KEY POINTS:
A colder 2006 winter has helped Vector, the country's largest electricity distributor, report a net profit after tax (Npat) up 18.4 per cent to $39.6 million for the nine months ended March 31.
Npat excluding amortisation was 7.4 per cent higher at $114m, compared to the corresponding period a year ago, the company said today.
Chairman Michael Stiassny said the results demonstrated a continuing strong performance across the company's businesses, with all maintaining earnings contributions ahead of the previous corresponding period.
The results also continued to reflect the reported interim results position, in which major new natural gas sales contracts undertaken during the period and the return to colder winter weather, following the warm winter of 2005, contributed to significantly higher revenues.
The period-on-period climate differences were particularly evident in the first six months of the current financial year and Vector had seen a return to more normal electricity usage patterns in the three months to the end of March, Mr Stiassny said.
A pleasing ongoing level of new connections to Vector's electricity and gas networks and natural gas sales volume growth of almost 55 per cent to 40.1 petajoules, were major contributors to a 24.5 per cent revenue increase to $1 billion in the latest nine-month period.
Earnings before interest, tax, depreciation and amortisation (ebitda) increased by 8.6 per cent to $456.7m.
That was after allowing for 41.5 per cent higher operating costs of $554.1m as a result of additional gas purchases required for the higher sales volumes, increased electricity transmission costs, and costs associated with regulatory compliance.
Vector has narrowed the range of its expected full year net profit after tax to between $58m to $63m. In February it had said it expected a full year profit at the top end of the current market range of $42m to $65m.
Mr Stiassny said the nine-month period saw unprecedented attention on climate change and associated environmental issues.
Vector had responded by expanding its environmental strategy to build on existing climate change mitigation initiatives, and in offering services that helped customers use energy more efficiently.
Vector, 75 per cent controlled by an Auckland-based consumer trust, became the country's largest electricity distributor after buying a large part of United Networks in 2002, then NGC Holdings Ltd.
Last August, the Commerce Commission threatened to take control of Vector, saying it was overcharging industrial and commercial customers and undercharging others, particularly Auckland residential consumers.
In December, three influential independent directors abruptly resigned, citing concern with the governance of the company and expressing no confidence in the leadership of Mr Stiassny.
Then, in February, Vector announced reset electricity line charges across its Auckland, Northern and Wellington networks, effective from April 1.
The changes were consistent with a rebalancing programme formalised in an agreement accepted in principle by the Commerce Commission last October.
For the nine-month period, electricity delivered to customers in Vector's greater Auckland and Wellington networks increased 3.4 per cent to 7880 gigawatt hours.
Electricity connections increased by 11,266 in the year to March 31, to 671,678, while the electricity business delivered a 6.5 per cent higher ebitda of $276.8m, on 10.9 per cent higher revenues of $461.3m.
Gas business revenues were up 41.4 per cent to $530.9m, while, allowing for cost increases associated with additional product purchases, ebitda increased by 25.3 per cent to $188.8m.
The near-55 per cent growth in natural gas sales to 40.1 petajoules, included 11.1 PJ in new sales contracts to petrochemical producers and a doubling of the volume sold for electricity generation to 6.6 PJ.
Gas sales to industrial and commercial customers slipped about 2 per cent to 14.9 PJ.
Vector shares were up 1c to $2.85 in early trade today, having ranged between $3 and $2.11 in the past year.
- NZPA
