Energy company Vector today reported a 4.7% increase in underlying net profit after tax of $172.6 million despite subdued demand in the year ended June 30.Based on continuing operations, its revenue increased 1.1% to $1.19 billion, but earnings before int
Energy company Vector today reported a 4.7% increase in underlying net profit after tax of $172.6 million despite subdued demand in the year ended June 30.
Based on continuing operations, its revenue increased 1.1% to $1.19 billion, but earnings before interest, tax, depreciation and amortisation (ebitda) fell 0.7% to $578.1m. The company recorded a $20.9m one-off, non-cash benefit arising from changes in the 2010 budget's tax regime.
It said ebitda growth in the electricity and gas transportation segments was offset by an anticipated decline in the gas wholesale segment and shared services.
Depreciation and amortisation increased by 7.5% to $156.3m, reflecting an increased asset base. Lower debt levels together with the restrained interest rate environment reduced net borrowing costs to $167.0m, a decline of $22.5m on the year before.
A final dividend of 7.5 cents per share was declared, bringing the full-year dividend to 14cps -- up from 13.75cps for 2009.
Chief executive Simon Mackenzie said the company was performing well, and had met expectations.
"This is a positive result, given the economic conditions and subdued demand from customers. It is pleasing to see another year of growth. Alongside our financial performance, great teamwork from our employees and contractors has delivered improved network reliability and health and safety outcomes," he said.
"We are well positioned in respect of the Government's ultra-fast broadband initiative, and have worked hard to preserve ebitda."
Electricity revenue was up $20.3m to $553.9m, and ebitda improved by 6.3% to $355.8m.
Connections to Vector's electricity networks grew by 4851 or 0.9% to 528,245. Consumption declined over the second half to end the year at 8,168 GWh, compared to 8,240 GWh for 2009.
"Unseasonably cold temperatures during April, May and June 2009 drove up consumption, whereas this year's early winter temperatures were milder," Mr Mackenzie said.
Gas transportation revenue improved by $4.2m to $194.2m, and ebitda by $7.3m to $159.7m. Gas distribution volume was 21.1 petajoules compared to 21.3PJ in 2009, and transmission volume was 2.4% ahead at 94.3PJ. Distribution connections grew by 2751 to 152,267.
Against the backdrop of lower natural gas prices, the continued wind down of legacy gas contracts, and reduced prices and volumes for LPG, gas wholesale revenue declined $10.5m to $402.8 million, and Ebitda declined $16.6m to $64.1m.
"Our gas book, however, is in a strong position; we have contracted a number of blue chip customers and acquired 4641 LPG customers," Mr Mackenzie said.
Vector's position on the Kapuni gas field redetermination was unchanged.
"The Kapuni mining companies' latest disclosure of field reserves - to the Ministry of Economic Development - supports our view that there is plenty of gas remaining in the field. Publicly disclosed reserves have increased to 1018PJ."
The company's technology segment, comprising metering and communications, delivered 12.4% revenue growth to $79.8m. Ebitda at $52.1m was flat.
Smart meter deployment more than doubled to 114,272, with the installation rate accelerating considerably.
Vector Communications extended its high speed fibre optic network and continued to participate in the government's process to deliver fibre to the door.
"Looking ahead, our focus is on our growth opportunities and improving efficiency. We are comfortable with analysts' current forecasts for our 2011 full year result," Mr Mackenzie said.
