Vector lifts annual earnings and dividend

New Zealand’s leading integrated energy infrastructure company, Vector Limited (NZX:VCT.NZ - News) today reported improved financial results for the 12 months to 30 June 2013.

Vector Chairman Michael Stiassny said: "Vector, a critical provider of New Zealand’s strategic energy infrastructure, has once again delivered on its commitment to the Auckland region, the national economy as well as our shareholders.

"We seek to deliver a sustainable and growing dividend to shareholders, grow our portfolio of businesses, drive operational excellence and deliver services attuned to our customers. In the 2013 financial year we met those objectives.

"The Board has resolved to pay a fully-imputed final dividend of 7.75 cents per share up from last year’s 7.5 cents per share final dividend.

"Our balance sheet remains strong, with gearing as measured by net debt to net debt plus equity at 51.1%. And, we have continued to invest in the business. Notably, we were pleased to complete the $60 million acquisition of Contact Energy’s gas metering operation. This business gives us another opportunity to leverage our internationally- recognised expertise in managing energy infrastructure."

Vector Group Chief Executive Simon Mackenzie said: "The results were lifted by growth in our smart metering business, the continuation of legacy pricing on our Kapuni gas entitlements and continued tight cost control.

"The convergence of information technology and infrastructure management technology has opened up new growth opportunities for Vector. These are now buoying our financial performance in the face of a new economic norm of patchy growth, reduced energy consumption and a challenging environment for value-enhancing acquisitions.

"Innovations such as photovoltaic cells combined with battery storage are offering a unique investment opportunity. They offer consumers real opportunities to reduce energy consumption and help us to more efficiently manage the network.

"We have made significant productivity gains through on-going operational and process changes across our business. We are one of the lowest cost providers of electricity distribution services on measures such as the cost of delivering power lines services to our customers and the average operating cost per customer.

"Unfortunately customers’ wallets are yet to benefit from these initiatives as regulation intended. From April of this year we reduced prices on our residential electricity network by 9% or the equivalent of $60 per residential customer per year. However, only in the case of a small minority of energy retailers have we seen these savings passed on to customers.

"The goal of regulation is to incentivise efficiencies in our business and we expect the gains we make to flow through to customers as regulation intended."