Energy infrastructure company and takeover target Hastings Diversified Utilities Fund has narrowed its full year net loss and says the outlook is favourable.

The company on Friday reported a net loss for the 2011 calendar year of $29.9 million, compared to a net loss of $37 million for 2010.

Hastings said the result included non-operating items and the financial contribution of South East Water, which was divested in December 2010, and hybrid securities that were redeemed in June of that year.

Chief executive Colin Atkin said the completion of the South West Queensland Pipeline expansion project on time and under budget ensured the company was positioned to benefit from an expected increase in domestic gas demand.

Given Hastings’ favourable outlook, Mr Atkin said, it was clear that a hostile, highly conditional $1.8 billion takeover by larger rival APA Group undervalued the target and did not recognised the value of its strategically positioned pipelines.

As outlined in its target’s statement, Hastings expects significant contracted revenue growth, underpinned by more than $4 billion of total contracted revenue.

Shares in Hastings were down two cents at $2.12 at 1337 AEDT.