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Vector profit drops 30%

Wednesday 27th August 2008

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Vector, New Zealand's biggest distributor of electricity and natural gas, posted a 30% drop in full-year profit, reflecting year-earlier tax adjustments.

Net income fell to NZ$164.4 million in the 12 months ended June 30 from NZ$233.3 million a year earlier, the company said in a statement. Year earlier results were restated for IFRS. Sales rose 1.7% to NZ$1.2 billion.

The company plans to buy back up to NZ$25 million of its shares starting September 1 and increased its final dividend to 13.25 cents a share from 13 cents. The shares have outperformed the NZX 50 Index this year, gaining 4% while the benchmark dropped 18%.

"Our core businesses have made increased contributions, increased revenue and have reduced costs," chief executive Simon Mackenzie said. The gain in sales reflects high electricity volumes and connections in Auckland and a CPI-linked price increase, he said.

Separately today, Vector said it gained a contract with Genesis Energy to roll out advanced metering services to 500,000 homes and businesses. No price was given for the contract.

The contract follows Vector move last year to start a joint venture with Siemens (NZ) to deliver the metering technology in New Zealand.

Vector stock fell 0.9% to NZ$2.28.

By Jonathan Underhill

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