Continuous disclosure

It wasn't quite a profit warning, but Contact Energy shareholders were this week cautioned that the past few years of soaring profit growth may be over. And so the share price of one of New Zealand's most popular listed companies started moving downhill.

Contact is moving into a tougher business scene, largely because of the higher cost of natural gas, which the energy company uses to fire its power stations. Cheap Maui gas is running down, so its stations will soon be powered with gas from smaller, more expensive fields.

Contact is also talking up the prospects of importing gas in the form of liquefied natural gas (LNG).

With a market capitalisation of more than $4 billion, Contact is the second-biggest company listed on the NZX. Privatised in 1999, it is one of New Zealand's most widely held stocks, with 95,000 shareholders.

New chief executive David Hunt took over this month, replacing Steve Barrett, who was a representative of former 51 per cent shareholder Edison Mission. Edison sold its stake in Contact last year to Australian energy giant Origin.

Since Contact is looking for new supplies of gas, Origin may not be such a bad owner to have, since it is heavily involved in the "upstream" oil and gas exploration and production sector.

Company chairman Grant King told shareholders at the annual meeting in Auckland on Wednesday that performance over recent years had been marked by strong earnings growth thanks to rising energy prices. "Contact expects this dynamic to support continued earnings growth this financial year, albeit with some flattening off in momentum," he said.

Contact shares hit a high of $8 each in early July, rising from a six-month low of $6.81 in May.

The company's dampening-down of shareholder expectations at the Auckland meeting sent its share price down 9c.

The next day things weren't much better, with the price declining again - this time 26c. Yesterday it recovered 14c to $7.16.