Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Vector first-half profit up 15%

Vector first-half profit up 15%, gas trading challenging

By Pattrick Smellie

Feb. 26 (BusinessDesk) - Auckland electricity and telecommunications infrastructure provider Vector reported a 16 percent lift in first-half profit to $100.1 million.

The result reflected gains across its portfolio, with the exception of its gas trading division, which faces the prospect of a writedown in the second-half unless performance improves. The profit was achieved on total revenue for the half of $663 million, a 3.5 percent fall from the same period last year, driven by lower volumes of traded gas.

Adjusted earnings before interest, tax, depreciation and amortisation, a measure of underlying performance, rose to $305.9 million from $287.9 million.

“Adjusted ebitda across our regulated businesses rose 6.2 percent to $248.8 million supported by growth in connections and energy volumes in Auckland, regulated price increases in the gas transportation business and a strong focus on cost control,” chair Michael Stiassny said in a statement.

Adjusted ebitda in the company’s unregulated businesses, including telecommunications services, metering and gas trading, rose 3.9 percent to $82.2 million and included costs of establishing in the Australian metering market.

“These gains have been diluted by the ongoing challenges for the gas trading business. “Should the trading outlook for this business continue to weaken, we will carefully review the carrying value of the gas trading assets and goodwill at year-end,” Stiassny said.

Sale of the company’s gas transmission and non-Auckland gas distribution businesses was approved by shareholders before Christmas.

“Absent the sale, the business is performing in line with August guidance for the year to 30 June 2016 of adjusted ebitda, excluding capital contributions, of $550 million to $565 million,” Stiassny said.

The Vector gas sale remains subject to regulatory approvals and may have a bearing on the full year result. The $952 million proceeds will be used for debt repayment and investment in higher value opportunities.

Vector will pay an increased interim dividend of 7.75 cents per share on April 14, fully imputed, up from 7.5 cents at the first-half last year.

Technology division revenue rose 16 percent to $88.5 million for adjusted ebitda of $57 million, up 15 percent, benefiting from a larger smart meter fleet following the acquisition of Arc Innovations from Meridian Energy and an increased rate of deployment.

The shares rose 0.3 percent to $3.26, having increased 2.5 percent so far this year.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Water: Farming Leaders Pledge To Help Make Rivers Swimmable

In a first for the country, farming leaders have pledged to work together to help make New Zealand’s rivers swimmable for future generations. More>>


Unintended Consequences: Liquor Change For Grocery Stores On Tobacco Tax

Changes in the law made to enable grocery stores to continue holding liquor licences to sell alcohol despite increases in tobacco taxes will take effect on 15 September 2017. More>>

Back Again: Government Approves TPP11 Mandate

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>


By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>


Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>


Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>