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.
(BusinessDesk)