Contact on line to deliver another big profit result

Contact Energy looks set to announce another big rise in profits when it reports its first-half result on Friday.

In February, the energy generator and retailer reported a 50 per cent rise in net profit after tax of $41.3 million for the December quarter.

Forsyth Barr analyst Greg Main expected "more of the same" and estimated Contact's March half-year figure would be about $83 million.

Last year, the March half-year figure was $55.3 million, with $27.5 million for the first quarter.

Main said the March quarter was typically the seasonal low point for Contact because of reduced power demand over the summer holidays.

However, spot prices had bounced back later in the quarter.

A Wellington broker said he expected Contact to turn in a March quarter after-tax profit of about $30 million, with a dividend of 7c a share. Earnings before interest and tax would be quite flat at about $70 million, he said.

Contact earlier this year quashed any immediate hope of a capital return to shareholders, instead saying it planned to spend $130 million on new generation projects this year to boost output from its existing power stations by 100 megawatts.

Main was not expecting Contact to deviate from that policy.

"They've got a number of investment decisions ahead of them first and until they clarify that it would probably be more prudent for them to just to sit where they are."

In November Contact - 51.2 per cent owned by Australia's Origin Energy - announced a net profit after tax of $144.04 million for the 12 months to September 30, up 22 per cent on the previous year.

- NZPA