Ann: HALFYR: CEN: Contact Energy Limited 2012 Hal

• Release Date: 21/02/12 10:30
• Summary: HALFYR: CEN: Contact Energy Limited 2012 Half Year Results
• Price Sensitive: No
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CEN
21/02/2012 08:30
HALFYR

REL: 0830 HRS Contact Energy Limited

HALFYR: CEN: Contact Energy Limited 2012 Half Year Results

CONTACT ENERGY 2012 HALF YEAR RESULTS

Name of Listed Issuer: Contact Energy Limited
For the period ended: 31 December 2011

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 unaudited accounts.

CONSOLIDATED INCOME STATEMENT

Current Half Year NZ$M; Up/Down %; Previous Corresponding Half Year NZ$M

EBITDAF (Earnings before net interest expense, income tax, depreciation,
amortisation, change in fair value of financial instruments and other
significant items) $230.9M; up 2.4%; $225.5M

UNDERLYING EARNINGS AFTER TAX (excludes significant items that do not reflect
the ongoing performance of the Group - non-statutory measure) $76.3M; down
3.1%; $78.8M

UNDERLYING EARNINGS PER SHARE: 10.89 CPS; down 14.4%; 12.72 CPS

PROFIT FOR THE HALF YEAR: $68.0M; down 18.7%; $83.7M
EARNINGS PER SHARE: 9.70 CPS; down 28.1%; 13.50 CPS

INTERIM DISTRIBUTION* 11.0 CPS
*In the form of a non-taxable bonus share issue pursuant to the Profit
Distribution Plan.

Record date: 06/03/2012
Non-taxable Bonus Share Allotment Date and Dividend Payment Date: 30/03/2012

MEDIA RELEASE

21 February 2012

Despite hydro volumes, solid performance with outlook improving

Overview of results
Contact's interim financial results to 31 December 2011 were released today
with earnings before net interest expense, income tax, depreciation,
amortisation, change in fair value of financial instruments and other
significant items (EBITDAF) of $231 million, $5m higher than the prior
corresponding period. Statutory profit was $68 million. Underlying earnings
after tax (statutory profit adjusted for significant items that do not
reflect the ongoing performance of the Group) were down $2 million to $76
million.

Contact Chief Executive Dennis Barnes said the EBITDAF result reflected an
improved electricity business segment performance despite an unfavourable
generation fuel mix and a highly competitive retail environment.

The combination of higher wholesale electricity prices and the delivery of
gas take-or-pay savings were offset by hydro generation volumes being down
307 GWh (16%) compared to the prior half year. The majority of this volume
was replaced by more expensive thermal generation with wholesale prices only
just covering costs. A return for the valuable capacity role the thermal
plant plays was not evident in market pricing.

In retail, the government led price awareness campaign "What's My Number"
drove heightened awareness amongst customers, resulting in an increase in
customer churn across the sector and saw significant customer losses for
Contact in July and August. However an updated offer for residential
customers who receive and pay their bills online successfully reversed this
trend for Contact, with the company gaining over 4,600 customers between
September and December. The response to this product, coupled with continuing
growth in the Commercial and Industrial (Time of Use) market, saw total
retail sales grow 1% over the reporting period.

Profit distribution
The Contact Board of Directors resolved to hold the interim distribution to
shareholders at the equivalent of 11 cents per share, under the company's
Profit Distribution Plan. The distribution represents a payout ratio of 102%
of Contact's underlying earnings after tax.

Te Mihi on schedule
Contact's Te Mihi power station, is proceeding to schedule and is on budget.
Contact began construction last year and it is due for completion in mid
2013. Combined with several other projects focussed on the care and
sustainability of the Wairakei steamfield, Te Mihi represents a significant
investment in the Wairakei geothermal resource.

In addition, Tauhara geothermal power station (250MW) was consented in 2010
and will be developed when market conditions allow.

Mr Barnes said today that with Te Mihi on track and Tauhara consented for
development; Contact is well positioned to make the most of its geothermal
assets, now and in the future.

Health and safety
This reporting period, Contact's total recordable injury frequency rate
(TRIFR) reduced by 20%.

"The safety of our employees, contractors and visitors remains the company's
highest priority. With our focus squarely on operating our business and
delivering projects safely, we will continue to reduce our TRIFR and work
towards our vision of achieving zero harm," said Mr Barnes.

Whirinaki and Oakey
Contact's generation portfolio has adopted a stronger local focus with the
addition of a new facility in New Zealand and the disposal of the company's
only offshore asset.

In December 2011, Contact became the owner of the 150 megawatt, diesel fired
Whirinaki peaker plant in Hawke's Bay. "The plant is a welcome addition to
Contact's portfolio, providing enhanced flexibility and fuel security to
complement existing generation capacity.

"The plant will also help Contact's active development of an electricity
hedge market in New Zealand and can be moved in the future and refuelled on
natural gas, should market conditions and gas prices make such a move
desirable," Mr Barnes said.

In January 2012, Contact exited its 25% shareholding in Oakey Power Holdings
Ltd in Queensland Australia and ceased to have any ownership stake in the 346
megawatt Oakey thermal power station. A gain of approximately $28 million
will be recognised at the full year and will be excluded from underlying
earnings.

Stratford peaker plant and Ahuroa gas storage facility
The Stratford peaker plant and Ahuroa gas storage facility entered commercial
operation in mid-2011. Providing flexibility to Contact's gas portfolio,
these assets have contributed to gas take-or-pay savings of around $23
million.

The Stratford peaker plant has predominantly been used to provide risk
management capacity in a period of limited price volatility.

Outlook
The financial year to date has been marked by low hydro generation levels.
With current national hydro storage levels at the end of January at the
lowest seen in the past 15 years there is the potential that Contact's
diverse generation assets will be required to ensure continued security of
supply to our customers.

"EBITDAF in the second half of the 2012 financial year is expected to benefit
from retail price rises including seasonally higher prices for Time of Use
customers and an increase in contract for difference sales volumes.

"Regardless of the market conditions, Contact's focus will remain on the
retail business, delivering our projects and utilising our diverse range of
generation assets and fuel options to improve returns," Mr Barnes said.

ENDS

Media enquiries
Janet Carson
021 242 5723

Investor enquiries
Fraser Gardiner
021 228 3688
End CA:00219760 For:CEN    Type:HALFYR     Time:2012-02-21 08:30:04