Vector Limited · NZX:VCT
Vector — H1 2012 Earnings Presentation
31 slides from Vector's earnings presentation, Feb 23, 2012
Slide 1: Financial and Operational Results
Financial and Operational Results Six months ended 31 December 2011 23 FEBRUARY 2012
Slide 2: Disclaimer
VECTOR LIMITED Disclaimer Financial and Operational Results This financial and operational results presentation dated 23 February 2012 provides additional comment on the media release and market release of the same date. As such, it should be read in conjunction with, and subject to, the explanation
Slide 3: Michael Stiassny, Chairman
Michael Stiassny Vector” Chairman
Slide 4: Agenda
Agenda VECTOR LIMITED Financial and Operational Results Dividend H1 2012 in summary Financial results Operating overview Outlook and summary
Slide 5: Dividend
Dividend VECTOR LIMITED Financial and Operational Results All dividends fully imputed Declared dividend 16 Record date 30 March 2012 13.75 14.00 14.25 Payment date 16 April 2012 12 7.25 7.5 7.5 CPS 8 4 6.5 6.5 6.75 7.0 0 2009 2010 2011 2012 FINANCIAL YEAR Interim Final
Slide 6: Simon Mackenzie, Group Chief Executive Officer
Simon Mackenzie Group Chief Executive Officer
Slide 7: H1 2012 in summary
H1 2012 in summary VECTOR LIMITED Financial and Operational Results Good financial performance, despite fickle economic conditions Good operational performance Capital structure remains strong Continued to grow and strengthen our business
Slide 8: Good performance
Good performance VECTOR LIMITED Financial and Operational Results 1,400 1,200 H1 2011 1,000 H1 2012 800 629.3 634.3 600 $MILLION 400 317.7 323.6 248.1 242.4 200 98.5 105.3 100.9 111.6 67.2 69.7 0 REVENUE EBITDA NPAT* OPERATING CASH CAPITAL INTERIM FLOW EXPENDITURE DIVIDEND 0.8% 1.9% 6.9% 2.3% 10.6%
Slide 9: Shane Sampson, Acting Chief Financial Officer
Shane Sampson Acting Chief Financial Officer
Slide 10: Income statement
Income statement VECTOR LIMITED Financial and Operational Results 2011 2010 SIX MONTHS ENDED 31 DECEMBER $MILLION $MILLION % CHANGE Revenue 634.3 629.3 0.8% Operating expenditure (310.7) (311.6) 0.3% EBITDA 323.6 317.7 1.9% Depreciation and amortisation (86.1) (83.5) (3.1%) EBIT 237.5 234.2 1.4% Res
Slide 11: Electricity
Electricity VECTOR LIMITED Financial and Operational Results 2011 2010 SIX MONTHS ENDED 31 DECEMBER $MILLION $MILLION % CHANGE Revenue 308.5 296.4 4.1% Operating expenditure (110.9) (101.1) (9.7%) EBITDA 197.6 195.3 1.2% % Revenue 64.1% 65.9% EBIT 156.9 157.1 (0.1%) Replacement capital expenditure 3
Slide 12: Gas Transportation
Gas Transportation VECTOR LIMITED Financial and Operational Results 2011 2010 SIX MONTHS ENDED 31 DECEMBER $MILLION $MILLION % CHANGE Revenue 107.1 111.5 (3.9%) Operating expenditure (25.5) (24.5) (4.1%) EBITDA 81.6 87.0 (6.2%) % Revenue 76.2% 78.0% EBIT 70.9 75.8 (6.5%) Replacement capital expendit
Slide 13: Gas Wholesale
Gas Wholesale VECTOR LIMITED Financial and Operational Results 2011 2010 SIX MONTHS ENDED 31 DECEMBER $MILLION $MILLION % CHANGE Revenue 195.4 199.3 (2.0%) Operating expenditure (159.0) (167.6) 5.1% EBITDA 36.4 31.7 14.8% % Revenue 18.6% 15.9% EBIT 28.6 25.8 10.9% Replacement capital expenditure 2.9
Slide 14: Technology
Technology VECTOR LIMITED Financial and Operational Results 2011 2010 SIX MONTHS ENDED 31 DECEMBER $MILLION $MILLION % CHANGE Revenue 48.1 42.2 14.0% Operating expenditure (13.5) (14.1) 4.3% EBITDA 34.6 28.1 23.1% % Revenue 71.9% 66.6% EBIT 13.1 7.0 87.1% Replacement capital expenditure 3.2 3.5 (8.6
Slide 15: Shared Services
Shared Services VECTOR LIMITED Financial and Operational Results 2011 2010 SIX MONTHS ENDED 31 DECEMBER $MILLION $MILLION % CHANGE Revenue 0.5 2.3 (78.3%) Operating expenditure (27.1) (26.7) (1.5%) EBITDA (26.6) (24.4) (9.0%) Gain on sale of some surplus land in the prior period.
Slide 16: Cash flow
Cash flow VECTOR LIMITED Financial and Operational Results 2011 2010 SIX MONTHS ENDED 31 DECEMBER $MILLION $MILLION Operating cash flow 242.4 248.1 Replacement capex (60.8) (57.4) Dividends paid (76.7) (75.5) Cash available for growth and debt repayment 104.9 115.2 Growth capex (63.3) (58.3) Other i
Slide 17: Asset backing and capital structure
Asset backing and capital structure VECTOR LIMITED Financial and Operational Results 31 DECEMBER 30 JUNE 31 DECEMBER 2011 2011 2010 Net debt $2,353m $2,290m $2,291m Equity/total assets 37.4% 37.9% 36.2% Net debt/net debt+equity 52.8% 52.0% 52.2% Interest (net) cover 2.8x 2.6x 2.6x NZ$50 million seni
Slide 18: Simon Mackenzie, Group Chief Executive Officer
Simon Mackenzie Group Chief Executive Officer
Slide 19: Electricity connections
Electricity VECTOR LIMITED Financial and Operational Results Connections continued to grow at 0.8% Electricity distribution 540,000 5,000 Net new connections fell 3.1% 534,305 4,800 SME connections (- 51.3%), Residential 529,997 4,600 (+19.5%) and I&C (+22.7%) 530,000 CONNECTIONS 525,972 4,400 4,359
Slide 20: Gas Transportation connections
Gas Transportation VECTOR LIMITED Financial and Operational Results Connections up 1.6% reflecting a 2% increase in Gas Distribution and Transmission residential connections 49.4 65.1 65.0 158,000 70 52.8 49.3 60 156,000 Critical contingency on Maui pipeline in October 49.1 153,576* 50 CONNECTIONS 1
Slide 21: Gas Wholesale
Gas Wholesale VECTOR LIMITED Financial and Operational Results Continue to strengthen our gas book Natural gas and gas liquids 3.5 PJ per annum gas supply from the TAG Oil 60 49.4 120,000 (NZ) Sidewinder field 50 49.3100,000 Renewed contract with Carter Holt Harvey 40 49.1 72,296 New 3 PJ p.a contra
Slide 22: Technology
Technology VECTOR LIMITED Financial and Operational Results Metering Smart Meters 350,000 Installing just under 12,000 smart meters a month 316,531 300,000 Currently contracted to install approx 700,000 smart meters 225,000 left of Genesis contract to be deployed 250,000 Signed 150,000 Contact meter
Slide 23: Regulatory timeline – last six months
Regulatory timeline – last six months VECTOR LIMITED Financial and Operational Results
Slide 24: Regulatory timeline – upcoming milestones
Regulatory timeline – upcoming milestones VECTOR LIMITED Financial and Operational Results
Slide 25: Legal arguments for appeal on solid grounds
Legal arguments for appeal on VECTOR LIMITED Financial and Operational Results solid grounds Regulatory regime should be a complete package - Starting Price Adjustment should be an Input Methodology - High Court ruled in our favour in Judicial Review Investment requires a competitive cost of capital
Slide 26: Outlook and summary
Outlook and summary VECTOR LIMITED Financial and Operational Results Pleasing business performance network volume and customer numbers growing modestly stronger wholesale gas position new smart meter contracts new contracts and opportunities for communications continued strong annual capital expendi
Slide 27: Q&A
O&A vector \/
Slide 28: Appendix
Appendix Vector \/
Slide 29: Operating statistics
Operating statistics VECTOR LIMITED Financial and Operational Results H1 2012 H1 2011 % change ELECTRICITY Customers1 534,305 529,997 0.8% Net new electricity customers 2 1,698 1,752 (3.1%) Volume distributed (GWh) 4,359 4,298 1.4% Networks length (km) 17,768 17,705 0.4% SAIDI3 Normal operations (mi
Slide 30: Operating statistics
Operating statistics VECTOR LIMITED Financial and Operational Results H1 2012 H1 2011 % change GAS WHOLESALE 6 Natural gas sales (PJ) 14.3 14.1 1.4% 7 Gas liquid sales (tonnes) 41,850 42,535 (1.6%) 8 Liquigas LPG tolling (tonnes) 61,126 72,296 (15.5%) TECHNOLOGY 1 Electricity: smart meters 316,531 1
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