KEY POINTS:
Auckland lines company Vector today reported an 18 per cent fall in its December half year net profit to $90.7 million.
The company also announced an extension of its tie-up with Vodafone that will use another 300km of Vector's fibre network in Auckland.
That move will allow the global mobile phone giant to greatly enhance its broadband network in the Auckland market. Fixed line services will be provided via the internet.
Vector, which reported an unchanged dividend of 6.5 cents per share, said the profit was in line with previous guidance.
However, chairman Michael Stiassny said he was confident the company's full year net earnings would sit comfortably within, or above, the range of analysts' published forecasts.
Revenue from ordinary activities for the company, 75 per cent controlled by a publicly owned Auckland-based consumer trust, was flat on $689m.
Earnings before interest, taxation, depreciation and amortisation were $332.1m.
Mr Stiassny said it was a "pleasing result".
The lower profit reflected higher borrowing costs, which were up $7.1 million, and increased depreciation, chiefly due to accelerated depreciation on meters due to a pending upgrade to smart meters.
Chief executive Simon Mackenzie, who yesterday was upgraded from acting ceo, said the Vodafone agreement was a significant development that would remove bandwidth constraints being experienced in Auckland.
"It shows what is possible when we join forces as an infrastructure company with a retail or service provider in the right environment," he said.
Vector's new network stretches from the North Shore to Papakura to Henderson creating a fibre backbone ring for the Auckland region and giving it 500km of fibre.
Vodafone NZ chief executive Russell Stanners said Vector's network offered opportunities to other telecommunications providers to take advantage of the "true broadband capability".
"The extension to our fibre network in Auckland means we will further the development of true broadband, expand our customer reach and enable greater competition in the unbundled local loop environment," MacKenzie said.
The network will connect 40 of Vector's electricity substations.
In addition, it will connect to 41 of Telecom's exchanges and that will enable telecom companies access to Telecom's unbundled copper local loop (UCLL) and remove bandwidth constraints.
Vector shares were up one cent to $2.07. They have traded between $2.02 and $3.00 in the past year.
Telecom shares were down 2 cents to $3.95.
- NZPA
