WEL Networks doubles its full-year profit

WEL Networks more than doubled its fullyear profit as expansion of its fibre business boosted revenue and growth in the Waikato region increased residential connections and commercial volumes.

Net income rose to $31.5 million in the year ended March 31, from $13.4m a year earlier. Revenue increased by $35m to $210.6m, with electricity network revenue $13.4m higher at $134m, fibre revenue $14m higher at $67m, and other revenue — mostly from the Opunake Hydro business it acquired a controlling stake in — $7.7m higher at $9.6m. Operating expenses were $1.7m higher at $95.6m.

Chair Rob Campbell attributed the improved result to higher commercial lines consumption, customer growth in the fibre network and strong urban development in the Waikato. Third-party contributions to the power network’s development climbed to $9.9m, from $8m the year before.

Hamilton-based WEL is the country’s sixth-largest power distributor, supplying about 92,800 homes and businesses. It added almost 1400 new power connections in the year through March.

Yesterday the firm noted that net debt increased by about $65m to $542m at the end of March, with the increased borrowings due to the UFB2 build and the subsequent UFB extension programme. Total assets stood at $1.2 billion, a $91m increase in a year.

The accounts show earnings before interest, tax, depreciation and amortisation from the electricity network increased to $71.06m, from $57.3m a year earlier. Fibre earnings rose to $39.6m, from $28m.

WEL has $150m of bonds listed on the NZX's debt market, last trading at a yield of 3.55 per cent.