By Gavin Evans
Nov. 27 (BusinessDesk) - WEL Networks almost doubled its first-half profit as expansion of its fibre business boosted revenue and growth in Waikato increased residential connections and commercial volumes.
Net income rose to $21.2 million in the six months through September, from $10.8 million a year earlier. Revenue increased by $19 million to $109.8 million – with electricity revenue $8.7 million higher at $74 million and fibre revenue $7.2 million higher at $31.7 million.
Operating expenses were $1.4 million higher at $47.8 million.
“The group achieved a positive operating result, increased from the prior year due to higher commercial lines consumption, continued strong urban development in the Waikato region and customer growth across the fibre network,” the community trust-owned company said in a statement.
Hamilton-based WEL is the country’s sixth-largest power distributor, supplying about 92,000 homes and businesses. It is benefiting from strong growth across its region and the on-going roll-out of fibre broadband services across the central North Island.
The firm partnered with neighbour Waipa Networks to participate in the Crown’s ultrafast broadband roll-out in 2012 and the venture was subsequently awarded additional contracts to connect more communities in Taranaki, Waikato and the Bay of Plenty. In 2016 WEL bought out the Crown’s interest in the partnership.
WEL added about 1,400 new power accounts in the year ended September, according to Electricity Authority data. In June the Ultrafast Fibre business installed its 100,000th fibre connection.
Today the firm noted that net debt increased by about $36 million to $513 million at the end of September, with the increased borrowings due to the completion of the UFB2 build. Total assets stood at $1.2 billion, a $46 million increase since March.
WEL’s accounts show earnings before interest, tax, depreciation and amortisation from the electricity network increased to $42.7 million, almost $10 million more than a year earlier. Fibre earnings almost reached $18 million, $7.6 million more than a year earlier.
The company has $150 million of bonds listed on the NZX's debt market. The notes mature in 2023 and pay annual interest of 4.9 percent. They last traded at a yield of 4.3 percent.