Auckland-based electricity and gas distributor Vector, which produced a 4.7% lift in its underlying net profit to $172.6 million for 2009/10, expects another solid improvement in earnings in the year ahead.The company said that, looking ahead, its focus w
Auckland-based electricity and gas distributor Vector, which produced a 4.7% lift in its underlying net profit to $172.6 million for 2009/10, expects another solid improvement in earnings in the year ahead.
The company said that, looking ahead, its focus would be on its growth opportunities and on improving efficiency.
Vector said it was comfortable with market expectations of an underlying net profit of $180 million to $208 million for 2010/11.
Chief executive Simon Mackenzie said the resul was a positive one, given the economic conditions and subdued demand from customers.
Vector’s fibre optics network is expected to play a part in is future.
“That’s (fibre optics) is one of our growth options but we can’t lose sight of the fact that that 60% of our revenues come from our regulated business, where we still invest in growth,” Mr Mackenzie told the National Business Review.
“Over the next 10 to 15 years Auckland’s population is going to go up by something like 800,000 people, so that is not all going to happen in year 15,” he said. “We still see some pretty strong growth in our core business.”
Forsyth Barr analyst Andrew Harvey-Green said Vector had come up with a solid result with few surprises.
The first half compared with the second half showed the effects of Vector no longer being able to avail itself to cheap Maui LPG.
The end of Vector’s legacy Maui contract meant that ebitda from gas wholesaling dropped to $22.5 million in the second half from $41 million in the first.
Vector declared a final dividend of 7.5c a share, bringing the full-year dividend to 14c compared with 13.75c for 2009.
Lower debt levels, together with the restrained interest rate environment, reduced net borrowing costs to $167 million, a decline of $22.5 million on the year before.
At the ebitda level, the company’s earnings fell by 0.7% to $578.1 million.
Electricity revenue was up $20.3 million to reach $553.9 million, and EBITDA for this part of the business improved by 6.3% to $355.8 million.
Gas transportation revenue improved by $4.2 million to reach $194.2 million, and EBITDA by $7.3 million to reach $159.7 million.
Vector owns and operates electricity distribution networks in Auckland City, Manukau City and parts of the Papakura District under the Vector brand. In the North Shore City, Waitakere City, and Rodney, Vector operates under the UnitedNetworks brand.
