The company, which operates the hydro dams on the Clutha River, reported operating earnings of $230.9 million for the six months ended December, up 2.4% on the previous corresponding period.
Its reported profit was down 18.9% to $68.2 million but Contact included an abnormal gain of $8.1 million under-neath the reported profit line to list a "normalised profit" of $76.3 million.
Forsyth Barr broker Peter Young said the outlook comments for Contact hinted at the prospect of a stronger second-half performance, particularly if conditions stayed dry.
"However, it was light on detail and there was no indication as to what a 'reasonable profit' expectation could be."
Given the first-half result was in line with the Forsyth Barr forecast, Mr Young did not envisage any significant changes to forecasts or valuation due to the result.
But given it was still dry, there was more likely to be upwards pressure on the full-year forecast, he said.
The broker's accumulate recommendation for Contact shares reflected the long-term value of the company, Mr Young said.
As expected, Contact cited the poor hydro conditions in the first half - second-lowest hydro generation in 14 years - and the fact that wholesale prices were only above the operating cost of the thermal fleet for 50% of the time.
Contact's cheap form of generation was down 16% on the pcp but wholesale prices did not spike sufficiently for the company to fire up its thermal fleet.
"All it did was replace cheap generation with expensive generation."
Retail conditions were tough for Contact, Mr Young said. The retail contribution was $10 million in the period, down $5 million on the pcp. Contact blamed elevated competition levels and increasing costs for the fall.
The company's new gas storage facility at Ahuroa also meant Contact stopped reporting losses on the sale at distressed prices or abandonment of rights to natural gas under take-or-pay contracts, which cost it $23.6 million in the pcp.
The sale of its stake in the Oakey power station, in Queensland, during the period also allowed a $28 million one-off gain to be booked.
Contact also arrested plummeting customer numbers with a new 22% prompt payment discount for customers receiving billing online and paying on time, and regained 4600 customers of more than 16,000 lost during an Electricity Authority-sponsored customer switching campaign at the start of the period.
However, the new discount - which 146,000 of its 443,000 customers have taken up - was a main reason retail margins fell from 2% to 1%. Contact showed how it has been aggressively shifting load closer to its North Island generation as part of a strategy to manage dry year risk by reducing South Island exposure.
North Island load was 71% of the total in the first half under review, compared with 64% in the pcp.
"The combination of higher wholesale electricity prices and the delivery of gas take-or-pay savings was offset by the hydro generation volumes being down 307GWh [16%] compared to the prior half year," chief executive Dennis Barnes said.
"The majority of this volume was replaced by more expensive thermal generation, with wholesale prices only just covering costs. A return for the valuable capacity role the thermal plant plays was not evident in market pricing."
History suggested that if hydro conditions remained dry, wholesale prices were likely to rise more dramatically in the second half of the financial year, which coincided with autumn, when hydro storage levels before winter become a critical factor for electricity generators, he said.
The company will pay an interim dividend in the form of non-taxable bonus shares at a rate equivalent to 11c per share, equating to a payout ratio of 102% of underlying post-tax earnings.
