Vector profit up 6.9%

Vector has reported revenue of $634.3 million in its interim result announced this morning, up 0.8% on the $629.3 million recorded in 2011.

In the six months to December 31, 2011, the company's EBITDA improved to $323.6 million, a rise of 1.9% on the $317.7 million from 2011, Vector group chief executive Simon Mackenzie said when announcing the results.

Vector's performance over the period showed it had continued to grow, despite fickle economic conditions, Mr Mackenzie said.

The results also showed that NPAT (net profit after taxation attributable to owners of the parent) was up 6.9% to $105.3 million, compared with $98.5 million for 2011, while operating cash flow was $242.4 million, compared with $248.1 million for 2011.

Mr Mackenzie said not only had Vector made small but steady improvements in first half gas and electricity volume during the past two years, the company's smart meter business had been strengthened and its gas wholesale team had signed some significant customer and supply agreements.

With more than $200 million invested in capital expenditure every year, the company was growing steadily, Mr Mackenzie said

“It’s not only our networks that are growing as Auckland grows,” he said. “We are also investing in our metering, communications and wholesale gas businesses and exploring growth opportunities.”

The performance of Vector's technology businesses was also pleasing, he said.

Growth highlights there included a new smart meter contract with Contact Energy for the supply of 150,000 units, the proposed purchase of the remaining 30% of metering business Stream and a new contract for communications services with Transpower, he said.

On top of that new and renewed contracts to supply major customers, Methanex and Carter Holt Harvey, together with a three year contract to source 3.5 PJ of gas annually from TAG Oil’s Sidewinder field has further strengthened Vector’s competitive wholesale gas business, Mr Mackenzie said.

Vector would pay an increased interim dividend of 7 cents per share, up from 6.75 cents last year, he said.