Contact downgrades profit forecast

By DAVID HARGREAVES - BusinessDay.co.nz | Wednesday, 08 October 2008

One of the country's largest companies, Contact Energy has downgraded its forecast for full-year earnings, saying its first quarter performance has been "well below expectations".

For the year to June the power company had a 1 per cent drop in after tax earnings to $237.1 million.

At the time of announcing the results, in August, Contact said it did not see itself "significantly outperforming the 2008 financial year result" in the new year.

However, in an investor presentation today, the company subtly shifted its position, saying it "does not currently expect to outperform its 2008 financial results".

The company did not provide any specific guidance in terms of figures.

Contact has been suffering what it describes as extreme weather conditions and systemic power transmission constraints, the latter involving the moving of power between the North and South Islands.

The company will be holding its annual meeting on October 23, at which it will be seeking to increase the amount of fees it can pay directors from $770,000 to $1.5 million.