Vector (VCT) H2 2024 earnings summary

Executive summary

• Adjusted EBITDA from continuing operations rose 14% year-over-year to NZD 365.2 million, reflecting strong business performance and effective execution of the Symphony Strategy focused on infrastructure and technology for the energy transition.

• Group net profit after tax from continuing operations was NZD 79.9 million, including a NZD 60 million impairment of the gas distribution business; underlying profit excluding impairment was NZD 139.9 million.

• Revenue increased 5% year-over-year to NZD 1,242 million, with operating cash flow up 38% and gross capital expenditure at NZD 510 million.

• Strategic divestments included the sale of the metering business, natural gas trading operations, and the conditional sale of OnGas LPG and a majority stake in Liquigas for NZD 150 million.

• Progress made on carbon emissions reduction, climate resilience, and digital initiatives as part of the Symphony strategy.

Financial highlights

• Adjusted EBITDA from continuing operations rose 14% year-over-year to NZD 365.2 million.

• Group net profit after tax from continuing operations was NZD 79.9 million, including a NZD 60 million impairment of the gas distribution business.

• Total capital expenditure reached NZD 510 million, with NZD 195 million funded by capital contributions.

• Operating cash flow increased 38% year-over-year.

• Final dividend of NZD 0.13 per share and a special dividend of NZD 0.0175 per share, bringing the full-year dividend to NZD 0.24 per share.

Outlook and guidance

• Auckland electricity connection growth expected to decline in FY 2025 to around 12,000, with gas connection growth uncertain due to natural gas shortages.

• Price increases for customers anticipated in the new regulatory period, to be smoothed over five years to avoid price shocks.

• FY 2025 guidance will be provided in February 2025 after the final regulatory decision by the Commerce Commission, expected in November 2024.

• Dividend policy will be reviewed after the regulatory reset outcome.

• Focus on energy transition and technology solutions following the sale of gas trading businesses.