Vector (VCT) H1 2025 earnings summary

Executive summary

• Half-year results to 31 December 2024 show strong growth in continuing operations, with revenue up 11% year-over-year and adjusted EBITDA rising 16% to NZD 202 million, while net profit after tax for continuing operations increased 50% to NZD 118 million.

• Net profit for the group was $125.4 million, up from $26.0 million in the prior year, driven by core operations and asset sales.

• The CEO will step down at the end of June, following a long tenure and significant industry contributions.

• Sale of gas trading, LPG, and Liquigas businesses completed, with discontinued operations excluded from core results.

Financial highlights

• Revenue from continuing operations rose to $560.5 million, with adjusted EBITDA for the group at $213.6 million, up from $192.0 million year-over-year.

• Net profit from continuing operations was $118.1 million, up from $18.9 million year-over-year; discontinued operations contributed $7.3 million.

• Gross capital expenditure for continuing operations increased 12% to NZD 261 million; net CapEx after capital contributions decreased 3% to NZD 138 million.

• Capital contributions surged 32% to NZD 123 million, mainly from new data centres, a major KiwiRail project, and system growth.

• Interim dividend of 12.00 cents per share declared, with new policy targeting 70%-100% of free cash flow.

Outlook and guidance

• FY 2025 guidance: Adjusted EBITDA expected at NZD 400–415 million, gross CapEx at NZD 495–525 million, and capital contributions at NZD 215–245 million.

• The company is entering the final phase of the DPP-3 regulatory period, with DPP-4 starting 1 April 2025, marking a new five-year regulatory cycle.

• Regulatory consultations on connection pricing and network projects may affect customer contribution levels and connection efficiency.