Vector profit jumps 55 percent as new pricing rules fund record network investment

Vector, the leading electricity and gas distributor in Auckland, has announced a substantial 55 percent increase in annual profit, reaching $240.2 million for the year ending June. This surge in profitability comes after the company adapted to the new electricity pricing rules, which came into effect following the Commerce Commission's latest distribution pricing reset.

Revenue from their electricity business grew by 18 percent, hitting $905 million, while natural gas distribution revenue saw a modest 2 percent increase to $69 million. However, the number of gas connections decreased slightly, dropping 0.5 percent to nearly 120,000 connections. Despite the overall profit growth, the company continued to invest heavily in its Auckland network, allocating a record $512 million to expand and modernize the infrastructure.

This investment aimed to accommodate a rapidly growing population and the increasing demand for electricity as the city embraces electric vehicles, solar power, and other emerging technologies. CEO Chris Blenkiron attributed the strong results to a focus on customer outcomes, safety, and the efficient management of financial performance.

The board has decided to distribute a final dividend of 13.5 cents per share, boosting the annual dividend payout to 26 cents per share. Looking forward, Vector anticipates adjusted EBITDA between $540 million and $560 million for the fiscal year 2027, with capital expenditure projected to rise between $605 million and $635 million.