Vector predicts higher full year profit

Power company Vector lost $5 million in the three months to March 31 as the seasonal reduction in electricity demand kicked in, but still lifted its full year profit forecast.

Vector's third quarter results published today showed a net profit after tax (NPAT) for the nine months to the end of March of $33.4 million. Previously it reported a NPAT of $38.4m for the six months to December 31.

This year's third quarter NPAT is 4.9 per cent lower than the $35.1 million for the same period a year ago.

A spokeswoman said Vector was a seasonal business, with power consumption higher in winter and lower in summer. The fall between the half-year and nine month NPAT was a normal, expected trend.

Vector chairman Michael Stiassny said Vector now expected full year NPAT to fall in a range between $43 million and $47 million, up on the full year forecast made in February with the first half results which gave a range of $38 million to $43 million.

Mr Stiassny said the increase in profit guidance came mostly from efficiencies achieved in the management of interest costs in the second half of the year.

Results continued to reflect warmer temperatures so far this financial year, he said.

Despite that, Vector had maintained a solid operating performance through prudent management of operating costs and a significant recovery in electricity distribution volumes during the three months to the end of March.

Vector said its net surplus excluding amortisation (NPATA) was $106.2 million for the nine months to March, up 41.5 per cent from the $75 million in the same period a year ago.

Revenues were up 39.6 per cent from $581.7 million to $812.2 million.

Vector expects full year NPATA to be between $142 million and $146 million.

As reported in February, net earnings reflected a $5 million benefit from Vector's earlier than expected move to full ownership of NGC, as well as increased borrowing costs and goodwill amortisation, both because of the full acquisition of NGC.

Earnings before interest, tax, depreciation and amortisation (EBITDA), up 31 per cent to $420.7 million for the nine months, remained in line with prospectus projections, Vector said.

The NGC purchase was reflected in operating revenue for the natural gas business which was $346.8 million for the nine months to March, compared to $143.7 million for the same period a year ago.

Because the current period included NGC's gas-related activities the figures were not directly comparable, Vector said.

Operating revenue for electricity was up slightly to $416 million from $412.9 million.

Shares in Vector -- 75 per cent owned by an Auckland consumer trust after a public float of a quarter of the company in August last year -- were up 2c to $2.67 in late morning trading today.

The shares have ranged from $2.46 in March to as high as $3.37 last August, against an initial public offer price of $2.38.

- NZPA