Gas network boosts UNL full year

By Phil Boeyen, ShareChat Business News Editor

Friday 2nd February 2001

Restructured electricity lines company, UnitedNetworks (NZSE: UNL), is picking growth of 5-6% in the coming year following its full year profit result of $109.3 million.

The profit for the year to the end of December compares with $96.8 million last year.

Revenue grew to $453 million from $321 million last year primarily as a result of the company's purchase of the Orion Gas Distribution business last April.

UnitedNetworks paid $550 million for the gas network.

CEO DanWarnock says the latest result confirms the success of the company's restructuring, acquisition and growth initiatives as it moves from an electricity lines company into a high performing network infrastructure company with electric, gas and fibre optic networks.

"We will grow earnings by around 5% to 6% over the next 12 months," he says.

The company's most recent growth initiative - a project to provide ultra-high bandwidth fibre optic networks to the Auckland and Wellington CBDs - will be operational later this month.

Mr Warnock says as well as its move into the telecommunications business the company is also looking for solid growth from its gas business.

"We will grow the gas business by around 5% over the next 12 months as we implement improved business processes, focus on efficiencies and reducing costs, secure high yielding commercial customers, increase residential connections and promote dual electricity and gas use."

UnitedNetworks says it has gained substantial synergies and economies of scale from integrating three separate electricity networks and in 2001 will focus will be on improved customer service.

It will also look to enhanced performance through "state of the art" technology and the outsourcing of its contracting business.

A final fully imputed dividend of 17 cents per share has been announced taking the total year's dividend to 33 cents, a 10% increase over last year.

UnitedNetworks is 79% owned by US company Utilicorp United. The UnitedNetworks Shareholders' Society holds another 10% with the remainder in the hands of around 21,000 private shareholders.

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