One could be fair in saying Contact Energy (ASX:CEN) has had a surprisingly quiet day on the intraday Tuesday session of Week 39, with the NZ-based gas provider confirming that from the start of next month, it will now be the sole “all of government” gas supplier in NZ once an existing contract winds up.
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Normally, you’d think that would be pretty good news – the kind of revenue certainty that only the public sector can provide; evidence of a good government relationship team at HQ; possibly, even, the benefits of becoming embedded in the government supply chain. But the ASX hasn’t seen that today, nor has the company’s listing on the NZX over the pond.
In fact, shares shot up out of the gate and pared back in the first ten minutes of trade, suggesting profit takers moved in to recover some peace of mind from what is otherwise -2.75% Wow losses for the thinly traded stock.
Already above $8 a share, Contact doesn’t offer the exciting promise of gains that some smaller gas players can; and it’s also fair to say that with the current hype being around the intersection of defence and critical mineral supply, so long as you ignore gold, maybe the lack of pronounced reaction is unsurprising. It also remains true Contact Energy, an NZ gas utility player, doesn’t really have any sex appeal, either.
It also has the curious boast that it’s a gas utility retailer that also offers broadband and mobile phone plans. New Zealand can be a strange place, but company CEO Mike Fuge didn’t get lost in the weeds of noteworthy diversification.
“Contact’s recent actions to secure gas for the medium term will support security of supply for essential institutions like schools and hospitals, as well as Kiwi businesses and homes,” Fuge said, in the tone that most companies who work with government start to sound like their media departments.
“This way we can help them continue to operate and walk alongside them as they transition to a renewable energy future.” Maybe the big problem facing investor excitement around CEN is that, for a gas company, it’s really just more of the same.
CEN last traded at $8.16/sh.
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