months ended December 2024 compared with a year earlier:
- Net profit $142.4m vs $153.5m down 7.2 percent
- Revenue $1.71b vs $1.21b up 31 percent
- Underlying profit $404m vs $362m up 12 percent
- Interim dividend 16 cents a share vs 14 cps up 14 percent
Chief executive Mike Fuge said the improved underlying profit was driven by increased geothermal generation with Tauhara online, improved channel pricing from the commencement of long-term contracts and elevated contracts in support of short-term supply conditions.
However, he said gains were partially offset by higher gas and acquired generation costs, losses on sale of excess gas and one-off costs of $10m associated with the proposed acquisition of Manawa.
Fuge said Contact remained confident its takeover offer for Manawa would happen, despite the Commerce Commission's initial pushback.
"We remain very confident at all levels," he said, adding that Manawa's profit warning demonstrated the vulnerabilities of a small generator with a single fuel source.
"It just brings further grist to the mill. For Contact Energy shareholders, it's still a good deal and for the New Zealand consumer it's still a great deal."
Fuge said the next six months would see Contact preparing for its proposed combination with Manawa while continuing to deliver key milestones under its strategy to lead the decarbonisation of New Zealand.
"We will continue to deliver the new renewable electricity projects and innovative supply arrangements that are needed to support the energy transition in New Zealand.
"We have a strong track record in both regards and an experienced team standing ready to deliver. This is all underpinned by the strong performance of our underlying business, a range of capital options available and the ongoing support of our shareholders."
The company expected to report an improved full year underlying profit of $790m, an increase of $20m on its previous guidance.
First half highlights
- Entered scheme of arrangement for the proposed acquisition of Manawa Energy.
- New long-term agreement to supply electricity to Fonterra, supporting electrification.
- Final commissioning activities completed on 174-megawatt (MW) Tauhara geothermal station.
- Te Huka 3 geothermal station online December 2024. Final commissioning underway.
- Construction started on 100MW Glenbrook battery and Kōwhai Park solar farm.
- Confirmed investment in Wairakei extension and Te Mihi Stage 2 geothermal projects.
- Supported the market in winter 2024 by securing Methanex gas and running Taranaki Combined Cycle
