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Mild weather saps Vector's June-qtr volumes

Friday 19th July 2019

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Mild weather in May and June left Vector’s power and gas volumes for the June year marginally lower than a year earlier.

The firm, which benefited from a colder winter in the first half, had said that good electricity volumes during the rest of the year would help push operating earnings toward the top end of the $480-490 million range it had forecast.

Electricity volumes had been up 0.6 percent for the nine months to March, but lost ground in the June quarter. They fell to 2,106 gigawatt-hours in the three months to June 30, down 3.3 percent from a year earlier. Distributed gas volumes were also 5 percent lower at 3.8 PJ, Vector’s latest quarterly operating report shows.

“Electricity and gas volumes are down due to relatively mild weather in May and June compared to last year,” the company said. “Connection growth is in line with what we were expecting.”

Vector shares rose 0.3 percent to $3.85, taking their gain this year to about 17 percent.

The company, the country’s biggest electricity distributor, delivered 8,410 GWh of electricity in the June year, down 0.4 percent from the year before. Reticulated gas volumes were 0.7 percent lower at 14.4 PJ.

The flat volumes are despite the firm adding a net 10,462 gas and power customers in the past year, after allowing for disconnections and decommissioned meters.

Vector has been benefiting from a building boom that saw its new gas and power connections climb to 14,300 in the June 2018 year – an 82 percent increase over five years.

But its earnings forecast for 2019 assumed new electricity connections would be flat this year at about 11,000 – just as the company reported today. Power and gas connections for the June-year just ended totalled 14,322, with a slight reduction in electricity connections more than offset by increased pipeline connections.

Vector declined to comment on its expected connections growth for the current financial year.

Auckland Council consented 13,881 new dwellings in the year ended May, 13 percent more than a year earlier, according to Stats NZ data published earlier this month. Consents increased from year-earlier levels in nine of the preceding 12 months.

Vector installed 3,111 new power connections in the June quarter, almost 15 percent more than the same period a year earlier. Gas connections, which can be more lumpy, were about 8 percent lower at 948.

(BusinessDesk)



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