Vector (VCT) H2 2024 earnings summary

Executive summary

• Delivered strong full-year results for the period ended 30 June 2024, with revenue up 5% to $1,242m and adjusted EBITDA from continuing operations up 14% to $365m, reflecting solid business performance and effective execution of the Symphony Strategy focused on infrastructure and technology for the energy transition.

• Net profit after tax from continuing operations was $80m, down from $102m in FY23, impacted by higher depreciation, interest, and a $60m impairment of the gas distribution business.

• Continued investment in Auckland's network and electrification, with a focus on affordability, reliability, and resilience, especially in response to extreme weather events.

• Strategic divestments included the metering business, sale of gas trading operations, and a conditional sale of OnGas LPG and a majority stake in Liquigas for $150m announced post-balance date.

• Operating cash flow rose 38% year-over-year, while gross capital expenditure remained flat at $510m.

Financial highlights

• Adjusted EBITDA from continuing operations rose 14% year-over-year to $365.2m.

• Revenue from continuing operations grew 5% year-over-year to $1,242m.

• Group net profit after tax from continuing operations was $80m, including a $60m impairment of the gas distribution business.

• Total capital expenditure reached $510m, with net capex down 3% to $315m and $195m funded by capital contributions.

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

Outlook and guidance

• Auckland electricity connection growth expected to decline in FY25 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.

• Commerce Commission's DPP4 reset decision expected in November 2024 will impact future revenue; FY25 guidance to be provided after the decision in February 2025.

• Conditional sale of OnGas LPG and Liquigas for $150m announced post-balance date; completion expected in 4-6 months.