Contact Energy's First-Half Result In Line with Expectations; International Ambitions Perplexing

Contact Energy reported a 2.5% fall in earnings before interest, tax, depreciation & amortisation, or EBITDA, in the first half of fiscal 2015. The performance of its core electricity business was nearly consistent with the half-year operating statics provided last month. Weakness reflects pressured retail margins and some one-off costs in the retail division. This was not enough to fully offset savings in generation costs given a higher mix of lower-cost renewable generation. Contact Energy's EBITDA would have been higher than last year but for the lower-than-normal utilisation of its geothermal fleet as a result of outages. The company expects geothermal utilisation to be at normal levels in the second half, which will assist margins going forward, as geothermal continues to replace higher-cost thermal generation.