Contact Energy's profits have slumped more than 60 percent on last year due to a volatile wholesale market and the rising costs of thermal generation and restricted gas supplies.
Contact Energy's Te Mihi power station. Photo: Contact Energy
Profits for the country's second-largest energy company for the year ended June were $125 million.
Last year's profit, which was $220m more, included a $170m gain from the sale of the Rockgas business and the Ahuroa storage facility.
Contact chair Rob McDonald said 2020 was a "solid" financial result.
"Profit from continuing operations was down 26 percent ... but we're pleased to deliver investors a 39 cents per share annual dividend this year which is in line with last year.
"The results are underpinned by Contact's operational efficiency, high quality and flexible portfolio of gas-fired and renewable generation assets, and the continued strength of our balance sheet."
McDonald said he was proud of the way Contact had come through the pandemic response and lockdown period.
"It was an extraordinary time, but overall Contact coped extremely well in challenging, uncharted circumstances."
Chief executive Mike Fuge said the increasing cost of gas and carbon was accelerating the case for replacing its Stratford thermal plant with renewable energy.
"The useful life of the plant has been reduced, increasing depreciation by $15m year-on-year."
Fuge said it was no secret the company was disappointed in Rio Tinto's decision to close the Tiwai Point aluminium smelter, but Contact would work to mitigate the impacts of its closure.
"We believe the best interests of NZ are served by the smelter remaining operational for at least the next five years. The inability for this to happen will be bad news not only for Southland, but also for global emissions and New Zealand's renewable energy aspirations."
He said Contact was also "actively engaged" in negotiations for revised terms for electricity supply to the Tiwai smelter and had been co-funding an accelerated work programme by Transpower to help move renewable electricity generation in the lower South Island north.
The company has put a hold on its planned development of a new geothermal project at Tauhara, while it gets a better idea of consumer demand, but Fuge said the project was a matter of when - not if.