Financial Results: Customer focus driving change

MARKET RELEASE 24 August 2016

FINANCIAL RESULTS FOR THE 12 MONTHS TO 30 JUNE 2016

Customer focus driving change

Vector enabling customer choice and driving industry transformation by embracing new technologies. Growth in Auckland and metering services lifts financial performance.

HIGHLIGHTS:

- Sale of Vector Gas results in gain on sale of $164.1 million and releases capital to repay debt and ultimately redeploy into new growth opportunities

- Adjusted EBITDA from continuing operations (that is, excluding Vector Gas) rises 4.7% to $473.0 million from $451.9 million as Vector benefits from growth in Auckland and metering and strong cost control across its regulated businesses, off-set by a decline at Gas Trading

- New Zealand smart meter fleet reaches 1,126,258 and Vector installs its first smart meters in Australia after receiving Australian Energy Market Operator accreditation earlier in the financial year

- Installed a 1 MW Tesla Energy network battery in Glen Innes and installed 78 Tesla Powerwall batteries with the support of majority shareholder Entrust

- Well-signalled non-cash write-down in Gas Trading goodwill of $64.0 million reflects outlook for natural gas operations, and in particular declining output from Kapuni and diminishing prospects of further field development due to ongoing disputes

- Net profit for the year of $274.4 million, up 84% from $149.4 million in the prior year, lifted by increased operating earnings, lower interest costs, favourable derivative movements and the $164.1 million gain on the sale of Vector Gas, partially offset by the write down in the value of the Gas Trading business

- Our Total Recordable Injury Frequency Rate (TRIFR) for the year to 30 June 2016 increased 7.9% to 8.04, but remains more than 40% below 2013 level

- Full year dividend increases for tenth consecutive year to 15.75 cents per share after fully-imputed final dividend declared of 8.0 cents per share. The record date for dividend entitlements is 8 September 2016 and the payment date is 15 September 2016

- Vector expects adjusted EBITDA for the year to 30 June 2017 to be between $460 million to $475 million

Full release: FY16_Market_Release_FINAL.PDF
Presentation: Annual_Results_2016_Analyst_Presentation.pdf

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