NZ's Contact Energy sees return to profit growth

WELLINGTON, Oct 22 - New Zealand's largest listed power company, Contact Energy Ltd <CEN.NZ>, forecast a return to profit growth this year, saying conditions had picked up since dry weather and transmission problems hurt last year's profit.

Contact gave no specific forecast but referred instead to market forecasts, which on average predict net profit of NZ$181 million ($137 million) in the year to June 2010, or NZ$174 million before exceptional items.

"We're comfortable with analysts' expectations of an improvement in full-year profit," Chairman Grant King told the company's annual meeting on Thursday.

Contact, which mainly generates power from hydro lakes and supplies about a quarter of New Zealand's electricity, reported a halving of its net profit to NZ$117.5 million ($155 million) for the year to June 2009, mainly because of dry weather and problems in shifting power from one end of the country to the other.

Shares in Contact, 51.2 percent owned by Australia's Origin Energy Ltd. <ORG.AX>, last traded down 1.1 percent at NZ$6.20, in a broader market <.NZ50> down 0.7 percent.

The company said its programme of investment, including a gas-fired peaking plant and a gas-storage facility to help it cope better with adverse market conditions.

Contact operates nine power stations and has around 600,000 electricity and gas customers. It competes against TrustPower Ltd <TPW.NZ> and three state-owned companies Meridian Energy, Genesis Power, and Mighty River Power. (NZ$1=$1.47)