Vector expecting gains from budget

Energy distribution and fibre optic network company Vector is estimating a rise in after tax net profit of $20 million in the year to June 30 as a result of tax changes in the budget.

Vector today said it had recently received advice from its external auditors on the appropriate accounting treatment for the tax changes.

The deferred tax liability reduced and as a result that increased reported net profit after tax by an estimated $21m for the year to the end of June, Vector said.

The deferred tax liability adjustment was a one-off, non-cash accounting entry and had no impact on Vector's underlying profitability and cash flows, and therefore its dividend policy.

A move in the budget to make capital contributions taxable from May 20 would reduce net profit after tax for the 2010 financial year by an estimated $1m.

- NZPA