AGL Energy's acquisition of a major Victorian power plant has contributed to a significant rise in first half profit to $365 million.
AGL acquired Loy Yang A, Australia's third largest coal fired power station, in June 2012.
The contribution of earnings from Loy Yang helped AGL's net profit in the six months to December 31 rise from $117 million in the previous corresponding period.
But the company said profit growth in the second half of the 2012/13 financial year would be constrained by volatile wholesale electricity prices, deregulation of prices in South Australia and low demand for electricity.
Australia's second largest energy retailer - behind Origin Energy - grew its customer base by 56,700 (1.6 per cent).
In NSW, where it has been able to poach electricity customers in the recently-privatised market, the number grew by 64,220.
Increased competition was evident in both the NSW gas and Victorian electricity markets, the company said.
Excluding significant items such as Loy Yang's contribution, underlying profit was $279.4 million, up 20 per cent on the prior corresponding period.
The company increased its fully-franked dividend to 30 cents a share, from 29 cents.
AGL re-affirmed underlying profit guidance of $590 million to $640 million for the 12 months ending 30 June 2013.
AGL's stronger bottom line was helped by an after-tax gain of $85.3 million on its use of derivatives to hedge against electricity price and other risks, compared to a $115.9 million loss last year.
AGL said, in a statement, that it was committed to safely developing coal seam gas (CSG) reserves in NSW to alleviate an expected shortage of gas.
The company has conditional federal approval for a 110-well coal seam methane gas project at Gloucester on the state's mid-north coast.
However, it has suspended a proposed $100 million 66-well Camden CSG project on Sydney's southwestern fringe amid new regulations and community anger.
East coast annual gas demand is expected to increase significantly in coming years at the same time a suite of large new liquefied natural gas projects start exports out of Australia.