Electricity lines firm builds on profits

By RICHARD BRADDELL

Utilities company UnitedNetworks expects a $115 million net profit in calendar 2001 as it integrates new operations embracing gas and telecommunications networks acquired or built in the past year.

The electricity lines company yesterday reported a $109 million net profit for the 2000 year - up from $105 million in 1999 - and declared a final 17c a share dividend, making a 10 per cent rise to 33c for the year.

A bullish chief executive, Dan Warnock, said the company's future now went well beyond being an electricity utility. There were many opportunities, a large number of which were just appearing, in gas and telecommunications.

A large telecommunications company on Monday will become the first user of the $30 million fibre-optic telecommunications cables United has been pushing through unused gas mains in the Auckland and Wellington central business districts.

Mr Warnock said United's early completion of a telecommunications link to the central business district from the pan-Pacific Southern Cross cable, which lands in Takapuna specifically to meet one particular customer's needs, had given the company credibility in the telecommunications market.

Its experience in telecommunications had also created a new sense of urgency across the company.

That would find particular application in the gas business and the industry as a whole, which he viewed as unimpressive and lacking in customer focus.

He expected the company would build gas, electricity and telecommunications infrastructure that would share the same trenching when it entered new subdivisions.

United's rebirth as a broad-based networks operator is almost an accident. The opportunity to buy the Orion gas networks came up only last year, and the chance to push telecommunications cabling through unused gas mains was conceived after the $550 million acquisition was made last April.

While Mr Warnock said United had played its part in being a good operator in the electricity market, he was concerned at the "draconian" reserve powers contained in the Electricity Industry Bill that would enable future energy ministers to intervene if they wished.

United would talk to the Government as the bill made its way through Parliament.

The company expects to sell its contracting division, which has a book value of $20 million to $30 million depending on work in progress, by midyear.