Stripped-down Vector earns $48.6m

Auckland electricity network operator Vector reported a net profit after tax of $48.6 million for the six months ended September 30.

The first-half result included a gain of $7.9 million on the sale of investments, and a profit contribution of $4.3 million, before interest and tax, from its remaining generation interests. Revenue for the period was $161.8 million.

Vector, which has net assets of $963 million, has announced it will sell its interests in the Southdown and McLachlan stations.

The result is Vector's first as a network operator. Figures for the former Mercury Energy's result for the same period last year are not comparable, but last year when the company was operating an integrated lines, retail and generation business, it returned a first-half profit of $43.5 million on revenue of $310.1 million.

Vector chairman Wayne Brown said yesterday that the result was significantly ahead of budget because of aggressive cost reductions and efficiency gains achieved in the core lines business during the period.

"This profits is very satisfying, given Vector's decision to commit to a freeze on line charges for small commercial and residential customers for this current year."

Recent Ministry of Commerce analysis showed Vector's residential pricing to be the lowest of the five major centres.

Mr Brown said Vector was also achieving on other key performance requirements.

"An extensive line maintenance programme has made a positive impact on the number of power cuts experienced by customers.

"Our reliability, in average minutes lost per customer, is on target to be nearly 20 per cent better than last financial year's, which was itself a record for the company."

Vector's owner, the Auckland Energy Consumer Trust, said the appointment of a new board and management team had brought the turnaround in performance.

- NZPA