Contact Energy has reported an increase in net profit and says it expects to finalise a more generous electricity deal with Tiwai Point aluminium smelter.

It's recorded a net profit of $153 million for the six months to December.

CEO Mike Fuge says he's optimistic about a better long-term agreement with Rio Tinto.

"We've been really clear, there are three things- and like any negotiation, it's a two-way street."

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