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NGC return to profitability.


HOMEX - Sydney



Natural Gas Corporation Holdings Limited (NGC) has continued it's
strong financial recovery, more than doubling its half year return to
profit to post net earnings of $34.5 million for the year ended 30
June 2002.

NGC recorded a $301.6 million loss in 2001, but recovered rapidly to
record a $16.1 million profit for the first half of the 2002
financial year. The Company also made an earlier than expected return
to dividend payments, and today announced that it is adding a 3.5
cents per share final dividend (unimputed), to the 3 cents per share
(unimputed) interim dividend declared in association with the half
year result. The final dividend will be paid on 16 September 2002 to
shareholders registered on 6 September 2002.

Announcing the annual result today, the Chairman, Mr Greg Martin,
said, "The earnings improvement is founded on an outstanding
performance by NGC's natural gas trading business, strong results
from gas transportation and metering activities and a steady
contribution from LPG trading. By contrast, the electricity
generation and trading activities returned lower earnings for the
year due to a substantial decline in wholesale electricity prices
during the second half of the year."

The net earnings of $34.5 million were achieved after allowing for an
after-tax abnormal lose of $22.7 million, comprising a loss of $41.5
million from electricity retailing activities in July 2001, before
NGC's withdrawal from that business in August 2001. This item was
offset by three abnormal gains, including an $8 million gas
commitment fee receipt from Contact Energy. Excluding the abnormal
items, earnings increased from $9.9 million in 2001 to $57.2 million.

Mr Martin said, "The 32.7% increase from $55.6 million to $73.8
million from continuing activities, excluding the now discontinued
electricity retailing activities, further demonstrated the underlying
cash flow and earnings generation strengths of NGC's ongoing
businesses. Trading cash flows and proceeds from the electricity
customer sales have been directed to debt reduction and servicing,
amounting to $225.2 million."

He added that, "Due to last years tax losses and prior year tax
prepayments, NGC was unlikely to return to fully imputed dividend
payments before the end of the 2004 financial year. However, the 6.5
cents per share dividend payment for the year equated to a
distribution of all of NGC's not earnings, including a gross-up for
corporate tax. This means that NGC's shareholders are receiving a
similar level of net dividend."

The Chief Executive, Mr Phil James, said, "The key businesses of
natural gas, LPG and infrastructure operations allrecorded improved
product volume sales and revenues, and earnings were assisted by a
significant overall decline In operating and finance costs."

Mr James further commented, "The strong demand for natural gas and,
in particular, the substantial requirements for gas-fired generation
during the 2001 winter's hydro shortages, demonstrated the economic
and energy supply importance of New Zealand's indigenous gas

"The role of gas in the energy supply mix has assumed asharper focus
with the Maui gas reserves redetermination process. I am pleased
that, with the appointment of an independent expert to take the
process to a conclusion, the industry should know the state of
remaining reserves by the end of the year. That will allow NGC and
other participants to plan their business strategies with greater

Mr James concluded by saying, "NGC recognised that the gas industry
needed to evolve for the post-Maui supply environment. By working
closely with other industry participants and customers, NGC is
determined to ensure its gas infrastructure is fully capable of
enabling change and helping the gas industry to continue to realise
its full potential."

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