The result is slightly down on last year's figure of $6.1 million, which included a $2.4 million gain from a net asset sale. Revenue from operating activities was up by 1% to $150.3 million.

Net operating cash flows was down $19.4 million to $61.6 million due to a change in the prepayment conditions for retailers by regulators in Queensland and South Australia. However, Envestra' managing director, Ollie Clark, said this is a one-off timing issue and full-year cash flows will be similar to 2001-02.

"Our performance continues to be in line with expectations and after allowing for the impact on revenue of moving from a Haulage Agreement to Access Arrangement in two of the States in which we operate, we believe the result is sound," said Clark.

"Under the Access Arrangement for South Australia, about 4% of revenue, or $4 million, has moved from the first half to the second half of the fiscal year.

"A full-year result is expected to be an improvement on the $12.3 million loss in 2001-02."