Contact Energy Releases Its 2019 Interim Results

Contact Energy Limited (ASX:CEN) is an integrated & comprehensive energy company which focuses on the generation of electricity and the sale of electricity and gas in New Zealand.

The company has recently via an ASX release declared its half-year results for the six months ended 31 December 2018. The company reported that the EBITDAF from continuing operations was up by $61m against the prior comparative period having benefited from comparatively stronger hydro generation following record low inflows during 1H18.

Further, the company’s flexible generation portfolio and access to stored gas saw Contact increase wholesale spot market sales during the higher priced October period as the market responded to major gas field outages and lower national hydro storage levels.

During the period the company had completed the sale of Ahuroa gas storage (AGS) and the sale of the Rockgas LPG business, receiving net cash proceeds of $438m in the period. The company has exhibited continued progress in delivering value for its shareholders through its various initiatives such as implementing strong cost control, with continuing other operating costs down by $3m (3%). Cash spent on continuing SIB capital expenditure down by $5m (16%). $514m reduction in net debt.

The Net promoter score (NPS) for the final quarter of 1H19 came in at +24, up from the +20 recorded for the same period in FY18 as the brand was refreshed and smart customer solutions were launched. There were zero recordable injuries in the first half of FY19 after two employees injured in 1H18. Targeting improvement on the FY18 engagement score of 77% as the management strives to achieve a “best-in-class” employer target.

The company has declared a 1H19 dividend of 16 cents per share, up 3 cents per share on 1H18. Target FY19 dividend of 39 cents per share, up 22% on FY18. The record date for determining the eligibility of dividend payment shall be Thursday, March 21, 2019, while it is slated to be paid to the shareholders on Tuesday, April 9, 2019. A strong balance sheet, high-quality renewable generation assets and lean, low-cost operations has enabled the firm to declare increasing dividends to shareholders with the target FY19 ordinary dividend increasing to 39 cps, seven cps higher than FY18.

The management has also provided its outlook for the residual FY 19. Going forth the company will focus on delivering on the company’s transformation programme to reduce controllable costs and seek opportunities to capture value from scale efficiencies through brownfield geothermal development and by leveraging the company’s customer systems and lean operating model to improve returns.

Now, let us have a quick look at Contact Energy Limited’s stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $6.020 and trading up by 2.207% during the day’s trade, with a market capitalisation of ~$4.22 Billion. The counter opened the day at $6.04, which was also the day’s high, and touched the day’s low of $6.02 with a daily volume of 2,557. The stock has provided a YTD return of 4.62% & also posted returns of 11.34%, 8.27% & 4.62% over the past six months, three & one-months period respectively. It had a 52-week high price of $6.04 and touched 52 weeks low of $4.610, with an average volume of 2,818.

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