UnitedNetworks optimistic on year ahead

By Phil Boeyen, ShareChat Business News Editor

Friday 1st February 2002

Network distribution company UnitedNetworks (NZSE: UNL) has delivered a higher profit from lower sales, touting efficiencies from its electricity business and a growing gas market.

The Auckland company, which is majority owned by US-based Utilicorp United, reported a net surplus Friday of $120.8 million for the year ended December, a 10% increase on the previous $109.3 million.

Sales for the year were $449.33 million, slightly down on the previous year's $452.81 million, however earnings per share rose to 79.7 cents from 72.2 cents the previous year.

Chief executive, Dan Warnock, says the result reflects the company's strategy of investing in networks and selling assets that were not compatible with its business focus.

He says the company's electricity business continued to drive improved efficiency and service levels, resulting in the lowest service delivery costs in New Zealand. The company has also continued to grow residential and commercial gas connections.

"This business has been characterised by uncoordinated efforts between various suppliers within the industry, and low customer awareness about natural gas and its benefits. We have focused on turning this around, and making gas more accessible and desirable to the consumer."

The company has launched a branded gas marketing and customer education campaign and is looking for even greater market penetration and demand in the current year.

UnitedNetworks Communications business was also launched last year, using its pipeline networks to deliver broadband access to the Auckland and Wellington CBDs.

"Our competitive advantage lies in our network which is low-cost, extremely reliable, open-access and ultra-high broadband," Mr Warnock says.

"We believe the focus in 2001 on developing and supporting retail partnerships and educating the market on broadband applications will be a solid platform for growth in 2002."

UNL's board has declared a fully imputed final dividend of 18 cents per share, bringing the year's total to 35 cents, two cents higher than the previous year.

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