Tasmania's electricity retailer Aurora Energy has returned its strongest ever financial result.

The government-owned business cites cost cutting as the reason for the success.

Aurora Energy's Chairman Geoff Willis says the company's operating profit for last financial year was $76.5 million, up $20 million on last year.

Mr Willis says a cut in expenses of more than $31 million shows strong management over a period of major industry reform.

Those changes include the merging of Aurora with transmission business Transend.

It is good news for a cash-strapped State Government; Aurora's dividend will go up by 36 per cent this year to $25 million.

Unions say the record profit is partly due to hundreds of job losses.