KEY POINTS:
Vector expects its full year profit to be $40 million higher following the lowering of corporate tax rates.
But it said today the adjustment had no impact on the company's underlying profitability and cash flows.
Energy networks company Vector said it reiterated its core earnings guidance for the year to the end of June, but a change in its deferred tax liability would impact on reported earnings.
The company previously indicated guidance for underlying net earnings of $58 million to $63 million.
Vector said a reduction in the corporate tax rate from 33 per cent to 30 per cent, announced in the Government's budget in May, required Vector to restate its deferred tax liabilities at the lower rate as part of its year-end accounting processes.
The result of that reduction was a one off impact which would increase reported profit by $40 million for the 2006/07 financial year, Vector said.
"The deferred tax adjustment is a one-off, non-cash accounting entry and has no impact on the company's underlying profitability and cash flows, and therefore its dividend policy."
Vector's annual audit was in progress and the final results for the year would be released to the market on August 15.
- NZPA
