Overall revenue from Contact's gas business was down by 24%, reflecting increased internal use of gas and reduced retail gas sales as Contact continued to lose more large volume, low margin gas customers. However, this result was somewhat offset by increased sales to Genesis Power for use in its1000MW Huntly power station during the June 2003 quarter.

Wholesale gas revenue was 38% lower, primarily due to a reduction in sales of gas to other generators, including Contact's $NZ500 million purchase from NGC of the Taranaki Combined Cycle (TCC) plant at Stratford. The 4.5PJ of gas used by TCC in the nine-months was now included as internal gas use. This low figure means that Contact is only running the 354MW TCC plant at about half capacity.

Contact also made some additional gas sales this winter, including the sale of up to 4.6PJ scheduled for delivery to Genesis in future years.

Contact's retail gas revenue was 7% lower, due to a range of factors including the sale of some large customers and the non-renewal of sales contracts with some large customers.

However, a comparison between the respective nine-month and three-month 2002 and 2003 periods is the most telling for Contact, which inherited its 40% entitlement to Maui gas when it was formed from the break-up of the government-owned ECNZ in the late-1990s.

Wholesale gas revenue for the nine months ending June 2002 was $NZ111.7 million, but only $NZ69 million for the same 2003 period. For the June 2002 quarter the result was $NZ46.2 million, but only $NZ25.4 million a year later. Total gas sales and use was 59.6PJ for the 2002 period and only 48.1PJ for the 2003 period, while the June 2002 quarter sales of 25.4PJ plunged to 20.4PJ a year later.

However, increased electricity sales, underpinned by volume increases through retail growth and increased forward sales through hedging, enabled Contact to record its overall pleasing profit.

The Wellington-headquartered power generator and gas trader today announced an after-tax profit for the nine-month period of $NZ74.2 million, which was 5% above that achieved for the same period last year though, on an adjusted basis 9% below the $NZ81.7 million result for the June 2002 nine months.

"The result again shows the value of Contact's integrated business which seeks a degree of balance between the company's wholesale and retail electricity market exposures," commented company chief executive Steve Barrett.