By Jenny Ruth
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Monday 24th August 2009 |
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On Tuesday, electricity lines and gas company Vector is likely to report a $366.6 million annual net profit including $199.1 million of one-off profits, mainly from selling its Wellington operations, says Andrew Harvey-Green, an analyst at Forsyth Barr.
Earnings before interest and tax are likely to be up 7.5% to $438 million and Vector is likely to announce a steady 13.25 cents per share final dividend, he says.
However, there is a chance the company will produce a positive surprise.
"We expect the electricity division has performed well on the back of significant price increases implemented at both 31 March, 2008 (the last re-balancing price increase for Auckland customers) and 2009 (inflation catch-up price increase)."
Those price increases will comfortably offset an expected decline in customer contributions and slightly lower volumes, Harvey-Green says.
The gas transport division should report a steady result overall. "Whilst this is the first full year of the Auckland distribution business' Commerce Commission controlled prices, the rest of the business will have had a steady year," he says
"There is potential for Vector to increase the dividend slightly but that will depend on how it views the future. We believe Vector will err on the side of caution."
BROKER CALL: Forsyth Barr rate Vector (NZX: VCT ) as accumulate.
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