Pacific Hydro said earnings before interest, tax, depreciation and amortisation (EBITDA) rose 26% compared to the previous first half.

"The company is on track to exceed its previous full year profit of $31.2 million," Pacific Hydro said.

These results come at a good time for Pacific Hydro as various companies prepare to undertake due diligence on the takeover and merger target.

Last October, the company called for indicative proposals and reported receiving strong interest from local and overseas companies.

"A number of these parties have been selected to undertake due diligence on Pacific Hydro," managing director Jeff Harding said.

"The process will continue through the first quarter of 2005."

Harding said the higher first-half profits were pleasing given that Pacific Hydro’s Bakun hydro project in the Philippines was adversely hit by dry weather and the weaker US dollar exchange rate.

"The improved result includes a full six months of generation from the Chilean Coya and Pangal power plants which were acquired in April 2004," Harding said.

The company was optimistic about the coming year with Kyoto Protocol global carbon trading taking effect on 16 February. This should deliver big benefits to Pacific Hydro’s Philippine, Fijian and Chilean operations, Harding said.

Pacific Hydro's gearing was 24.5%, up from 21.6% in the first half of 2003/04. The company also declared an unfranked 2.5 cent dividend, unchanged from the previous year.

The company posted a sharp jump in revenue to $27.156 million for the first half, 67.4% higher than the same period a year earlier.