New chairman Michael Stiassny said the result was “satisfactory”, given the return to a conventional capital structure and significant changes in the natural gas market.

NGC was debt-free for all but three weeks of the 2003 half-year, with debt servicing costs of only NZ$0.6 million, compared with NZ$16 million in the current period.

All of NGC’s businesses made higher earnings, with the exception of gas trading which was affected by the expected decline in sales volumes.

Gas sales amounted to 26.7 PJ, compared with 32.8 PJ for the 2003 half-year, due to the cessation of supply contracts with Methanex (for methanol production) and reduced sales for electricity generation as a result of agreed new delivery profiles reflecting the downward redetermination of Maui gas reserves.

The lower gas sales were the main reason for a NZ$4.4 million decline, to NZ$244.9 million, in total revenues. However, this was offset by a cost of sales reduction leading to an overall 1% improvement in gross margin.

EBIT from natural gas trading were NZ$12.4 million (NZ$21.9 million), EBIT from LPG was NZ$12.4 million (NZ$10.2 million), gas transportation NZ$34.9 million (NZ$30.8 million) and energy metering NZ$10.2 million (NZ$9.9 million).

Stiassny said it was particularly pleasing that continuing strong trading cash flow generation had enabled the directors to declare a further dividend of 3 cents per share, in addition to the 9 cents per share paid last November. That payment let NGC shareholders receive available imputation credits before they were forfeited as a result Vector’s purchase of AGL’s majority shareholding in NGC.

The total dividend of 12 cents per share, fully imputed, for the period compared with 8.5 cents per share, fully imputed, for the corresponding previous period.

Stiassny said difficult times still lay ahead for gas trading operations as the post-Maui market was still evolving.

“However, the outlook for NGC’s businesses generally is very positive,” said Stiassny and he added that full-year earnings were expected to be in line with the NZ$81.5 million forecast by Grant Samuel in its independent report on the takeover offer by Vector.