Contact chief executive Steve Barrett said his company had recently reappraised its Australian investment strategy and concluded the commercial logic for pursuing an integrated energy business in Australia had changed “fundamentally”.

“For a variety of reasons, including the recent change in majority shareholder (Origin Energy replacing Edison Mission Energy) and the emergence of new opportunities in New Zealand, we have determined that Contact’s focus should be concentrated in the New Zealand market," he said.

“This does not rule out investment in Australia if particular opportunities arise, however, we will no longer be pursuing a stand-alone integrated business model in Australia.”

Red Energy was launched earlier this year as a start-up retailer in Victoria. The sale terms reflected Red Energy’s start-up status, with a nominal upfront payment by Snowy Hydro and the balance being paid over three years, subject to Red Energy achieving certain targets.

Barrett said Contact was writing-off its net investment in Red Energy, though future sale payments, based on performance, would be booked as income.

“While the creation of a start-up Australian retail business no longer fits with Contact’s strategy, we are pleased Snowy Hydro has seen the potential in Red Energy, and chosen to pursue this development.”