22 Feb 2013

Vector's earnings, profit higher

7:21 am on 22 February 2013

Energy distributor Vector has reported a lift in earnings due to price rises and costs being kept in check.

The Auckland-based company made a profit of $118 million in the six months to December, an increase of 11% compared with the same period a year ago.

Operating earnings rose 4% to $336 million due to increased electricity and gas network charges, and costs being contained, which offset weaker demand due to warmer weather and subdued economic activity.

Vector says it expects full year underlying earnings to be similar to last year's $627 million.

Chief executive Simon Mackenzie said demand remains muted due to warmer weather and subdued economic activity.

He said customers are actively seeking to reduce their energy bills and manage their costs.

The company is 75% owned by a consumer trust and runs an electricity network in the greater Auckland region, a national gas pipeline network and electricity meters. It is expanding to fibre optic telecommunications.

Vector is battling the Commerce Commission in court over what it can charge. It will be forced to cut its power line charges by an average 10% from April, make further cuts next year and cut gas charges between 16 - 25%.

The company will pay shareholders a higher dividend of 7.25 cents a share.

Shares closed up 2 cents to $2.85 each on Thursday.