Electricity and gas distributor Vector says it “cautiously confident” its full year net profit will exceed analyst expectations after posting an improved first half profit from continuing operations.

The company reported a $13.4 million increase in operating net profit to $90.8 million for the six months to December. This excludes a $202.9 million gain on the sale of its Wellington lines business.

Ebitda of $313.2 million compared to $281.5 million during the prior comparable period, however revenue from continuing operations was down from $611.2 million to $609.5 million.

Chief executive Simon Mackenzie says the results are in line with the company's expectations.

"The continued uncertain business environment in New Zealand means we are all navigating uncharted waters. Despite this the board and management remain cautiously confident that the company's end of year financial results will be above analyst's current expectations."

The board has recommended an interim dividend of 6.5 cents per share, payable on 14 April 2009, which is at the same level for the comparable period.

Mr MacKenzie says the company has discussed with the government the possibility of deferring a regulatory electricity and price re-set set down for September 2009, until the second half of 2010.

He says the current volatility in global capital markets and economic conditions present significant challenges for the commission when it determines how it will set price paths.

"Entering the price setting process, Vector continues to experience cost pressures such as tight capital markets which are keeping the cost of available funding high.

"Capital and operating costs continue to rise due to factors such as the weakening New Zealand dollar and infrastructure.

"We believe the alignment of the reset should be deferred until after default price setting in mid to late 2010."