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Energy network company Vector has unveiled a 29.5 per cent fall in full year net profit to $164.4 million.
Chairman Michael Stiassny said the result was "very robust" and due to efforts to streamline the business by removing inefficiencies, cutting costs and concentrating on those operations that met the company's criteria for growth.
The comparative net profit for 2007 of $233.3m was restated under new international accounting rules, and so was inflated by a previously disclosed one-off tax adjustments, said the company.
Earnings before interest, tax, depreciation and amortisation for the year to the end of June rose 5.7 per cent to $640m, with group revenue up 1.7 per cent to $1.33 billion.
A fully imputed dividend of 6.75 cents per share will be paid, compared to 6.5cps last year.
Vector also said today that its previously announced buy-back of up to 25 million ordinary shares would start on September 1 and run to August 27 next year.
Chief executive Simon Mackenzie said Vector's core businesses had made increased contributions, increased revenue and reduced costs.
Growth in electricity earnings, increased gas transmission volumes, firmer LPG prices and continued growth in technology revenue over the last year all contributed.
The increase in total revenue to $1.33b was due mainly to increases in electricity volumes and connections in Auckland, as well as a Consumer Price Index price increase.
The cost efficiency programme during the year contributed to a reduction on 2007 in operating expenditure of $15m before one-off redundancy costs, Vector said.
That was also helped by a reduction in gas purchases and associated costs of sales of $15.9m.
Operating cash-flows decreased by 7.4 per cent to $331m, driven mainly by increased net interest paid, increased level of cash tax payments, and a reduction in creditors.
Mackenzie said that telecommunications remained a key area of focus for Vector, which was strongly placed to deliver much needed broadband infrastructure but would only proceed if the company's usual commercial criteria and risk profile were satisfied.
At the end of May, the Commerce Commission accepted a settlement proposal from Vector as an alternative to regulatory control being imposed on its electricity distribution business.
Some consumer groups were being significantly overcharged while others, including Auckland residential consumers, were being undercharged, the commission said.
Late last month Vector concluded the $785m sale of its Wellington power lines network to Hong Kong-based Cheung Kong Infrastructure Holdings and Hongkong Electric Holdings.
Vector's shares, which are 75 per cent held by an Auckland-based consumer energy trust, were up 3c in late morning trade today to $2.33.
- NZPA
