Ann: FLLYR: CEN: Contact Energy Limited 2013 Full

• Release Date: 20/08/13 10:30
• Summary: FLLYR: CEN: Contact Energy Limited 2013 Full Year Results
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CEN
20/08/2013 08:30
FLLYR

REL: 0830 HRS Contact Energy Limited

FLLYR: CEN: Contact Energy Limited 2013 Full Year Results

CONTACT ENERGY 2013 FULL YEAR RESULTS

Name of Listed Issuer: Contact Energy Limited

For the year ended: 30 June 2013

This report has been prepared in a manner which complies with generally
accepted accounting practice and gives a true and fair view of the matters to
which the report relates and is based on audited accounts.

CONSOLIDATED INCOME STATEMENT

Current Full Year NZ$m; Up/Down %; Previous Corresponding Full Year NZ$m

EBITDAF (Earnings before net interest expense, tax, depreciation,
amortisation, change in fair value of financial instruments and other
significant items) $541m; up 6.3%; $509m

PROFIT FOR THE FULL YEAR: $199m; up 4.7%; $190m

EARNINGS PER SHARE: 27.2 CPS; up 1.1%; 26.9 CPS

UNDERLYING EARNINGS AFTER TAX (excludes significant items that do not reflect
the ongoing performance of the Group - non-statutory measure) $202m; up
14.8%; $176m

UNDERLYING EARNINGS PER SHARE: 27.7 CPS; up 10.8%; 25.0 CPS

FINAL DISTRIBUTION*: 14.0 CPS
* In the form of a cash dividend

Record date: 4/09/2013

Dividend Payment Date: 16/09/2013

MEDIA RELEASE

Tuesday 20 August 2013

Diverse asset and fuel position and a focus on efficiency lift results

Overview of results

Contact's performance for the year has been characterised by the continued
reduction in energy procurement costs and a focus on retail operating
performance in what remains an oversupplied and highly competitive market.
Chief Executive Dennis Barnes says "the result shows the benefits of our
five-year multi-billion dollar investment in the flexibility of our
generation portfolio to reduce its reliance on large volumes of contracted
gas. These assets have meant Contact has been able to perform and respond to
a range of market conditions".

Contact reported profit after tax for the year to 30 June 2013 of $199
million, up $9 million (5 per cent) compared with the prior year (FY12).
Earnings before net interest expense, tax, depreciation, amortisation, change
in fair value of financial instruments and other significant items (EBITDAF)
were $541 million, $32 million (6 per cent) higher than FY12. Underlying
earnings after tax  (profit for the period adjusted for significant items
that do not reflect the ongoing performance of the Group) were $202 million,
$26 million (15 per cent) above FY12.

The Contact Energy Board of Directors resolved that the final distribution to
shareholders would be increased by two cents per share to the equivalent of
14 cents per share, resulting in a full year dividend of 25 cents per share.
The distribution represents a payout ratio of 91 per cent of Contact's
underlying earnings after tax.

"Our results reflect the progress we are making in all aspects of the
business. A 31 per cent reduction in the total recordable injury frequency
rate is a result I am proud of and one which makes me believe that we can
achieve our aspiration of zero harm.

Our focus on remaining competitive in the retail market has seen sales remain
stable as we approach the 'go-live' of our retail transformation programme at
the end of 2013.

The past two years have demonstrated the value of investments in the
generation portfolio which have enabled us to deliver consistent profits
during a range of hydrology sequences, transmission constraints and plant
outages. We also expect the completion of transmission network upgrades,
including the additional HVDC link between the North Island and South Island,
and the reduction in gas take-or-pay commitments will further increase
flexibility, particularly during wet sequences. The completion of the Te Mihi
geothermal power station will provide Contact Energy with additional lower
cost generation," Mr Barnes said

Capital expenditure programme delivery continues

Construction and commissioning of Contact's Te Mihi power station continues
with all non-power station activity to support the Wairakei investment
programme completed. Commissioning is well advanced, with first power to the
grid expected in the next few months.

The retail transformation programme, which is focused on upgrading Contact's
aging customer billing and service systems, is now in an intensive phase of
testing and remains on schedule to 'go-live' at the end of 2013.

Following a thorough review of the economic, market and regulatory
conditions, Contact has reprioritised its wind power development portfolio.
Contact has decided to exit the Hau?uru m? raki wind generation development
on the Waikato coast and will not proceed in the foreseeable future with the
Waitahora wind generation development project near Dannevirke in the Tararua
district. "The development of large projects, such as power stations, is a
lengthy and capital intensive process. While it is disappointing that we have
not been able to develop these resources, the current supply and demand
outlook and the competitiveness of the Tauhara geothermal development means
it would be imprudent to continue to hold the full value of these assets,"
said Mr Barnes.

Right size and shape for the market

During the year Contact made important steps in restructuring the business to
ensure the right organisation structure is in place to remain competitive in
the market. We are targeting to absorb increasing cost pressures through
sustainable reductions in employee numbers, procurement savings and IT
rationalisation.

Looking forward

In the 2014 financial year, Contact will continue its progress in
transitioning from a company focused on asset development to delivery of
value to customers, utilising its diverse and flexible assets to reduce
energy procurement costs, and relentlessly driving towards zero harm.

"The 2014 financial year will see us provide additional lower cost generation
with the completion of the Te Mihi power station and the retail
transformation programme will enable Contact to engage with customers in new
ways and offer products and solutions that meet their needs. As the 'go-live'
date approaches, our focus is increasingly moving to how we can utilise our
world class system to deliver competitive capability.

Contact has a flexible and diverse asset base that provides confidence in the
ability to manage market volatility and deliver value to shareholders. The
investments in gas storage and flexible generation, coupled with the
reduction in gas purchase obligations, have enabled Contact to better manage
and respond to the inherent volatility of hydro generation output in New
Zealand.  This improved capability, along with the recently completed upgrade
of the national transmission system, is expected to reduce the hydrology risk
in Contact's earnings in coming years," said Mr Barnes.

ENDS

Media enquiries: Nicholas Robinson 027 705 3831

Investor enquiries: Fraser Gardiner 021 228 3688
End CA:00239886 For:CEN    Type:FLLYR      Time:2013-08-20 08:30:06