Vector result provides bright spot

Energy company Vector Ltd provided a bright spot for investors yesterday when it reported an improved interim result for the six months ended December 31.

The company kept its interim dividend at last year's level of 6.5c a share, after reporting earnings before interest, tax, depreciation and amortisation of $313.2 million, up from $281.5 million in the previous corresponding period (pcp).

Earnings from continuing operations fell slightly to $609.5 million from $611.2 million.

However, it was the words of group chief executive Simon Mackenzie which would have given investors, and the market in general, some hope for the future.

Mr Mackenzie said Vector was "well positioned" for the future and financially strong enough to take advantage of opportunities that arose.

He stressed that the company would not be complacent given the current economic environment.

"The continued uncertain business environment in New Zealand means we are all navigating uncharted waters. Despite this, the board and management remain cautiously confident that the company's end of year financial results will be above analyst's expectations.

"Beyond that, we can only speculate how the economic conditions will impact the business."

The board believed that actions taken over the last 18 months had strengthened the company's position in the first six months of the current financial year and would continue to do so.

The net profit after tax from continued operations was $90.8 million compared to $77.4 million in the pcp.

The continuing operations resulted excluded the results from the Wellington network in both periods and excluded the gain on sale.

The company settled the $785 million sale of its Wellington network in July 2008 and as a result, realised a gain on the sale of $202.9 million.

Mr Mackenzie said the company's balance sheet had been considerably strengthened by the repayment of $560 million of debt, with a further repayment of $200 million of fixed interest rate bonds scheduled for March 4.

At the same time, the company had renegotiated banking facilities totalling $275 million during the period.

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