Looking ahead In December 2017, the Government outlined the draft terms of reference for the forthcoming review of retail electricity pricing in New Zealand, a review that Vector believes is timely. While the legacy generation and retail energy market framework has served New Zealand for some time, it may no longer be the best framework for a future where customers have more control over how, with whom, and when they use energy, where innovative companies may seek to enter the retail electricity market, where the impacts of climate change may impact the sector, and where technology can play a much greater role in enabling choice and control. For Vector, while we are not entirely satisfied with our half-year financial results, we have maintained good operational momentum towards our longer-term goals. We’ve introduced a number of new innovations. We’ve diversified the Group even further and explored new opportunities. We have positioned ourselves well in a number of new and emerging markets. Vector’s balance sheet remains strong, with gearing as at 31 December 2017 at 47.3%, up from 43.9% at the prior half-year. We’re proud of the fact that we have paid out almost $1.7 billion in dividends over the last 12 years and that we have added $2.2 billion in investments into electricity and gas networks over that same time. As flagged last year, the Board has been reviewing the company’s dividend policy and has now approved a new progressive policy. Vector will increase dividends by at least 0.25 cents per share annually provided the company has the financial capacity to do so. We will review this policy once the parameters for the 2020 electricity reset are established. Full details of the policy can be found at www.vector.co.nz/investors. In line with this policy, the directors have declared an interim dividend of 8.25 cents per share, up 0.25 cents on the prior year’s interim dividend of
8.0 cents per share. The record date for dividend entitlement is 28 March 2018 and the payment date is 11 April 2018. Looking ahead, we reaffirm our guidance from August 2017 for adjusted EBITDA for the full-year to 30 June 2018 to be at or around last year’s result. It’s a time of rapid change for the energy industry. We are committed to continuing to lead and to positively shaping the new energy future for the benefit of consumers, of Auckland, of New Zealand and beyond.
Michael Stiassny Chairman
Simon Mackenzie Group Chief Executive
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