Alinta Energy deep in the red

Alinta Energy Group's first half net profit has slumped into the red after accounting for a $198 million impairment charge.

The utility group booked a net loss of $261 million for the six months to the end of December 2009, down from the previous corresponding period's $18 million.

Alinta, formerly Babcock and Brown Power, said its net profit principally fell due to the $198 million impairment charge, which includes an impairment to the Alinta cash generating unit (CGU) of $175 million.

The Alinta CGU includes the company's WA retail, co-generation and LPG operations.

"The Western Australian energy market continues to experience softer than originally anticipated electricity and gas demand," Alinta Energy said in its interim report.

"As well there is a general oversupply of generation capacity.

"The persistence of these trends has resulted in a revision to medium term expectations.

"Following the NWS settlement the business is exposed to gas prices in excess of its original forecasts."

The impairment also took into account the impact of the North West Shelf settlement and the consequential changes to other contracts.

Last year, Alinta restructured its corporate facility, which included a $70 million NWS price dispute facility that matures in July 2011.

Total revenue for the group was down 7.2 per cent to $774.32 million.

Normalised earnings before interest, tax, depreciation and amortisation rose 13 per cent to $161.5 million.

Alinta Energy has reaffirmed its guidance for full-year normalised EBITDA of $288 million.

Shares in the company shed 0.6 cents to 7.9c at 14:51 AEDT.