Vector reported a 75 percent drop in net profit for the six months ended December (file picture). Photo: RNZ
The lines companies Vector and Chorus have reported a drop in first half net profit despite modest increases in top line revenue, with each looking to the Commerce Commission for a decision on regulated lines charges.
Telecommunications lines company Chorus reported a 44 percent drop in net profit to just $5 million, against a 3 percent increase in revenue to $501m, with an interim dividend of 19 cents per share.
The Auckland energy lines company Vector reported a 75 percent drop in net profit for the six months ended December to $24.5m, with a 2 percent rise in revenue to $571.1m, with an interim dividend of 9.25 cents per share.
"Underlying net profit after tax was up 29 percent on the prior period, however the reported group net profit after tax was $22 million as it includes a $60m impairment of our gas distribution business," Vector chief executive Simon Mackenzie said.
"This impairment was driven by the Commerce Commission's regulatory decision to lower future returns to owners of gas distribution networks, and interest rate changes."
Mackenzie said a decision by the Commerce Commission on its proposed expenditure was critical to enabling investment in Auckland's electricity network for growth, reliability, decarbonisation and climate resilience until 2030.
The commission will decide on the allowable revenue Vector can charge on its regulated electricity business from 1 April 2025, which will then be set for the next five years.
Chorus chief executive JB Rousselot said its bottom-line had been hit by the shift away from copper, and increased interest rates.
"Over the last 12 months, copper connections dropped by 94,000, and fibre grew from 78 percent of Chorus' connections to 85 percent," Rousselot said.
"This shift has seen network fault volumes drop by 15 percent, and we expect these fault volumes to fall further as we look to fully retire copper in urban fibre areas by the end of 2026."
Chorus fibre connections grew by 31,000 to 1,062,000, while the number of premises passed by fibre grew to 1,493,000 addresses.
"Our objective remains to achieve 80 percent fibre uptake, and we are continuously refining our active wholesaler strategy to help achieve this."
Chorus was also awaiting the Commerce Commission's draft decision of its next four-year regulatory period, which begins in January 2025.
Chorus said the total expenditure proposed for the period is approximately $1.3 billion.
Rousselot, who has served as Chorus's chief executive since November 2019, will step down from his role on 15 April, when chief operating office Mark Aue steps into the role.