19 Feb 2009

Vector expects to exceed profit expectations

11:37 am on 19 February 2009

Electricity lines company Vector is cautiously confident it will make a full-year profit of more than $568 million.

The company boasted a four-fold increase in its half-year profit, due to the sale of its Wellington electricity network.

Excluding that sale, the Vector's half-year profit rose 17% to $90.8 million.

Chief executive Simon Mackenzie says the full year profit depends on how the economic downturn affects demand, while the longer term outlook depends on factors such as the cost of financing and debt.

He says energy demand from large commercial and industrial customers has fallen 2.5% and from residential customers by about 0.5%.

However Mr Mackenzie says the result so far has been steady and the company is cautiously confident its profit will be above current analysts' expectations.

Meanwhile, the company has set out a proposal to Government to build a high-speed broadband network in the country's main centres.

Mr Mackenzie says the company is waiting to hear how the government plans to distribute its broadband fund, and whether the company is chosen.

He says under Vector's proposal, the Government would not need to dig too deep into its pockets as the company would fund most of the project, paying up to $1 billion in total.