Vector profits up 10pc - tougher half ahead

Mercury Energy is cutting its prices to Auckland customers by 1.5 per cent from April 1. Photo / File

Lines company Vector has reported an improved net profit of $118 million for the six months to December 31- up 10.8 per cent on the same period a year earlier.

Revenue rose 5 per cent to $669.4 million.

Chairman Michael Stiassny said the result was a good one in context of the "new economic norm" the country was facing.

Read Vector's release here.

"Economic growth is soft; our customers want to reduce the amount they spend on energy and the amount they consume," he said. "However, this result demonstrates how we have continued to grow...It also shows our success at optimising the group's portfolio of businesses, lowering our risk profile in response to the new environment and containing costs."

The company's balance sheet remained strong although the opportunities for value enhancing acquisitions were limited, he said.

While 2013 had started well there were head winds expected in the second half, chief executive Simon Mackenzie said.

"The regulator's mandated price reductions on our electricity networks from 1 April will weigh on second-half revenues," he said. "And notwithstanding the signs of a recovery in the Auckland building and construction sector, the economy remains soft and customer energy demand remains subdued."

Meanwhile entitlements to Kapuni Gas at the legacy prices would continue to reduce, he said.

Mackenzie reiterated earlier guidance that operating earnings (ebitda) for the full year to June 30 would be in line with 2012.

Vector has declared it would pay a fully imputed interim dividend of 7.25c per share - up from 7c per share.

-NZ Herald