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Capital expenditure Capital expenditure was $488.7 million, $63.6 million (15%) higher than last year. This increase reflected ongoing investment in infrastructure to support Auckland’s continued growth, higher network replacement expenditure, and increasing deployments of advanced meters as market demand continues to accelerate in Australia. Network investment included a programme to replace and upgrade automated switching equipment in approximately 180 feeders across the network to improve circuit options to remotely restore power to customers experiencing an outage. This was one of a number of initiatives aimed at meeting quality targets and improving reliability. Re-financing and balance sheet Vector continues to maintain a strong balance sheet. Our 30 June 2020 gearing, as measured by economic net debt to economic net debt plus adjusted equity rose to 55.2% from 52.2% at the beginning of the year.
Adjusted EBITDA for Vector’s metering segment grew $16.1 million (11.6%) to $154.8 million, as a result of continued growth in advanced meter deployments in New Zealand and Australia. Capital contributions Capital contributions grew by 9.0% to $86.4 million during the year, resulting from continued connection growth and significant infrastructure development taking place across Auckland. The challenge of investing to keep pace with Auckland’s growth remains and Vector continued to review and test our pricing framework in FY20. We have adjusted our capital contributions position to reflect regulatory settings while remaining committed to facilitating these projects. Cash flow Operating cash flow was 14.1% higher at $397.3 million. This increase was largely due to a number of factors including lower interest paid, higher receipts associated with loss rental rebates, and higher capital contributions.
We successfully raised over NZ$1.1 billion of debt in the financial year, utilising both the domestic and the US markets. In one of the largest deals for a New Zealand-based entity in recent times, we secured US$500 million from the US Private Placement market for 12 and 15 years, which has allowed us to further extend the maturity profile of the Group’s debt portfolio and preserve liquidity. We remain an ‘investment-grade’ credit risk with a Baa1 rating from Moody’s and BBB from Standard & Poor’s. Dividend This year, shareholders will receive a final dividend of 8.25 cents per share imputed at 10.5%, taking the full-year partially imputed dividend to 16.5 cents per share. The final dividend will be paid to investors who are on the register at 14 September 2020 and distributed to investors on 21 September 2020.
“Capital expenditure was $488.7 million, $63.6 million (15%) higher than last year. This increase reflected ongoing investment in infrastructure to support Auckland’s continued growth, higher network replacement expenditure, and increasing deployments of advanced meters as market demand continues to accelerate in Australia.”
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Chief Financial Officer Report
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