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FIRST CUT: Vector earnings flat; technology growth disappointing - Stiassny

Friday 24th August 2018

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Vector reported flat operating earnings for the year ended June, with growth in its smart meter business and a better performance in gas unable to offset higher costs in its electricity distribution arm.

The country’s biggest electricity distributor said earnings before interest, tax, depreciation and amortisation fell to $470.1 million in the 12 months ended June 30, down 0.9 percent from $474.4 million a year earlier. Chair Mike Stiassny noted major storms in April added $4 million of maintenance costs.

Net profit fell to $149.8 million, from $168.9 million a year earlier, which included almost $19 million in one-off gains from insurance proceeds and a favourable tax ruling related to the firm’s leasing of capacity in the Penrose tunnel to Transpower.

Revenue increased 8.3 percent to $1.33 billion, with gains across all divisions. Technology revenue rose almost 28 percent but was still disappointing, Stiassny said.

Vector, which sold its non-Auckland gas pipelines in 2016 as part of a strategy to focus on higher-returning growth projects, bought PowerSmart Solar and home ventilation firm HRV in early 2017.

The firm is also installing smart meters in Australia to take advantage of retail power reforms there and to utilise the skills it gained here as its local meter roll-out winds up.

The company will pay an 8 cents-a-share final dividend on Sept. 14, unchanged from last year. That takes the full-year payout to 16.25 cents, from 16 cents a year earlier.

The shares last traded at $3.36 and have declined 3.2 percent so far this year. 


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