Vector Stock

Good morning, everybody. Welcome to Vector Limited's conference call and webcast to discuss the company's financial and operational results for the full year ended 30 June 2026. [Operator Instructions] I must advise you that this conference call is being recorded today.

I would now like to hand you over to Vector's Chair, Doug McKay, who will take you through the call. Please go ahead, Doug.

[Foreign Language] Good morning, everyone. I'm Doug McKay, Vector's Chair. Today, we'll be going through Vector's financial and operational results for the full year ending 30 June 2026. Joining me on the call are Group Chief Executive, Chris Blenkiron; and Chief Financial Officer, Jason Hollingworth.

We'll begin with an overview of the year, then cover the detailed financial and reportable segment results, our investment in Bluecurrent, the outlook for fiscal '27 and then the final dividend. After that, we'll open up the call for questions. But for now, I'll hand over to Chris to start the presentation.

Thank you, Doug, and good morning, everyone. FY '26 has been a year of strong financial performance. We've maintained a disciplined approach to capital allocation. We're sharply focused on delivering the services and experiences our customers expect and deserve and we're delivering for our shareholders. We've had a record year of capital investment in the electricity network. We've done this while continuing to be very deliberate about when and where we invest so that we can build a safe, reliable and future-ready network while minimizing the cost impact to our customers. Overall, the picture ahead is that Auckland has an opportunity to power more of its economy with affordable, reliable electricity, and Vector's network is essential to making that future possible.

I'll now move on to an overview of our group level financial results for the year. To set the scene for these results, a higher revenue allowance for electricity distribution businesses applied for the full 12 months of these results compared with only 3 months in the previous financial year. This higher revenue was set by the Commerce Commission from the first of April 2025 as part of the DPP4 reset. This led to revenue from continuing operations increasing by $111 million or 12% to just over $1 billion. The higher revenue flowed through to adjusted EBITDA of $482 million, up $81 million or 20%. Net profit after tax increased by $86 million or 55% to $240 million.

During the year, our investment into Auckland's electricity network was our highest ever reported in the financial year and exceeded $0.5 billion. Gross capital expenditure for the group increased by $74 million or 16% to $544 million. And finally, our operating cash flow increased by $117 million or 23% to $633 million, and this was driven by the higher adjusted EBITDA.

I'll now hand you over to Jason.

Thanks, Chris. I'll begin with the drivers of adjusted EBITDA, net profit, capital investment and the balance sheet. I'll then take you through the performance of our Electricity and Gas Distribution segments, followed by our investment in Bluecurrent. This slide shows adjusted EBITDA for continuing operations increased by $81 million to $482 million in FY '26. The increase was driven by the Electricity segment, which contributed an $88 million uplift. Gas Distribution was flat year-on-year, and the Other adjusted EBITDA was $8 million lower due to a $9.3 million loss on the sale of HRV.

The main driver of earnings growth, as Chris has said, was a higher DPP4 revenue allowance for the electricity distribution business applying for the full period of these results, whereas the higher allowance was in place for only a quarter in the prior year. Other remains a non-reportable segment, and that includes VTS, HRV, Vector Fibre, Equalise and also some group eliminations.

I'll now move to net profit after tax. NPAT from continuing operations increased to $240 million, up $82 million on the prior year. The largest positive driver was the increase in adjusted EBITDA, and this was partially offset by lower capital contributions and higher net interest. A key difference year-on-year is that FY '25 included a $37 million impairment of the Gas Distribution business, and there was no impairment in FY '26. Overall, the increase in NPAT reflects the stronger earnings performance, together with the absence of the Gas impairment recognized in the prior year.

And I'll now move to capital investment. Gross capital investment increased by $74 million or 16% to $470 million -- from $475 million in FY '25 to $544 million in FY '26. Electricity CapEx accounted for the majority of the movement, increasing from $432 million to $512 million, which is a record amount of capital invested under the electricity network in a single year. Within that, the electricity growth CapEx increased by $16 million, while electricity replacement CapEx increased by $62 million. Gas Distribution CapEx was down $5 million, and other CapEx was down $1 million. Net CapEx increased from $260 million in FY '25 to $353 million in FY '26 due to the higher gross CapEx and also lower capital contributions at $191 million in FY '26, down from $211 million in FY '25.

I'll now move to the balance sheet. Vector continues to maintain a strong balance sheet. Our Standard & Poor's credit rating remains at BBB+ with a positive outlook. Our economic net debt at June '26 was up $120 million to $2.28 billion, with gearing at 39%.

I'll now move to the segment performance. We start with Electricity. Electricity adjusted EBITDA increased by $88 million or 25% from $352 million in FY '25 to $440 million in FY '26. Revenue increased by $141 million, driven by the impact of the DPP4 reset, which included $38 million of the -- from the net impact of the DPP3 inflation washups and IRIS penalties. Pass-through costs increased by $31 million, with the increase linked to the new reset period for Transpower. And these costs are recovered through revenue. Other OpEx increased by $22 million, linked to the increased maintenance activity and also higher digital costs. Total electricity connections continue to grow, increasing 1.6% to 642,134.

And then to Gas Distribution. Gas Distribution adjusted EBITDA was flat at $47 million. Revenue was slightly higher, but this was partially offset by higher costs. Gas volumes were down 1.7% on the prior year, with lower demand across all sectors. And total gas connections decreased by 0.5% on the prior year to 119,991. The gas market remains an area of ongoing uncertainty and we continue to manage the business prudently, having moved from investing CapEx to spending more on maintenance where we can to maintain safety, reliability and long-term customer outcomes.

I'll now move to Bluecurrent. Our investment in Bluecurrent continues to perform well. Our revenue, EBITDA and cash available for distribution were all up on FY '25. [ And get ] equity accounts is 50% investment in Bluecurrent. So while Bluecurrent earned $222 million of EBITDA in FY '26, the company reported an accounting loss of $43 million due to depreciation costs, interest costs and also the amortization of intangible assets.

Vector recognizes 50% of this loss in its P&L. Bluecurrent is currently debt funding the rollout of its new meters, which means surplus operating cash flow is available to be distributed to shareholders each year. Bluecurrent's net debt increased from $1.391 billion to $1.59 billion over the year, and that was due to the rollout of new meters, mainly in Australia.

In FY '26, Vector received $55 million in distributions from Bluecurrent, and that was up by $3 million on FY '25. These distributions comprise $10.2 million of interest on a shareholder loan provided to Bluecurrent Australia; $12.1 million of principal that was repaid on this loan; and we received $32.6 million of dividends. The net book value of our Bluecurrent investment was $580 million at year-end. This net book value was reduced over the year due to the recognition of our share of the joint venture's loss, the dividends we received and an increase from the net movement in the shareholder loan balance due to an FX gain.

I'll now hand back to Chris to cover the outlook.

Thank you, Jason. As with FY '26, we are providing guidance on adjusted EBITDA, gross CapEx and capital contributions for H' 27. Adjusted EBITDA is forecast to increase on FY '26. The DPP4 decision set out a path of increasing revenue in each year of the 5-year period. Our forecast for FY '27 is consistent with this and includes recovery of an additional net $54 million of revenue wash-up and IRIS adjustments. We're also forecasting an increase in gross capital expenditure, and we'll likely see another record year of investment into the electricity network.

The primary driver of the increase is higher levels of replacement CapEx. This is important because it reflects how we're investing more to ensure the network remains reliable and resilient as Auckland continues to grow and electrify. Importantly, we're focused on balancing these investments with affordability. We're very disciplined on when and where we invest to deliver the network our customers need while minimizing the cost impact.

Customer-driven activity is expected to be broadly in line with FY '26, although the guidance range for capital contributions is lower, noting contributions can vary substantially depending on the timing of major customer project connections. For FY '27, the guidance range is adjusted EBITDA of $540 million to $560 million, gross CapEx of $605 million to $635 million, capital contributions of $160 million to $190 million.

Before I hand back to Doug, I'd like to thank all our people, including our field service providers and call center teams, for their enormous work throughout the year. I would also like to acknowledge our customers, our partners and stakeholders as we continue to invest in the network and support Auckland's growth and electrification.

I'll now hand back to Doug.

Thank you, Chris. I'll now cover the dividend. The Board has determined a final dividend of $0.135 per share with no imputation. This brings the full year dividend to $0.26 per share. The dividend record date is 9 September 2026, and the payment date is 21 September 2026.

Chris, Jason and I are now happy to take any of your questions.

[Operator Instructions] Your first question comes from [ Joshua Dale ] and Craigs Investment Partners.

[ Lillian ], thank you for the presentation, and well done on a solid result. I have a handful of questions. So it was helpful to see the split out of Bluecurrent distributions. One thing I noticed was the weighting to dividends was quite high in FY '26. And the loan repayments were much lower. So 2 questions on that. What does the pace of that shareholder loan paydown look like in the future? And is this now a permanent shift into dividend receipts for you from Bluecurrent?

Joshua, there were originally 2 loans for Bluecurrent, 1 into New Zealand and 1 into Australia. And the New Zealand loan has been repaid, so we will now be receiving dividends out of New Zealand. The loan in Australia is probably going to take over 5 years to repay, based on current forecast. So we'll continue to receive interest and principal repayments out of the Australian business.

That's helpful. And distributions from Bluecurrent obviously increased by $3 million, $255 million for FY '26. Is that about the right increase to assume in FY'27?

It reflects the deployment of meters. So I think if they continue to deploy meters at the current rates, you would expect that to broadly follow that trend.

And that it might be a bit of a hard question to answer, but the metering market in Australia and New Zealand is obviously somewhat finite, and there's probably an upper limit as to what Bluecurrent's revenue in EBITDA could be at some point in the future. Is there any sense, I guess, as to when you might start to approach that limit of full market penetration and the time frame over which that might play out? I appreciate your competitors are obviously in the mix as well.

So the Australian market is moving to a 100% rollout of smart meters by 2030. So that's the sort of time frame there. The New Zealand market though, that's been highly penetrated for quite a while now is still growing because people are still connecting to the electricity network. So there's always that underlying growth of new connections that will continue. So not at the rate that you see when you're rolling out smart meters, but we continue to have growth.

We've also deployed smart gas meters into the New Zealand market successfully. And Bluecurrent are looking at trying to push smart gas meters into the Australian market, so there's an opportunity there. And there's also opportunities in smart water metering, which is not a whole segment that is available potentially to Bluecurrent. So there are still growth opportunities for that business going forward outside the current sort of smart electricity metering rollout in Australia.

Okay. And just last 2 questions, hopefully, easy ones. First, imputation. Obviously, there's none at the moment. I think you signaled we might expect to see some from FY '28 onwards. Is that still the case? And I guess, any sense of level would be helpful and perhaps timing around when you may get to full imputation?

You'll see that in our balance sheet, that our tax asset is now our current tax asset. So that's tells you that we're going to use it up in the next 12 months. So that's -- that will be the end of that, and then we'll start paying cash tax towards the end of FY '27. Not a huge amount, I don't think. So we'll really be starting to become a taxpayer in FY '28.

We'll never get to -- based on our forecast, we'll never be fully imputing our dividends, but we'll be imputing a portion of them as we pay tax. So not a lot happening in this financial year, but we should expect to start seeing a level of imputation in FY '28.

Okay. Last one. You've obviously tested the market with your fiber business. What happens to it now? Are you just sitting on that for now?

Yes, Josh, it's Chris. Yes. We've decided we're the best owner for the fiber business. Obviously, it's got an exciting growth curve ahead of it. Actually, if you look at data centers, if you look at 5G. So we weren't short of people interested in that business, but we decided that we're the best owner. And so now going forward, they've got a lot of opportunity in front of them in the market, which I know the team is pretty pumped about actually, and they're getting after it.

Your next question comes from Andrew Harvey-Green and Forsyth Barr.

A couple of questions from me. First of all, I think you've been running a bit of a strategic review over the last few months. Chris and Doug, just a question, I guess, in terms of progress on that and timing and sort of what we might expect to see from that in due course?

Yes, Andrew, that's something we're just in the sort of final throes of working through. I think to give a flavor, I mean, the focus very much on the efficiency and sort of the disciplined execution. And I guess you saw a bit of that through the capital program that we talked about through the results just now. So there's a big focus on making sure that, that part has transformed and operating as well as it can be into the future. There's a large program of work ahead.

But we're also having a look at the energy transition, what role that we should be playing in that Auckland needs to electrify the country needs to electrify. So we're looking at that. But we'll probably have a little bit more to say at that probably towards the shareholder meeting in September. So we're just working through the final parts of it now.

It's Doug here, Andrew, I'll just add to that. We've got a lot of growth opportunity in front of us. So it's all very positive in terms of what our future strategy will be. I'd also say it's going to be much closer to our core business operations than the previous step-outs into other activities, which we've been cleaning up from for the last 3 years. So we've now bottomed the cleanup pretty much, made the strategic decision to keep going for growth in fiber as part of that review. But now we're clean slate where we've got a complete strategy that we've been working our way through testing various hypotheses. And we're almost there, almost there, and we will speak more to that around the AGM. But there is no shortage of growth opportunities in our part of the sector or the industry.

Yes. And the only other question I really had, I guess it's probably more for Jason, just around the S&P rating and noting you're on that positive watch. I mean, is it something that you're wanting to pursue as a credit rating upgrade? Or is it more gracious, if it happens, it happens?

I think it would be good, Andrew, because obviously, it would make our debt costs lower. We do have some refinancing to happen over the sort of next 12 to 18 months. So again, it's really an S&P call, I think. So we will -- we have an annual cycle with them. We'll be presenting them with some updated information in the next month. And release up to them, will they maintain that positive outlook or move on that.

Your next question comes from Phil Campbell and UBS.

Just a couple for me as well. I suppose just the first 1 was just, I think, recently, there was a ComCom letter under Section 36 of the Commerce act on connections. Just wondering if you had any kind of views on potential impact of that?

We're engaging with ComCom actively on many fronts. The EA is currently also speaking about connections and balance point and the like. There's various angles that Commerce Commission looking at the moment and the EA that we're actively engaging with. And I think it's a positive thing. One of those angles is around distributed generation. It's another thing that we're actively looking to work with our customers on and open up to. So nothing really in terms of material impact for us. We'll keep working through them. And if we need to, we can update later on.

Awesome. Second one was just on the CapEx guidance. Obviously, it looks though it's a bit higher than what was in the [ AMP ]. And is that mainly due to replacement? I'll just be interested in kind of reconciling that guidance with the AMP.

Yes, it is slightly higher than the AMP for this year, Phil. So -- and there is a lot of replacement CapEx, as I think we mentioned in that slide. So again, there are some larger projects, some of it just the timing of things. So we will try and deliver the AMP over the 5-year period, but yes, this year is slightly higher.

Right. And then I haven't had time to calculate. I just wondered what the dividend payout ratio was under your formula on the $0.26?

At the bottom of that payout range of 70%. Which I think we signaled at last year.

Yes, that's right. I suppose will we get a bit more of a color in terms of what potential kind of guidance on the payout ratio when you've done your strategic review at the AGM? Or will that be included within that? Or is it just going to be more about the growth opportunities?

Yes. We haven't turned our mind to the payout ratio at this stage, Phil, for next year. We've been focused on what this year should be. But as you can see from the tenor of our conversation this morning and some of our written commentary, we have a lot of growth opportunities and we need a lot of CapEx. So we're being very conservative at the moment in the way we're thinking about where we fall in that range.

And it could well be that we continue to be very conservative. I certainly wouldn't be encouraging anyone to push up into the upper half of that range, nothing like that because we need a lot of access -- we need access to the capital for our growth in replacement.

[Operator Instructions] Your next question comes from Stephen Hudson and Macquarie Securities.

Just a couple from me. Just firstly on capital contributions. I just wondered if you can give us a bit of flavor for what you're seeing out there? You were obviously forecasting a reasonable dip this year.

Yes, it's pretty steady. But obviously, we won't go into the specific projects and the commercial nature of them. But I mean, we're seeing a pretty steady flow. But as you can imagine, some of the big projects can really swing that around as I sort of signaled in terms of the guidance. But in terms of activity, it's pretty steady.

Okay. And just coming back to the payout ratio, you've sort of got quite a specific definition of cash flow available for distribution. And it's different, I think, to what you used to use as a free cash flow payout definition. If we were to assume sort of the dividend climbs by cents per share in line with the dividend trend slide that you've got on Slide 17 here, what would the traditional free cash flow payout ratio look like at the end of DPP? For Jason. So leaving aside your company-specific definitions and just using the old traditional stay in business CapEx.

Look, I don't know, Stephen, off the top of my head. What would you -- I don't know, Stephen, off the top of my yen, maybe to look at it that yes, I can't do that calc sitting here, I'm afraid.

I suppose it's sort of quite important account because you've got a -- on the traditional government, your free cash flow payout, you're actually paying out more than your traditional free cash flow. That's over 100%. And so -- but we understand that you're growing into that through the DPP for smoothing in? Do you think it would be under 100%, I suppose, is the question? By the time 2030 rolls around?

Yes. Look, I just don't know. I guess we've got a policy that we've been -- that we forecast against and that takes account of the reset and takes account of our current balance sheet. So I guess I'm used to thinking of it in net terms rather than sort of going back to how we used to measure things. And I think our old policy was more of a progressive policy, right, where the dividends went up at a certain rate each year rather than a specific sort of payout percentage or anything, so it's quite different.

The 2 components -- Doug McKay here, Stephen. The 2 components of a percentage of cash flow, 70% to 100% of cash flow and 75% of CapEx is debt funded. There are the guide posts at the moment. It's -- I'm not saying that will be the guidepost forever. In fact, there could well be a need to revise our dividend policy at some point in the next few years, particularly as we land our strategy and we start to understand the capital -- the CapEx implications of that. But we'll be more transparent about that when we finished that work by the time we get around to our AGM.

Yes. Okay. That's useful. Just 1 final one. Doug, you talked about -- you've got a lot of prospective growth and projects in front of you. Can you give us a bit of a flavor for where and what they are?

I can broadly do that. But if -- I won't go into too much detail because it is part of our strategy work and we need to land it. But the whole electrification -- the [ quartile ], the stats I like to you, Stephen, on this 1 is people bandy around that we're at 92% or 97% renewable on our electricity generation, whatever that number is, but you know what I'm saying. But we're only 34% renewable in total energy in New Zealand.

And when you look at the impact of lifting, say, from 34%, which broadens the definition to vehicles and transport and a whole lot of other things. But when you lift that number from 34% to say, 60% to 65%, the opportunities for savings for our consumers and our customers are very significant. Plus we've got the ongoing uncertainty around gas supply in New Zealand. So there's a dramatic uptick in inbounds for us on electrification and how can we help our customers with that.

And both retail and industrial customers are finding that quite a complex process to navigate. You've got to have a lot of technical knowledge. So yes, you think about the implications for electrification. That in itself is a major growth opportunity for a business like ours.

There are no further questions at this time. I'll now hand back to Mr. McKay For closing remarks.

Thank you. So if there are no further questions, we'll end the teleconference and the webcast. If analysts and investors have further questions, then please contact Jason. If media have any follow-ups, please contact Matt Britton or call our usual media phone number. Thank you, everybody, for your interest and for joining us.

Good morning everybody. Welcome to Vector Limited Conference Call and Webcast to discuss the company's financial and operational results for the half year ended 31st December 2025. [Operator Instructions] I must advise you that this conference call is being recorded. I would now like to turn -- hand over to you Vector's Chair Douglas McKay who will take you through the call.

[Foreign Language] Hello everyone, and welcome to this presentation. I'm Doug McKay, Vector's Chair. Today, we're going through Vector's results briefing for the half year ended 31 December 2025. Joining me on the call for the first time as our group Chief Executive is Chris Blenkiron. Pleased to have you here, Chris. And we have Chief Financial Officer, Jason Hollingworth.

We'll start the presentation with comments from Chris on overall financial performance. Then Jason will look at the detail. Chris will then talk about the outlook for the next 6 months, and then I will come back to talk about the dividend. After that, we'll be happy to take your questions. And I'll now hand over to Chris to start the presentation.

Thank you, Doug. Hello, everyone, and thank you for joining the call. It's great to be speaking with you for my first market update since joining Vector in December. I'll start off by setting the context for these results. The new regulatory period, known as DPP4, began on the 1st of April 2025. At this time, the Commerce Commission increased allowable revenue for all electricity distribution businesses in New Zealand. The changes support the investment that's needed for the country's energy transition.

Also, keep in mind that the gray bars on the slides show the impact of businesses that have now been sold and continuing operations are shown in blue. This is to allow for easy year-on-year comparison. With that background in mind, I'll talk through some of the top line results.

Vector's group financial performance for this half year has been strong and in line with our expectations. Revenue for Vector Group is up 14%, driven by higher electricity revenue. Higher revenue has flowed through to an increase in adjusted EBITDA to $240 million. This is up 19% over the same period in 2024. Adjusted EBITDA excludes capital contributions, which are paid by new customers for their connections to the network and is how we currently ensure that growth pays for growth rather than cost of growth being spread across all Auckland electricity consumers.

Net profit after tax was $113 million, down 4% with the higher adjusted EBITDA offset by lower capital contributions. Gross capital expenditure was $223 million, down 15% on the prior period. However, we do expect capital expenditure to be higher in the second half of the year than it was in the first.

In terms of regulatory quality measures, we include SAIDI minutes in our quarterly operating statistics, which were released last month. SAIDI is how electricity distribution businesses are measured by the Commerce Commission for the duration of power outages on their networks over a year. At this stage in the regulatory year, which finishes at the end of March, we are within the regulatory limit. Our focus is on making sure every dollar we spend produces the best value possible and keeping our charges, which are around 1/4 of the total power bill as affordable as we can. I'll now hand over to Jason to go over the detail behind these top line results.

Thank you, Chris. This slide shows the segment contributions towards the adjusted EBITDA figure. Adjusted EBITDA from the Electricity segment was up $48 million, reflecting that HY '26 was under DPP4 and HY '25 was under DPP3. Earnings for Gas were flat on the prior period. Other includes VTS, Vector Fibre, Equalise, which offers cyber services to other lines companies and our group eliminations. It also includes a $9.3 million loss on sale from HRV effective on 1st of August '25.

Next slide. Net profit after tax was down $5 million or 4%. This is down on the prior period with the higher adjusted EBITDA being offset by the factors shown on the slide, including lower capital contributions, fair value movements on financial instruments and tax. Gross capital expenditure has decreased from a comparable 2024 period to $223 million, and you can see here some of the detail. Net CapEx after deducting capital contributions was down at $126 million. Capital contributions were down at $97 million.

The slide on group debt shows that our debt levels have remained flat with gearing at 37%. The next slide, we'll now look at the segment performance, starting with electricity. Adjusted EBITDA for electricity was higher, as previously mentioned. The higher impact from pass-through costs is the transmission charges we collect on behalf of Transpower. These have increased because of Transpower's own revenue reset that reprice transmission at the same time as distribution.

We passed transmission costs on and recover them via our revenues. There are also higher OpEx costs in the period linked to increased maintenance activity and also higher digital costs. Total electricity connection numbers grew by 1.3%.

Looking at gas. Adjusted EBITDA for gas distribution was flat at $24 million, with slightly higher revenue in the period, offset by slightly higher costs. Gas distribution volume was down 4.5% compared to the prior period due to lower demand from the residential, industrial and commercial sectors. There has been a 0.4% in total gas connections over the period.

These results are consistent with our most recent forecast for the Gas network, which were published last year in our gas asset management plan. We have recently submitted on the Commerce Commission's DPP4 draft Gas decision. This is the 5-year reset for gas distribution networks with the commission's final decision due in May 2026.

We welcome the commission's intention to continue to accelerate depreciation given the heightened uncertainty over the long-term nature of gas in New Zealand. And given the difficulty in accurately forecasting gas volumes for the next 5 years, which is fundamental -- which is a fundamental input into setting a price cap, our submission advocates for a move away from a price cap for approach that would share volume forecast risk between both the network owners and consumers.

The Commerce Commission is still considering its final decision, so we don't yet know what this will mean for consumer prices. Pipeline costs are just one component of the gas bill; however, most forecasts show that over the long term, these will rise. That's why we're advocating for a managed transition and making sure we recover costs fairly now. This also means keeping the gas network safe and reliable while it's still in use and planning for decommissioning when these pipes reach the end of their life.

Next slide looks at Bluecurrent. Our investment in Bluecurrent continues to perform in line with our expectations. Year-on-year, Bluecurrent has increased its revenue, resulting in higher EBITDA, and this is flowing through to higher distributions. In this period, we received $26.6 million of distributions in relation to our 50% shareholding. And I'll now hand back to Chris.

Thanks, Jason. For the 2026 full year results, we are forecasting adjusted EBITDA to be within our guidance range of $470 million to $490 million. We are now forecasting gross capital expenditure within the range of $500 million to $540 million. This forecast represents an increase over our full year 2025 capital investment and at around $0.5 billion shows our commitment to significant investment in Auckland's critical energy infrastructure.

We're forecasting capital contributions within the range of $180 million to $215 million for the full year. We've tightened the ranges for gross capital expenditure and capital contributions because we now have greater visibility of project time lines through to the end of the reporting period. Thank you to all of the Vector people, our field partners and suppliers who work incredibly hard for our customers and who delivered these results.

We know that for our energy system to be at its best and most affordable, the whole sector needs to coordinate well and work in concert with each other. We're committed to doing this to support the region's role in our national economy and to help our country meet our energy aspirations. I'll now hand back to Doug.

Thank you, Chris and Jason. The board has determined an interim dividend of $0.125 per share with no imputation. Now that brings us to the end of our presentation. But just before we move to questions, I'd like to thank Chris and his executive team and everyone else at Vector, plus our field service providers and call center for their hard work over the period to deliver for Vector customers and shareholders. Chris, Jason and I are now happy to take any questions.

[Operator Instructions]

Your first question comes from Grant Lowe with Jarden.

Tim, can you hear me okay?

We can. Grant, Yes.

Thanks for the presentation. And welcome, Chris. Just around a few for me. The electricity business was a beat on my numbers at both revenue and EBITDA. So I think the revenue was up circa 28%, which is a touch higher than my uplift that I was expecting. Were there any sort of one-offs in that result in terms of inflation catch-up and the like that we've seen in the past?

Yes, Grant, there is still a wash-up balance that we were able to recover in this period. So that is in there as well. That's coming to an end because it has a 2-year lag.

Yes. Okay. And do you have that number to hand as to roughly how much that was?

I don't have it to hand that I can look it up and get it to you, yes.

Okay. Yes, great. Thank you. Okay. No, that's good. And then just the -- so the guidance has been held, and we've also got that $9.3 million loss in there. With guidance being held, was that guidance already factoring in the $9.3 million loss and the washup balance that going into that number when you set the guidance at the full year?

I think, to be honest, probably not Grant. So I think we're at the probably higher end of that number. That loss turned up after we set that guidance. So yes.

Yes. So the washup balance was probably $9 million, that's calculable. But -- so effectively, is this effectively a $9.3 million upgrade to the guidance range.

I think it puts us at the top end of that guidance. We're now saying it would have been at the top end of the guidance. We've held the range. But I think if we haven't had the HRV situation, we would have probably been guiding to the top end of the range rather than sort of leaving the range as it is.

Yes. Okay. I guess, that's useful. And then just around the dividend payout, it was a touch lower than I had in my forecast, I was forecasting 13% versus your 12.5%. I appreciate it's a free cash flow measure. But obviously, the -- if we just think about the EBITDA for a second, that's up quite materially. How did the Board go about -- think about setting the 1H dividend? And then what are the sort of swing factors around for the full year dividend, what we might expect to see there?

Yes, it's a good question. To be honest, we didn't pay any attention to -- and we haven't with the interim in terms of its percentage relative to the 70% of the policy. And I understand from Jason this morning, it's lower than that.

For the half result.

For the half year results. Yes. We don't look at the half in that respect. It's the full year that we will pay consideration to the 70% minimum. So we don't have any reason to think we won't be well within the range at the year-end. Look, part of the decision-making was what was it last year in the interim and what should it be this year, given EBITDA is strong, as you say. And so we uplifted it by 0.5%, and we sort of thought, well, that's a good indication of how confident we feel about the way things are tracking. But if you looked at it strictly versus the policy, but we don't think about the half year in that respect, we could have gone a bit higher. But no, we haven't.

Okay. So I guess -- I mean, my full year is $27 million versus the $25 million last year based on the free cash flow calculation. I guess what I'm hearing is that there was a touch low on the free cash flow side of things. If everything sort of plays out with respect to guidance and everything else, would it be reasonable to assume that there is a slightly stronger uplift in the second half if everything plays out according to plan?

If everything plays out, yes, it will, Yes. I wouldn't necessarily agree with the $27 million, but you're at the top end of what I'm thinking of as Chairman anyway. I'm not speaking for the Board at the moment, but we'll see.

Okay. Yes, indeed. And then last one for me. Just I think last year, you provided guidance on Bluecurrent distributions. Do you have any thoughts on that? I see we've got the half year figure of $26.6 million. Do you have a full year figure in mind?

We do have a number. I don't have it to hand, but you can see the year-on-year sort of increase for Bluecurrent period-on-period. So I think that we expect that to continue into the second half. So I think last period, we got $23.4 million. This period, we're getting $26.6 million, so an uplift. So I expect that to continue as they continue to deploy meters.

Your next question comes from Andrew Harvey-Green with Forsyth Barr.

Doug, Chris and Jason. Just a couple of questions from me. First one, just looking at the electricity OpEx line, there was a reasonable increase, I guess, relative to first half last year, but even relative to the second half last year. Is that -- should we be thinking as that the sort of the normal half year run rate for OpEx on electricity going forward? Or are there some sort of one-offs in there that might pull it back for the second half and other periods?

I think there are some one-offs in that, Andrew. I don't think it's actually coming down, but I don't think it's going to keep lifting at that rate. There has been, I guess, an increase in our maintenance spend in this half that's probably going to continue with some change in standards and just some extra activity that we've been doing. We also have a couple of large projects underway that are -- have to be under these new accounting rules now have to actually be expensed rather than capitalized. So our digital costs are sort of running at a higher rate, which I think is probably going to continue while these projects are occurring.

So yes, it's mainly those 2 areas that are causing that increase, maintenance spend, which is going to continue and this lumpy digital spend around a couple of key projects that are cloud-based and therefore, have to be expensed.

Just a follow-on question around the metering. I noticed, I think that it's been refinanced. So you've got -- expecting lower interest costs going forward. All other things being equal, we should expect that to help increase distributions back to Vector from the metering?

They've refinanced at lower interest rates. Their NPAT number is lower because they've had to write off their arrangement fees from the original facility, but sort of that's noncash, if you like. So the actual underlying cash flow is better because they've got lower interest rates, I think, by circa 30 basis points from memory. So it's a reasonable reduction.

Yes. Okay. Cool. And last question for me was just whether we've got a little bit of an update on the strategic review of the fiber business.

Yes, Andrew. No real update, that process continues. And just a reminder that there's no guarantee that the outcome of that strategic review would result in a sale, but the process does continue.

Your next question comes from Phil Campbell with UBS.

Just a couple from me as well. I just noticed in the half year cash flow statement, it looked as though there was some kind of positive working capital movement. So that was one of the reasons why if you did do a dividend payout ratio calculation, it was a little bit lower. I'm assuming there's just timing issues around that, Jason, and that will probably reverse in the second half?

Yes, that's right. There's nothing there that I'm aware of -- yes that's structural. I think it's timing, yes.

And then just on the dividend coming back to this kind of $0.27, I think we've got that in our model as well, and we're assuming that the payout ratio declines from last year. I think from last year, from memory, it was 85%. So we've got that coming down. I just wanted to see if that was still the thinking. I think the rationale at the last result was just some uncertainty around what EA is doing in terms of those capital contributions. I just wanted to check if that was still the thinking from the Board?

0Yes, it will be lower than 85% this time around.

I think last year,, don't lock that in because that was a sort of one-off to do with sort of transitioning from DPP3 to DPP4 and the fact we only had a quarter in our results. So I think we said, look, we're paying up at this level, but it's not a -- don't bake that into your future numbers.

And maybe just a question on CapEx. Obviously, like it was a bit weaker in the first half. And obviously, you've tightened the range up in the full year, still a large number. What's the kind of reason for the CapEx number kind of coming down?

Yes, Phil, there's a couple of reasons. I mean 1 is some customer projects were sort of pushed out. It's always difficult with these lumpy capital projects, as you know, to get the timing right. So a few of those have been pushed further out. And that's probably the primary reason. So we do have some confidence going in the second half that, that run rate will certainly pick up.

Is that data centers or you can't really comment?

We can't comment on the specific projects, but there's a number of them.

And then maybe just last question for me on metering. I noticed that Neil Williams has left a CEO. I'm just wondering if there's any reason for that and whether you've recruited a new CEO for Bluecurrent?

Not yet. We haven't recruited yet. The Bluecurrent Board is managing that process, and we have 2 representatives on that Board, looking after our interests, Dame Paula Rebstock and Simon MacKenzie. And they're in the process of working with the headhunter now to find the right replacement.

Great. Awesome. And I just noticed you may not know the answer to this question, but I just noticed in the AFR, there was, obviously, one of the Bluecurrent competitors, I think, potentially a transaction happening there. Just wondering if there's any valuation read-through that you might want to comment on?

Are you talking plus ES?

Yes. Yes.

Well, look, I can't quote the numbers, but I did remember thinking the expectations on value looked very, very high. But I didn't do an earnings multiple or anything. It just -- I think it was $3 billion or something. It was a massive number. So obviously, we're trying to be involved in that process. We are interested strategically in increasing our participation in that market, increasing our number of meters but we'll just have to see how that plays out. If people are at that sort of number, that's a very big number.

Right. And then maybe just very last one, just on the fiber process. Is there any kind of timetable there? When you say we're no guarantee of sales. Is there any time when bids are due or where about are we in that process?

There is a timetable, Phil. And yes, I think we'll know by year-end, whether we've got a transaction or not. And I guess we won't quite know when it completes. It will depend on what the terms and conditions are. But we'll certainly, I think, have landed a decision by 30 June, one way or the other.

Your next question comes from Stephen Hudson with Macquarie Equities.

Morning, everybody, and welcome, Chris. All of my questions have actually been posed, but perhaps just a general one for you, Chris. I know it's early days, but I guess I just -- and I know we'll be meeting with you, I believe, the 1st of March as a community. But any sort of initial observations on the state of Vector in terms of assets, people and strategic direction and where you may, I suppose, differ from sort of the prior thinking, I guess?

Yes, sure. I mean, Simon's left a very strong and good business operating here, Stephen. We've got some very strong people in the right roles, doing some really good work. In fact, I think some of the credit that we will get to keeping the lights on and the infrastructure going in Auckland is probably something that we should get. It's in a strong state.

In terms of the strategic direction, I've not contemplated any change in strategic direction. The Symphony strategy remains as focused as it has. I think what we'll continue to do is an ongoing test against the external environment, whether that's the customer side, the regulatory settings, decarbonization pace, technical, we'll continue to test those settings. But my focus at the moment is absolutely on sort of disciplined execution on the work that we're doing as we go into the second half. But it's great to join a great business in really strong shape.

Very good. Thanks, Chris. And I look forward to catching up.

Yes, Looking forward to it. Thanks Stephen.

Your next question comes from the line of Grant Lowe with Jarden.

Another one from me. Just around the meters rollout in Australia. Obviously, the regulatory bodies over there have -- I'm not sure exactly what the terminology is, but effectively mandated 100% penetration by 2030. Is there any sort of commentary you can give around Bluecurrent in terms of either contracts signed or thoughts around the level of participation in that rollout at this stage?

I don't have any updates, Grant, other than we had a Board meeting here yesterday, and Paul was telling me that things are tracking as they had indicated they would be the Bluecurrent Board. So there's no surprises there. There's incremental increases in our metering network. We don't -- we haven't had any acquisitions of packages of meters or anything like that in this period. So it's all organic at this point in time, and it's steady.

Yes. Okay. How do you -- just generally, like for the market as a whole, how do you see that rollout playing out? Like obviously, there was a big contract signed here for the rollout in New Zealand. Is it a similar sort of a process? Is that what you're expecting over the next well and you're sort of actively participating in those discussions?

Those contracts tend to be quite long term. So once you settle into them, you've got a good tenure there mostly. You're not sort of every year or 2 into another process on those same contracts. They require a lot of capital investment. They require a lot of systems and process changes and interactions. So it doesn't move around a lot. Once you land them, it's a reasonably settled market.

Yes. I guess the question I'm sort of asking is, I think rough guess there were sort of 5 million meters to go or something, you might tell me that's wrong. But are we -- do you expect to see sort of like 1 million meters contract or a rollout of 1 million meters signed in big chunks like that? Is that kind of how you expect this to play out?

The retailers typically bundle them up into reasonably large blocks, Grant, and then sort of tender them out. And we have contracts in place with the existing retailers, and there are still some contracts being let, but we have a number already under contract. It's competitive though, as you imagine, [ Telehub, Plus ES ] are the other 2 big players. And these retailers are sort of good at getting the sharp price out of the market.

And yes, so that's it. So we've got a number of already under contract that we're executing on. New Zealand is deployed, so there's not so much going on here. It's really an Australian growth sort of situation. And once you've won those contracts, you still have to execute on them, right? So there's always a risk that if you don't deliver because there's a lot of competition for field service people to install all these meters.

So it's not -- one thing to win the contract, you actually got to execute on it. And we're very sort of mindful of that because the opportunity potentially to pick up some extra work if you're the party that's executing well. And we're seeing a bit of that going on at the moment as well over there where some others potentially aren't quite performing.

And these contract package sizes are often in the order of 200,000 to 300,000 meters.

Yes. That is useful.

There are no further questions. I would now like to hand it over back to Doug for closing remarks.

Okay. Thank you. If there aren't any further questions, we'll end the teleconference and the webcast. If analysts and investors have further questions, please feel free to contact Jason. For the media, please contact Matt Britton or call our usual media phone number. Thank you, everyone, for joining us.

[Foreign Language] Good afternoon, everybody, and welcome to this meeting. My name is Doug McKay, and I am Vector's Chair. I'd like to acknowledge Ngati Whatua Orakei as mana whenua for Central Auckland, where we are today. As we have a quorum, and it's 2:00, I will now declare open the 2025 Annual Meeting of Vector Limited shareholders.

We're starting today with ordinary business, which includes short addresses from myself and Simon, and then 7 resolutions. We'll see how short Simon can be given its his last one. You take as long as you like, mate. As part of these resolutions, you will also hear short addresses from the directors who are seeking reelection. After that, we'll move to general business, Q&A and then voting.

Today's meeting is a hybrid meeting where shareholders can participate here in the room and online. As this is a shareholder meeting, we ask that you do not use the time for asking specific operational or customer service questions that relate to individual projects or your situation. We're happy to have those questions and queries, but we have members of our customer team available here in the room and after the meeting, and they will be very happy to help you with any of those types of queries.

We do encourage shareholder questions, and we'll indicate question time after each of the presentations. We'll have microphones available for you. Once you've asked your question, please give the microphone back while we're answering your question so that others can have their turn. And so that everyone can have a turn, we ask that you keep to 1 or 2 questions per person. If you still have more questions or feedback, Simon, our Group Chief Executive, and I will be available after the meeting to chat with you as required.

We also welcome the media to our meeting today as observers but ask that you please hold your questions until after the meeting or if you would like to talk to Simon and myself, then please make yourself known to one of our communications team who are at the back of the room or call our usual media phone number. If you're online and you'd like some help, you can type your query and one of the Computershare team will assist you.

Voting today will be conducted by way of a poll. If you're here in the room, you can mark your voting paper at any time and a team member from Computershare, will collect the voting forms before the end of the meeting. If you're online, you will be able to cast your vote under the Vote tab, once I declare voting open. I will indicate when voting will close, so that you have a final opportunity to cast your vote.

So with those instructions now complete, I do declare voting to be open. The number of proxies and the proxies held by myself as Chair of the meeting or in my own name are shown on the screen. It is my intention to vote the discretionary proxies I hold in favor of the resolutions. It's now my pleasure to introduce my fellow directors: Alastair Bell, Vaughan Busby, Dr. Paul Hutchison, Dame Paula Rebstock, Bruce Turner and Anne Urlwin.

Also at the table, we have Group Chief Executive, Simon MacKenzie; and John Rodger, our Chief Legal and Assurance Officer and Company Secretary. Vector's Chief Financial Officer, Jason Hollingworth; and external auditor, Matt Diprose from KPMG, are seated in the front row together with other members of Vector's executive team and advisory team.

So now to the business. I'm pleased to report that our financial performance for the year has been solid, as you will have seen in our results announcement in August. Just before I get into some of the highlights, I want to comment briefly on the regulatory cycle for electricity networks as this has a strong impact on our results, and you'll hear this come through in the presentations.

Late last financial year, we entered into a new 5-year regulatory cycle for electricity networks. This is where the Commerce Commission resets what revenue we can earn from the electricity distribution business. This is known as DPP4 because it's the fourth of these cycles and DPP stands for Default Price Quality Path. DPP4 started on the 1st of April 2025, so has been in effect for the final quarter of these financial results. Simon will go into more detail shortly. But if I move through some of the numbers, for continuing operations, adjusted EBITDA has increased by 16%. Adjusted EBITDA is earnings adjusted for fair value changes, associates, third-party contributions and significant one-off gains, losses, revenues and other expenses. The increase is a result of higher revenue, particularly in the last quarter where higher revenue from the new regulatory price path has come through. We've also managed -- we've also maintained prudent financial management across the group.

Group net profit after tax for continuing operations was $154.7 million, which includes a $37 million impairment of the gas distribution. The impairment recognizes our latest forecasts for gas network connections, where we see a decline in connections in FY '26 as a result of significant market uncertainty, scarcity of gas and rising costs. Following the impairment, the carrying value of the gas distribution business is now consistent with the estimated value of the regulated asset base, which is key to determining the regulated revenue.

The electricity network performed within the regulatory quality standards for the duration and frequency of outages, although we acknowledge that any outage is frustrating for customers, and we understand how important it is that homes and businesses can rely on their electricity supply. I want to give my thanks to the Vector team and the field service providers who work so hard to keep the lights on for Auckland. This is not just after a severe weather event, but every day through large-scale programs of planning and building for the future, maintaining the network we have today and getting out to make repairs quickly and safely when something impacts network performance, such as a car hitting one of our poles.

We've announced an unimputed final dividend of $0.13 per share, taking the full year dividend this year to $0.25 per share. This represents an 85% payout of free cash flow in the midpoint of the 70% to 100% range as stated in our policy. Shareholders should not interpret this year's payout as being an indication that future dividends will be in the midpoint of the range.

Overall, the Board is pleased to see a solid financial result and completed transactions, including the sales of our Natural Gas Trading business, Ongas LPG and HRV. These completed transactions enable us to concentrate on the core strengths and demands of our regulated electricity and gas networks while also exploring growth opportunities. These growth opportunities include Vector Technology Solutions, our investment in metering business Bluecurrent and other options that may emerge with the changing market, consumer needs and the scale of investment required for the economy to electrify and decarbonize. Our balance sheet is strong. And as such, we have the capacity to consider other opportunities.

I'd like to thank Simon and his executive team and everyone else at Vector for their hard work throughout the year. This is Simon's final Vector shareholder meeting. And so I'd also like to commend him for his leadership and significant contribution to the business during his time at Vector, including the past 17 years as Group Chief Executive. We've also announced that Chris Blenkiron will be joining the team as Vector's new Group Chief Executive in December. Chris is a highly regarded leader. We conducted an extremely thorough search process, both locally and internationally. And through this process, Chris demonstrated astute insights into the energy sector and Vector's future growth opportunities. I'd like to now hand over to Simon.

Thanks, Doug, and good afternoon, everyone. So I'm pleased to share some highlights of the year, including examples of how we're bringing our strategy to life and some of the key issues facing Vector in the wider sector. So Doug has mentioned the DPP4 regulatory cycle that began on 1st of April this year. Under default price path 4, we've seen the Commerce Commission increase allowable revenue for transmission and distribution businesses which has occurred largely as a consequence of higher interest rates and inflation experienced within the prior default price path 3 period.

We are well placed to continue our disciplined network investment approach in the DPP4 period, which is to avoid committing to high levels of capital investment in areas where there is significant uncertainty or to cover short demand peaks when there are other less capital-intensive ways to use available network capacity and maintain network resilience. We're very conscious that cost of living pressures for consumers remain high.

So DPP4 has resulted in price increases on power bills, and we recognize this is hard on all consumers. However, in real terms, our electricity lines charges remain very similar to what they were more than 10 years ago and the increase under the default price path 4 is a function of interest rate movements. It is also important to note that the total increase has been smoothed out over the next 5-year period.

Our distribution line charges make up around 27% of the total bill that consumers receive. We've heard commentary in the media that this -- that it's these lines charges that have driven higher consumer power bills this year. Whilst it is true that the Commerce Commission changes under the price path have increased bills, but only 27% of the bill or around 35%, if you also add in transmission costs from Transpower, there is still a majority of the bill impacted by other factors such as the cost of energy. What is less well understood is that a key measure of the cost of producing new electricity, the levelized cost of energy has stepped up significantly in the past year, and this will need to flow through to power bills eventually.

Our commitment to Auckland's growth and electrification remains strong, and the region continues to grow despite the broader economic slowdown. While we've seen a softening in the rate of new connections this year and fewer private electric vehicles being sold, Auckland is experiencing rising demand for hyperscale data center connections, each with significant energy requirements. Data center projects offer major opportunities for the region and for New Zealand more broadly. For example, hyperscale data centers typically request around 20 megavolt amps in the first phase of multistage developments, which is roughly equivalent to 8,000 homes. However, they're accompanied by uncertainty about the rate at which the electricity demand will grow to meet the capacity requested since this depends on the adoption of data center services by the data center clients.

We know these hyperscale data center requests will drive a need for us to invest in system growth, but we must ensure our investment is moving in step with the anticipated demand. Because of the scale of some of these projects, their impacts may not be confined just to our distribution network. They may also affect electricity generation and transmission, so a careful and coordinated planning is critical in working closely with data center sector and government.

Our Symphony strategy puts our customers at the center of our decisions, and we're acutely aware of the importance of getting the right balance between affordability and prudent, efficient investment given the cost of living pressure many of our customers are facing. Our approach to investment I referred to earlier is one example of how we manage costs that flow on to customers.

As we've talked about in previous annual meetings, our strategy looks to harness smart use of technology to smooth out consumption away from peak periods. This is part of how we ensure our electricity network is equipped for increased demand as the reliance on electricity continues to increase. While we must prepare for the future needs of Aucklanders, our focus remains on providing a reliable, resilient, secure energy supply today and doing this as efficiently as possible. So for example, in the past year, we've inspected more than 2,000 kilometers of network using drones, and we've completed 12 projects to boost resilience and future capacity in the CBD, alongside numerous other projects, large and small across the entire region.

An example of our strategy to embrace strategic partnerships to help us innovate faster, realize cost efficiencies and facilitate disciplined investment is the launch of GridAware. So GridAware is a new AI tool that is reinventing the way we inspect and maintain the electricity network. This tool was developed as part of our partnership with X, Google's Innovation Lab, and Tapestry, X's energy moonshot division and it's the first tool to be deployed on our network from this collaboration.

GridAware helps us improve our network inspection processes by using aerial imaging and data captured by drones and helicopters to give us highly detailed views of the condition of our overhead assets. This helps us prioritize our maintenance investment, but GridAware can go also further because as we use it, we're training artificial intelligence to help us complete condition assessments of our network automatically. The Commerce Commission has recognized the customer benefit from this project, awarding us an innovation project allowance in the final year of the previous cycle known as DPP3.

With this project in place, we're also the first distribution utility in the world to integrate another Tapestry tool that vastly speeds up our ability to assess future network scenarios. This helps us run long-term network solutions that help us plan for a range of different future scenarios. And this is extremely helpful to see the potential impact to the network of things like different rates of EV take-up, data centers and rooftop solar. We now have a short video for you to help illustrate these projects and how they come together to benefit our customers.

[Presentation]

So moving now. In 2020, we set a target to reduce Scope 1 and 2 emissions, excluding electrical line losses by 53.5% by 2030. This year, we recorded a reduction of 55%, which is calculated against the businesses we now have, meaning it reflects our actual emissions reductions, not from those businesses that we have sold. This means that as at 30 June 2025, we have achieved our 2030 target. We did this by innovation in technology and processes and successful initiatives are now embedded into our operations. One of these initiatives is shown on screen, our gas sniffer trucks that proactively identify leaks from our gas network, enabling us to fix them faster and improve safety for our customers as well as reducing the emissions from these leaks.

We'll continue to focus on our emission targets because we know how important it is to maintain these reductions. However, there may be some volatility in our overall emissions performance. This is especially true when factors outside our control come into play, such as severe weather that requires temporary generation to restore power or third-party damage to our gas networks.

I'll now move on to the wider energy landscape and some of the challenges we're seeing. An important issue for us is the reform to the electricity distribution connections as announced in July by the Electricity Authority. The key issue we were concerned about was that funding of connections and the potential of being required to move away from our policy of the people causing the connections growth paying 100% of those costs to a policy of the costs being shared across all Auckland consumers. The EA or the Electricity Authority is continuing to engage on this, having deferred a final decision on the level of contributions that can be charged for customer connections. There were a number of technical changes announced, which will add complexity to what is already a highly complex process, especially noting that we do new connections of around about 15,000 a year more than any other electricity network in New Zealand.

We'll need to make changes to our internal processes, and we'll do so within the time frames that we've been given. The Electricity Authority has also expressed that is expecting some of these changes to be done in a nationally aligned way. We're already participating in the processes through our member association electricity networks [indiscernible] and we'll continue engaging with the Electricity Authority as well.

Looking to gas, there is unprecedented uncertainty around the future of natural gas in New Zealand. This is driven in the near term by significant market uncertainty, scarcity of gas and rising costs and in the long term by lack of clarity over how gas distribution businesses will be impacted by New Zealand's 2050 net-zero emissions targets. The current regulatory settings were designed in a more stable environment, where demand for gas was growing, and we are urging the Commerce Commission to update them to recognize this uncertainty and to ensure any shift away from gas protects the interests of customers as well as other stakeholders.

A new draft gas default price path is expected to be announced by the commission later this year, and we are participating fully in the process so the commission understands our perspective both for investors and customers. Key issues for us is that the commission recognizes and responds to the context this reset is occurring in, which is the significant risk to gas revenues because of the near impossible task of forecasting gas volumes, 5 years into the future as well as medium- to long-term risk that some of the gas distribution assets become stranded if the gas market scales down much earlier than is anticipated.

As for the energy sector as a whole, the government hasn't yet released the report a commission to help with its review into the energy sector. We, like many others, are waiting to see the contents of this report and the government response.

I'll now go over financial guidance we provided when we announced our results. And as with the half year, we will be providing guidance on adjusted EBITDA, gross CapEx and capital contributions. For financial year '26, the range is shown on the slide. For adjusted EBITDA, the forecast increase on financial year '25 is driven primarily because of the financial year '26 is the first full year of the new electricity price path. The forecast increase in capital expenditure is linked to expected customer-driven growth and our continued investment in the network.

And before I close my address, I'd like to make a few comments as this is my last address as Vector Group Chief Executive. I feel incredibly privileged to have been -- had a career in New Zealand energy sector, firstly, with [ ECNZ ] then to Mercury Energy and then on to Vector. The journey has been one of change, challenge and continual growth and for me personally as well as for the sector as a whole. But there are some constants that have always seen Vector apart. Vector has never been content to simply follow the easy path or do what others are doing. Instead, we've constantly taken the deliberate approach to develop and articulate our own view even if it sets us apart. We've always tried to put the customer at the center of our thinking.

We don't just look within our own sector for answers nor do we just look into New Zealand. We look outside the energy sector and -- where innovation and forward thinking is happening globally to find the right skills and perspectives. Our views aren't always welcomed, but we've always believed in articulating our position so that people know exactly where we stand even if they may not agree. We like to challenge ourselves as well as the wider industry. Consumer expectations have grown immensely, and that's a real challenge for the energy sector, where you can't build big things overnight. When you're facing such a complex challenge as we are with the energy transition, you can't just settle for the status quo.

Our willingness to have a view is why we've been able to partner with global leaders like Google and Amazon. They looked around the world to find and found it refreshing to work with a company like Vector that stands for something. These partnerships and others before them with Palantir and Tesla have provided our staff with invaluable experiences and relationships that are far more useful than simply sitting at home in our corner of the world thinking we have all the answers ourselves.

Being a regulated entity as part of our portfolio also brings its own unique challenges. We've had the privilege of running nonregulated businesses in highly competitive markets like gas trading, fiber and metering. But with other parts of our businesses being regulated, I sometimes hear comments like that this means we don't have the same competitive pressure constantly driving us. But make no mistake, everyone at Vector is committed to doing the right things. Our teams and our field service providers are out there every day working for customers. And in storms, they're outside in all conditions rallying to get the power back on quickly and safely as they can.

Over my time with Vector, we've managed a large portfolio of assets, including some that are regulated and many that are in competitive markets, including technology start-ups. We've known when to invest, when to grow and when to exit. And in most cases, we've picked the right time to exit, so we could invest in growth businesses or sometimes because the risk outlook wasn't where we wanted it to be. For example, we divested the Wellington Electricity network and invested in metering. We exited gas transmission and gas processing, trading and distribution because we saw the risk profile just wasn't where we wanted it. And now we have a more electricity-centric focus, and that's timely because electricity is what the world needs more and more of now and into the future.

Looking ahead, I was recently asked if there were -- will be more energy shortages. And given the dry year risk hasn't gone away, and we're seeing more extreme weather conditions all across the country, I think it's highly likely there could be more energy shortages. In the past 2 years, what I call the hope strategy has kicked in and then it rained. There's no clear strategy or plan or accountability over the whole energy system as a whole.

So finally, I'd like to thank all our staff, field service providers and Telenet for their huge efforts every day to deliver to our customers. I'd also like to thank all the service providers for the huge amount of work they do to support us. And also special thanks also to the Vector Board, past and present, for their support and challenge and to all our shareholders, including Entrust for your support over the years at Vector. Thank you very much.

Thank you, Simon. Now we'll begin working through our agenda items. The notice of meeting lists the items for voting and those eligible to vote, can I remind you, you can do so now at any time. Only shareholders registered at 5:00 p.m. on Friday, the 26th of December 2025 or their proxies or representatives may vote.

The first agenda item is to invite questions on my and Simon's reports for the financial year ended 30 June 2025, contained in our annual report and delivered today. Questions on future performance will be addressed in general business. The annual report was published online on 25th of August 2025 and hard copy reports were sent to all shareholders who requested one. Questions on this topic may be put directly to our external auditors, KPMG, but please keep those questions relevant to their auditing role.

If there are any questions in respect of the annual report, the financial statements and audit report for the year ended June 2025, please raise your hand and wait for my signal and a microphone. Are there any questions?

We have one down here. I know who you are. I think I can see through the light. That's you, [ Carlie ], isn't it?

It is. You're talking about energy generation, and it sounds like there is a real risk of shortages, especially with the data centers. There's also talk about mining [indiscernible]. Now is there anybody investigating tidal power in New Zealand? They've got it in the U.K. I've seen it on TV and programs. With our coastline, surely, there's a place to start looking at tidal power?

I'd have to say I'm not aware of any serious investigations of tidal power. The experience overseas has shown that it's a high-risk venture. There's a lot of things in the natural environment that gets accentuated in a tidal environment that are difficult to control. We still have so much potential for generation in wind, in solar. So I'm not sure there's a big need for us to be looking for other sources of energy at this stage, but more to capitalize on the sources we know and we have in abundance. But that takes the generation gene failures to actually do it, doesn't it. And at the moment, they're not motivated. Well, that would have to be a question for 4 other general AGMs, I think, not for me.

But that takes the generation gentailers to actually do it, doesn't it? And at the moment, they're not motivated.

Well, that would have to be a question for 4 other general AGMs, I think, not for me.

Well, it's just that you talked about energy supplies. So I don't go to those other meetings. I'm sorry. You're my last resort.

Right. Well, look, the premise of what you're saying is absolutely true. We are in danger of energy shortages. I don't think we lack sources of energy potentially. We just haven't built new generation fast enough. And I've heard the generators talk and they are doing a lot of investment themselves as are others in the solar field and wind field. So I think we just have to park that one for the moment. I can't give you a definitive answer.

Any other questions? Okay. There's no other questions in the room. So can I ask if there's any questions from shareholders watching online? Sophie, do I look to you for that answer.

There are no online questions.

There are no online questions at the moment. Okay. All right. Thank you. That ends the questions in relation to that agenda item.

The Vector Board considers its mix of skills and experience carefully, and we appoint new directors to complement the skills of those already serving on the board. Today, Vaughan Busby, who was appointed by the Board in June stands for election. Alastair Bell, Paul Hutchison, Paula Rebstock and I retire by rotation and stand for reelection. I will invite Paul, Alaster, Vaughan and Paula to each speak briefly, and I'll also make a short speech regarding my reelection. Given that there are 5 speeches today, we won't take questions as we go, but we'll take questions as a group at the end, if you don't mind.

So Vaughan, would you like to step up?

Good afternoon. Just before I begin, there's something I probably need to clarify, and that's despite press reports to the contrary, I'm not actually an Australian. I'm a kiwi who's living in Australia. So I'm sure all the New Zealanders is in the room, which is probably all of you will understand the need to make that clarification. I actually grew up in 2 only. And before heading offshore, I lived in Auckland for about 8 years. All my family still live and work here in Auckland.

By way of background, I've got over 20 years' experience in the energy industry, everything from energy trading, building generation, both renewable and thermal, smart metering, which is obviously an important business line for Vector. I've run retail businesses and have been involved in the development of software for energy trading and to facilitate the physical dispatch of energy international and regional markets in New Zealand, Australia, Asia and Europe. And for the last 9 years, I was actually non-Executive Director of Energy Queensland, the largest electricity distributor in Australia. I've served on numerous boards, including listed companies, private companies and government-owned corporations.

Should you support my election today, I'm sure my energy and technology background will add value to Vector. I also see another area where I think I'll be able to add value is by providing a slightly different insight and perspective having operated in different jurisdictions as to the way they are tackling energy issues. Obviously, electricity and gas is critical to an economy and New Zealand is facing some real challenges with regard to the supply of energy and its impact on the cost of living. Australia actually has many of the same issues with regard to electricity and gas that New Zealand does. However, they stem from slightly different causes.

Having said that, I see a real difference between Australia and New Zealand in terms of making policy decisions that require bold changes. So with my energy and technology background, combined with having operated in different markets, I believe I can add some real value to the Vector business and tackling the various issues that are being faced in the New Zealand energy sector. I'd appreciate your support. Thank you.

Mr. Chairman, Simon, shareholders. I'm Alastair Bell. Thank you for your nomination for reelection to the Board. Since joining the Vector Board in 2019, I've seen firsthand both the opportunities ahead for the business and the responsibilities we hold as stewards of this essential company. Vector sits at the center of a rapidly changing energy system, energy consumers, energy sources and energy distribution are all evolving at pace. Vector can look ahead to a power system that is more electricity and data-centric.

Vector plays a critical role for its consumers and for Auckland. Our job is to keep energy distribution reliable and affordable while investing for the future. The cost of delivering energy to consumers where the businesses of households is a constant consideration and an appropriate constraint. It's right too that intergenerational considerations ensure the enormous capital costs while delivering, upgrading and growing Vector's assets and infrastructure are balanced fairly between today's consumers and future generations.

Vector invests $0.5 billion annually into its networks. Power outages are within regulatory limits. Vector's greenhouse emissions are falling. Its balance sheet is strong, and its dividend per share has increased. Customers are at the center of Vector's Symphony strategy. Digital technologies and data solutions are leading changes in how Vector delivers as well, our network businesses are capital intensive and in long-term return profiles.

Vector wants to balance this by providing technology and services with shorter paybacks, for example, VTS. These will augment adjacent businesses such as the Bluecurrent joint venture. As a non-independent director, I represent Entrust, Vector's majority shareholder alongside Dr. Paul Hutchison. Entrust's 368,000 beneficiaries are all consumers on the Vector network and central as in South Auckland. This unique ownership structure aligns Vector's interests with those of its consumers just last week.

Entrust dividend -- as Entrust delivered its share of Vector's dividend directly to those Auckland households and businesses amounting to over $125 million into Auckland's economy. The Vector Board, of course, works for all 630,000 electricity consumers and 120,000 gas consumers across Auckland. It's a privilege to work along our independent directors, led by Doug McKay and with Simon MacKenzie and his executive team.

Simon's retirement marks an important milestone and his leadership will have left a lasting impact on Vector and the wider energy sector. He departs with our gratitude and best wishes. I'm seeking your support for reelection today. If elected, I will continue to work collaboratively to deliver value and sustainable returns for you, our shareholders. Thank you.

Good afternoon, ladies and gentlemen. Mr. Chairman, thank you very much for the opportunity to speak as I seek to be reelected to the Vector Board as a non-independent trustee director. From the outset, I want to emphasize my support and enthusiasm for Vector as it leads New Zealand and well beyond our shores in creative a new energy future. By way of background, I was privileged to join the Vector Board in 2021, and I was first elected to Entrust in 2015.

Vector has to date been a leader in transforming its own business grounded in data and insights and smartly using technology to benefit customers. Customers remain at the center of our Symphony strategy, and I see my role as continuing to support this focus, challenging and questioning where appropriate as an Entrust director representing a large part of the Auckland community. This focus is especially important to me.

As 1 of 5 trustees of Entrust, we are committed to doing everything possible to increase and protect your dividend alongside prudential financial management. Ensuring reliable and affordable power supply, supporting the transition to a low carbon energy future and investing in innovation and digital solutions for the benefit of energy customers and finally, to continue undergrounding power lines where appropriate. As a trustee director I strongly support the ongoing growth of a constructive relationship with the Vector Board and management. My position on the Board means I can positively contribute to these important matters and focus on representing the interests of all Vector shareholders.

As a medical practitioner, I've been very encouraged by the way Vector proactively manages the health, safety, mental health and well-being of Vector's people. Their best health is vital to the success of the company. It's been very exciting and rewarding being on the Nominations Committee, leading to the appointment of Chris Blenkiron as the new CEO. I'm confident Chris will build on Simon's magnificent legacy. A huge personal thank you to Simon for the incredible hard work and leadership you've demonstrated over so many years, both at Vector and on a national basis. You're a constant source of inspiration. Thank you very much for the opportunity to serve on the Vector Board. I greatly appreciate your support.

It is a privilege to put myself forward for a second term as a Vector Board member. I joined the Board originally in 2022 and then became your Chair in 2023. And I covered my relevant history and background when I was first elected so I won't repeat all that.

More important, I think, that I summarized what I have contributed in the last 3 years. I count my major contributions as one, the driving force behind the reshaping of Vector's business portfolio. We divested our Gas Trading and Ongas assets at a time that maximize value and took into account the state of the gas market and their risk profile.

Overall, these businesses performed well for our shareholders over time. And we believe we exited at the right time for Vector. HRV did not meet our performance expectations and that sale was completed just after balance date. We have now cleared the decks for an unambiguous focus on succeeding with Bluecurrent and Vector Technology Solutions. We now have a balance sheet that also gives us scope to explore other growth options.

Bluecurrent and Vector Technology Solutions originated out of the needs of our core electricity business, where we are subject matter experts. They both support the energy transition and play to the macro trends of distributed energy, network management and optimization through digital solutions, empowering customers to adopt demand response solutions and all of us using energy more efficiently as well as our core focus on providing reliable and affordable energy for Aucklanders. With these remaining businesses, we can grow here at home in Australia and internationally, leveraging a few but deep core competencies.

Secondly, for near on a year, I have led the search for a new CEO to replace Simon. We have been extremely focused in demanding to get the right individual. Simon, after announcing his intention to retire after 17 years as our CEO has worked with me to ensure there is a seamless transition and landing on the search. My fellow directors have all played a part in ensuring the best possible outcome in securing Chris Blenkiron. Chris will join us before Christmas and get some weeks of valuable overlap with Simon. Your company will be in good hands.

Thirdly, I have led and refreshed the Board with exciting new talent, and Vaughan Busby is seeking your support today. In addition, each incumbent Board member has decided to stand again so we get important continuity at this time of important change in the company and the industry.

Fourthly, the Board has a very constructive and open relationship with our majority shareholder Entrust, and I would like to acknowledge Entrust Chair, Denise Lee for her role in that. This is an important relationship to get right, and we work hard to achieve it.

Five, we landed a good regulatory outcome in the 5-year DPP4 path through -- sorry, I'll start again. We landed a good regulatory outcome in the 5-year DPP4 round through FY '24-'25 and again, engaged constructively with the Commerce Commission despite not always being an agreement, we found a way to work with that. These outcomes are the most important inputs to our business every 5-year regulatory period.

So for those 5 contributions that I thought I should highlight today, of course, there still remains much unfinished business. Like building even more customer focus into every interaction we have with them, making us easier to deal with. An internal culture with more challenge and urgency remains a high priority for me.

Vector is an excellent business, well run by an experienced and talented management group. I want to ensure though we are getting the most out of the company for shareholders, customers and the people of Auckland. If I can have your support, this is what I intend to focus my efforts on over the next 3-year term. And I thank you in anticipation of that support.

Good afternoon, shareholders. It was a privilege in 2019 to join the Vector Board and have the opportunity to contribute my infrastructure, energy and regulatory experience to Vector. I'm pleased today to offer myself for reelection.

Looking ahead, Vector as the nation's largest electricity network, is well positioned to support Auckland as it continues to grow. Not only will Vector provide a reliable network that keeps all these lights on, we are committed to our vision of creating a new energy future, which we've heard a lot about today. In practice, our strategy at its core is not just about utilizing technology to deliver energy in the most cost-efficient manner. Importantly, it's about meeting changing consumer demands, responding to climate change and the need to decarbonize and ensuring reliable and affordable energy solutions.

In my tenure at Vector, I have served at different times on each of the Board's committees, including currently the People and Remuneration Committee, the Finance and Audit Committee and the Nominations Committees. As the current Chair of the People and Rem Committee, I've had the chance to support Vector's commitment to develop our people, undertake succession planning and continually improve workplace culture and the health and safety and well-being of our workforce.

Previously, I had the great pleasure of serving on the meter transactions subcommittee, which led to our partnership with QIC, currently called Bluecurrent. Subject to that transit action, I was appointed as a Vector Director on Bluecurrent Australia and New Zealand. Not only has that transaction resulted in Vector having a strengthened balance sheet, Bluecurrent has grown and contributed to Vector's financial performance in line with our expectations at the time of the transaction.

Just like to acknowledge that since I've been on the Board of Bluecurrent, I've had the pleasure to serve with Simon MacKenzie as one of our other directors. It's been really beneficial to Bluecurrent to have the person who grew that business from the ground up continue to support it. And I probably particularly pleased that Simon will be continuing on the Bluecurrent Board for a period going forward.

Having said that, though, like my colleagues, I want to acknowledge his outstanding leadership while he's been the CEO of Vector. My previous governance roles include Chairing the Commerce Commission and the ACC and being a Director of several infrastructure companies like KiwiRail, AT, Auckland One Rail and SeaLink, among others. Furthermore, I currently chair Awanui Labs, New Zealand Post, and I'm Deputy Chair of NZX and AIA Insurance.

Having started my career as an economist, I have a strong interest and focus on business performance and strategy amongst the companies I serve. Looking forward, I would welcome the opportunity to continue to govern and grow Vector for the benefit of its customers and shareholders. I have the passion, focus and time needed to support the achievement of Vector's vision. I've appreciated the opportunity to address you all here today, and I seek your support for my reelection as a director. And I'll hand back to Doug.

Thank you all. Could I ask if in the room, there are any questions for the standing directors? Sorry, it's just a bit difficult to see out there with the spotlights. Okay. We have a question here.

[ Grant Plummer ], shareholder and a recipient of Entrust dividend as well. Thank you. With the movement into -- part of the address was the movement into using AI, what directors have skills in that area and what's the future with AI?

Good question, Grant. Thank you. Look, I probably am stepping out on a limb here. I don't think any directors have sufficient direct experience with AI given how new it is and given how we developed our careers over the last few decades. So let's be very clear about that. But we are partnering with people who are experts in AI in the areas where we think that's going to have the most early and significant impact. And that's Simon referred to Google X, AWS and people like this. But many businesses now are working out how they are going to cover the AI opportunity and the AI challenge, and we're no different from many.

We -- this afternoon, morning at our Board meeting, for example, approved our first AI use policy. So how we are going to have AI used and available within the company for our employees to use in all sorts of different ways. So we're at the very early stages. So I don't want to gild the lily here. We'll be buying in or consulting for that expertise when and if we see opportunities that we need to get moving on it quickly.

Over time, I think as we recruit and plan succession for new directors, a technology emphasis including AI, will become much more a part of that recruiting brief and looking for people who are more advanced in their experience with AI than the current crop.

Sir? Microphone is on its way.

A question for Vaughan, responding to the directors' speeches. I understand you're domiciled in Australia. So will you be physically attending meetings - Board meetings in New Zealand? And if so, who bears the cost of that?

Yes, I am domiciled in Sydney, and I'm attending all meetings in person physically. And yes, the company does bear the cost of that. And just going back to the previous gentleman's question, I do have some experience in generative AI.

Yes, if you recruit an overseas director, I'm very certain that the policies companies have is they pay the travel costs, accommodation costs for the director to attend the meetings in person. I'm not aware of any other -- any company that doesn't do that. We have a director based in Wanaka, for example, and [ Irwin ]. And that same policy applies in the hands travel to and from Wanaka to be here for meetings.

Vaughan came in a day early to this Board meeting today because we had a workshop yesterday, for example. So he is very accommodating and knows that the expectation is he turns up in person. We're not doing it on the phone or on a Teams call. And he comes out in the field. We've all had days out in the field with our staff and field service providers last week in the weather, and Vaughan will be here for those opportunities as well. I don't think it will be that many. We're probably, John, what, 8 or 9 Board meetings a year, yes. But you could -- yes, possibly you could double it for the other interactions that I definitely would expect Vaughan to be having as if he was living in based here in Auckland.

It's very difficult to find the experience in electricity networks in New Zealand at the size and the scale and the sophistication that we operate at.

Yes, exactly. So a lot of that experience relevant experience for us is resident in Australia. So I'm continually thinking about how many offshore, how many onshore directors just the right balance. And at the moment, Vaughan is our only offshore director and it's working very well. We've had nearly a year's experience -- sorry, 3 or 4 months for experience working with Vaughan. And so I'm confident that we found the right person for the right reasons.

Are there any other questions in the room before I go online? No. Okay. Sophie, any questions?

No online.

Yes, we'll have general business questions in a minute, yes.

No general questions online.

No questions online, okay. The proxy voting positions for these resolutions are now shown on the screen. Okay. That's very good. Thank you.

The next item of business is the proposed increase to the directors' people. We've carried out a benchmarking exercise with PwC. We'll put that online that paper from PwC online for shareholders to see. And we proposed an increase to be spread over 2 financial years as detailed in the Notice of Meeting. Are there any questions on this resolution from the room. Yes, down the front. Richard, we'll just get a microphone for you, so others can hear you. I can hear you from here though.

[ Richard Jenkins ], shareholder. When was your last fee increase?

The last fee increase was 2 years ago and the last -- and the increase before that was 13 years ago. So we've been a bit schizophrenic, frankly, about how long we wait between increases. I want to move to a -- 13 years was unacceptable, totally unacceptable. I want to move, and that's what this proposal recommends smaller and more frequent increases perhaps every 2 or 3 years, depending on the market. If the market is saying there's no justification, then we won't put one up. But we've clearly felt that there is justification for these modest increases over the next 2 years.

And let's keep an eye on the market so that we don't have these big, long interregnum periods where we don't change and then you've got to come and ask for a massive change, which might be at a very difficult time in the business cycle. That makes it even more challenging. So I think small and regular is sort of what I would like to be moving to.

Are there any other questions in the room? Okay. Sophie, are there any questions online?

No online questions.

Okay. Thank you. The proxy voting position for this resolution is now shown on the screen. I now move to the appointment and remuneration of the auditor. Under the Companies Act, the company wishes to record the automatic reappointment of KPMG as auditor. The company also proposes that the Board be authorized to fix the auditor's fee for the ensuing year. Are there any questions on this resolution in the room? Okay. Are there any other questions online, Sophie?

No.

Thank you. That ends the questions in relation to this resolution. The proxy voting position for this resolution is shown on the screen.

We have now finished all ordinary business, and I would like to open for any items of general business to be discussed or questions to be raised. As a reminder, acknowledging the interests of shareholders, please do not ask specific operational or customer service questions. Members of our customer team are available here in the room today and we'll be very happy after the meeting to take these types of questions. So let's start with those questions in the room, and I know we have 1 flagged down here in the aisle, please.

This will be directed, I think, to Simon, about the cost of power pole replacement. So in my street this year, there's been 2 power pole replacements earlier in the year. Now one of them, there was 17 people on site and 3 vehicles for a whole day. So we were out there in the evening, waiting for it to be finished talking to neighbors and estimating the cost of replacing 1 power pole is probably between about $8,000 and $12,000, which seems extraordinarily high for 1 power pole. There was another power pole done 2 months later, and that had 23 people on site plus 6 vehicles. Would these costs be approximately correct? And is there any way of reducing those costs? I'm sure you're looking into it, but I'd like an answer in person. Thanks.

I mean, obviously, the cost of each pole replacement varies depending on what material we're using, what size of pole, sometimes we put in double poles. That's probably around the ballpark. But the -- one of the big challenges we do have, which we have been seeking to address with Auckland Transport is all the traffic management requirements. Those are extremely material. And it's not just putting the pole, but typically, it's also how we do the line connections and the requirements. I don't obviously know what road you're on, but there are very specific Auckland transport requirements for traffic management, which we do seek to basically continually challenge with Auckland Transport in the order of 45% of project costs basically traffic management related.

So that is one of the challenges that we do have. We continue to look for ways to utilize as efficient as we can with some of the projects like pole replacements, new cross arms. And at the same time, they'll be doing -- we've undoubtedly be putting in a new pole, new crossarm and so forth. So it's a bit more to it than just the concrete pole, but yes, look, I think that's just the reality is the challenge does typically seem to around the safety, which we can't compromise but also those external factors rather than just putting the pole on the ground.

Paul Hutchison and I were out for half a day last week in the weather on the East Coast Bays road replacing 6 poles. We're just watching how our teams work that process. Like your observations, there was a lot of trucks and a lot of people but when you stood out on the footpath and talk to the teams and watch what they do for 3 or 4 hours, you understand why each of those pieces of equipment is necessary.

So for example, the hoist truck that lifts the people up to the top of the cross arms at the top of the pole, and you've got one person on one side of the poll, one person on the other side, disconnecting the power lines after somebody else has been earlier and turned off the power for that whole area. You've got 2 people up there that have been hoisted up. They've got to disconnect all crossarms, take down the lines, carefully drop them. There's somebody down on the truck managing that hoist. There's another person down on that truck, putting the new crossarms and all the gear that needs to be installed to replace. Then there's another truck that needs to come along with a crane that lifts the pole out when it's disconnected. And then another truck turns up to bring the pole that's going in.

So you get where I'm going. It doesn't take long and there were 2 traffic management vehicles on East Coast Bays road, if you can imagine, very busy roads almost like a highway. So you have to have one stopping the cars at that end and the other stopping the cars at that end. You had a driver on each of those trucks, and you had 2 people doing traffic management who then walked out into the road to make sure that it was all clear as we dropped the line from 1 pole on one side of the road to a pole on the other side of the road, had to roll that cable up, carefully place it on the other side and then open up the traffic again. It was all done within 3 or 4 minutes, but there were -- there was 40 to 60 minutes of preparation to get that 3 or 4 minutes of clear space.

[indiscernible]

Yes. So I had the same reaction to you initially driving up. Oh my god, look at all these trucks and these people. There was another interface that we observed. So our supervisor had to deal with a neighbor who was not happy about the trucks being over their driveway. We weren't prepared to stay until 6:00 at night because the power might not have gone on. And I wouldn't have liked to have dealt with the neighbors at that stage. But -- so complex, very complex, very complex.

[indiscernible]

Traffic management -- the cost of traffic management was 45%, did I get that correct?

Traffic management typically costs around, but certainly traffic management has increased significantly, and we're now starting to grapple with new rules being put in by Auckland Transport about times in which you can operate. And so then you get into this challenge to the point around if we can't operate on some arterial roads, and we can't start till 10 in the morning have to be finished by 3 in the afternoon. Basically remove all the traffic management cones and everything, being pretty much the only way to get the job done quickly is to put more people into it. So there's a raft of those kind of complexities.

So that would be adding to cost, the increased requirements on optimum transport.

We believe that does.

And magically, now Auckland transport is going to report to council. Everything is going to be better, maybe.

My overwhelming impression despite the observation of how many trucks, how many people was just how committed and how expert our people were, incredible. I was literally blown away by the skill and the agility and the ability to think on their feet because remember, no one workplace for Vector is the same. You don't go to the same bench and work every day. You don't go into the same factory every day. You don't go to the same office. You turn up on a job and everything is bespoke for that job that day.

And I have to say, being registered we were getting texts. So one of those jobs ran until nearly 8 p.m. And so we're getting texts about every hour telling it's now still delayed, still delayed. So you weren't having to wander down and talk to people and say, hey, when does the power come back on.

Finishing a job too early, creates its own problems, too, because then people come out and say, well, why the hell did I organize to get the kids baby set for the whole day. So you can't win. You over deliver and you under deliver at the same time, we understand all that. Try to do our very best.

Have a question here.

One question, Mr. Chairman. There has been reports in the press that [indiscernible] could be in the position to export energy. The only thing is it didn't state in what form. So I just wondered if you could like enlighten us on this one?

Well, I was trying to insulate you, Simon, but I have no idea how to answer that question.

Doug, well, I -- that is a unique proposition, let's say, but certainly not electricity because we kind of really have enough for ourselves. So I would only imagine that would be probably potentially if there was more gas mines, obviously, coal. But other than that, there's really no other source of energy that we could export from my understanding.

The thing I've learned from it, they stated this form of energy, whatever form it is, would be stored in Southland and then exported from Southland to wherever it's required. That's why I've been able to pick up. So I just thought someone here might know...

[indiscernible] hydrogen and so where there's excess energy in the market from, for example, solar, converting that to create hydrogen and then shipping the hydrogen offshore. That said, it's been a lot slower to take hold and a lot more expensive than people thought. So at the moment, to be honest, it's a big question mark as to whether it will happen in Australia.

[ Neil Anderson ] is my name. I'm a shareholder. I've got a question about solar on premises. There was questions for some of the gentailers about solar on premises and why they're not supporting it, and they seem to say that they thought it would disturbing the market. But I would like to know, as retailers, what's your view about supporting solar on people's properties or on business because at the moment, there is no support. In several countries, there is a lot of support for solar on premises. But here in New Zealand, zero. So I would like to know what as a retailer, your view is about that and whether you are thinking about supporting solar on your customers' premises?

I think it's well known that New Zealand has not had an incentive scheme running for solar or a subsidy scheme, whereas by contrast Australia went all out to subsidize solar. So that's the policy setting we deal with here in New Zealand. It's quite a mixed question between distributed solar on rooftops versus aggregate solar that is used to sort of fuel battery farms. And then that energy can be released when it's needed. So I'll ask Simon to speak more technically about solar and what we at Vector can and cannot help with. Maybe, Simon, would you be able to respond to that?

Yes, I agree with you, Doug. The New Zealand policy settings is very much market founded. So government has not had any intention to put in place subsidies like we saw in Australia. With regards to Vector as a distribution company, we support the ability for people to connect solar, to put batteries in. There's technical requirements for how they connect them to the house, how that has to have what's called bidirectional metering and the ability to isolate it because of, for example, a lineman is working on the line because there's a fault, you don't want the energy being fed back into the network and electrocuting the person.

But from our perspective, we do not retail electricity. We sell the line and services. With regards to the points Doug raised, absolutely, we have people looking to connect solar farms. So our focus is how do we connect them in and make sure they get connected into either our network or the transmission system. From a wider perspective, I think what we have seen is that solar typically is best paired up with batteries. The costs of the technology itself is coming down, but then the other side is the installation costs are very high.

A lot of customers don't necessarily just want to put that upfront capital in. So there are companies out there that provide, I guess, products and services for people to put solar and batteries into their homes. We have seen one of those though also recognizing in recent times, SolarZero going into liquidation, which obviously couldn't sustain its business model.

So as long as the -- one of the other challenges that has been prevalent and looking at solar and the economics of it is, when is the solar producing? And if you are exporting energy that you're not using in your home, is that actually getting a fair price in the market when people are buying it back, and that's something that's still a hot topic of debate. So I don't see that kind of market setting changing anytime soon. So it will be left to people that might want to provide those solutions to consumers.

One of the other unique characteristics that we've certainly seen in New Zealand is, I think the average turnover of people in homes is something like 7 years. So the payback for solar when you look at the upfront capital cost versus just buying the energy, it's quite a long payback period.

I can actually provide a context to the Australian, how it worked in Australia. So in Australia, it was certainly a government subsidy. So the government paid basically to encourage people to put solar panels on their homes. So it didn't have anything to do with the retailers or the distributors or anything like that. Yes, it was wildly positive in terms of getting the number of solar panels on roofs to the point where they now taken those subsidies off. And are looking at charging consumers, the privilege of injecting power into the grid. So it's almost come 360-degree areas.

Okay. So in other words, no plans really from Vector to be involved in that, okay. I have another comment actually on the way you run your business in this particular area, and that is Bluecurrent. And I'm aware that there are -- whenever there's a problem with Bluecurrent, it's Vector who gets the phone call about my meter is not going or Bluecurrent haven't come and done whatever they should do with my meter. It's damaging your business that you -- that down the track, Bluecurrent doesn't even do it. They get to Ventia with some other contract to come and do it. So there's about 3 people flipping the ticket on the way through. And Vector is the person -- sorry, not the person, the entity where the customer sees a problem, Vector is where the problem ends up at.

Your call center or your call centers gains the problem for the fact that Bluecurrent outsources it to somebody else who outsources it to somebody else. And you guys end up looking like the bad guy in this, and that's because somehow the business practice is, we don't want to have to deal with that, we'll give it to somebody else to deal with. So I think that you've got a very bad business model in that not taking -- you don't have the ability to deal with the problems that come up from metering.

Sure, you are when you're doing -- putting the poles in the ground and things that your guys going and doing, it might be a contractor going and doing it, but it's under the control of Vector, not when you're doing metering. When you're doing metering and I can tell you that from personal experience, but I don't want to raise that in the meeting. I'll just think your business practice needs to be looked at.

Okay. Thank you. I've got 2 directors of Bluecurrent here, so I'll maybe ask either or both of them to comment. But I personally don't have a problem with Vector's call center as the recipient for issues with the meter and then we send that communication to Bluecurrent to take on the remediation. I think we've got those resources. We're a 50% shareholder in Bluecurrent. I don't think I really want Bluecurrent replicating all that cost when they don't need to. We've got it, and we've got a very effective call center.

So I'm not perturbed by that observation so much. I recently -- just as a customer, I had communication from Bluecurrent in the normal way that they needed to upgrade my meter on the gas connection to my home. And I have to say the whole -- and it was a Ventia contractor who turned up to do it. The whole experience was just first class. But they had no idea who I was. So I think we all have our individual experiences, but I think we've got to be very careful that we don't jump to general conclusions about it because I acknowledge there's always room for improvement.

But whether the business model needs changing, I think we are best placed to think about that and to recommend that. And we would if we thought it was a good thing to do. But maybe I'll ask Paula or Simon or both to offer some comments.

I guess the reality is with the metering business, the deployment and management of meters in the field has always been managed by our field service partners. So whether it's Ventia or other contractors. We did have a small contracting business that was managing some of it, but fundamentally very hard to justify having the amount of people to manage all the metering fleet because utilization would have been exceptionally bad.

And also just because we cover all of New Zealand, one of the things where Ventia has been involved, and I'm not too sure with this being your experience, but we had to go through a total refit of -- not total refit, a change out of all the communication cards in the meters right across the country because of the 2G cellular network being shut down. So Ventia was our contractor that was doing that. And by and large, they did a really good job. I mean, it got through nearly 1.5 million meters in a very tight time frame to change out all the cards.

There will always be areas where we could improve and sometimes issues with metering can also just be passed on from retailers who may not know to contract Bluecurrent and because of the changeover to Vector, but certainly sitting on the Bluecurrent Board with Paula, who might want to also add is that, the whole service level and customer focus is something that we watch carefully. We do very much look at how the contractors' performance is. But to Doug's point, don't always get it, right, absolutely agree with that. And if we can learn from some of these things, we're happy to understand what went wrong.

I'm just going to add a couple of things just building on Simon's comments, it would be very hard for Bluecurrent, as it was for Vector, to directly employ the metering workers because it's quite sporadic. We might do a big rollout in a particular area and then we don't need to be back there for a number of years. So I think that part of the business model is driven really by the nature of the rollout and how often you need to go back for maintenance. We do keep really good stats on customer feedback.

We have tended to be -- perform extremely well in this market in New Zealand. Australia has always been a little more challenging for us, not just customer feedback, but generally in terms of getting the rollout at the scale and timing that we need. But it is something that we focus on a lot. So I think if you do have particular feedback about your own situation, it would be really great to feed that through to Bluecurrent.

Like Doug, I had my meter replaced, had been in our home for a very long time. And when the guy came to do it, I went out and he explained to me everything he was doing. And it was quite -- I thought it was a great service, and he had no idea that I was on the Board of Bluecurrent in Vector, but he was very accommodating to explain to me what he was doing and how he was doing it. And again, he was a contractor. He wasn't directly employed by Bluecurrent. But I agree with Simon, there's always room to improve. So we do welcome the feedback where we need to do better.

If you had a personal experience that you think it would be beneficial for us to know more about, very happy to hear that after the meeting. Thank you. Thank you for the question. At the back, hand up.

[ John Hume ], shareholder. You've divested HRV. Did you make a profit or loss when you sold it? And if so, how much?

We made a very significant loss on sale. And we were losing significant amounts of money annually in the operating of the business. And we could not find or see a way to turn that around after numerous efforts and numerous changes. The business model became significantly impacted through COVID, given it was an operate in-home model, contractors, franchise holders calling in on homes to install. So COVID destroyed the business for a time. It also was a business that operated across New Zealand.

And as you know, we are an Auckland-centric company. And we could not after a lot of effort, valiant effort, to try and turn the business around, we could not see a way to stem the losses that, that business was running year-to-year. We didn't sell it for a large amount of money. We basically transitioned it to an existing franchisee who was willing to take on the risk and the challenge of running the business. So that's the story with HRV. It's not a very good story. Sorry, I didn't mean to say anything there's no criticism of the HRV people, we just could not find as the owner a way to make it successful for us and our customers.

Okay. There's no more questions in the room as far as I can tell. Any questions online, Sophie?

No online questions.

Well, that's got to be some sort of record. No questions online at all. All right. Well, thank you. That ends the questions in relation to general business and Q&A. I will shortly close the voting. I don't want anyone to not vote because they were surprised I'd closed it out. So please ensure that you have cast your vote while we wait a moment for final votes to be cast.

Thank you for all your support of Vector as shareholders. I would also like to thank my fellow Board members for their input during the year and Simon and his team for their performance throughout the year. The results of these votes will be released to the stock exchange tomorrow. So it's a bit like an auction now. Any other bids? Has everybody voted we'll collect the votes now as Computershare people will come around and collect the votes. Last chance. That's great. Really good.

Okay. Well, I'm going to declare voting now closed, and the meeting is closed. Thank you again for joining us. A reminder that Simon and I and other members of the team will remain in the room in case there are any further questions over afternoon tea. Thank you very much.

Good morning, everybody. Welcome to Vector Limited's Conference Call and Webcast to discuss the company's financial and operational results for the full year ended 30 June, 2025. [Operator Instructions] I must advise you this conference call is being recorded today.

I would now like to hand you over to Vector's Chair, Doug McKay, who will take you through the call. Please go ahead, Doug.

Tena koutou katoa. Good morning, everyone. I'm Doug McKay, Vector's Chair. Today, we'll be going through Vector's financial and operational results for the full year ending 30 June, 2025.

Joining me on the call is Group Chief Executive, Simon Mackenzie; and Chief Financial Officer, Jason Hollingworth.

Here is the agenda for today's presentation. Simon will start with some highlights from our year and an overview of our key numbers. Jason will then present a more detailed look at our financial performance and our segment performance. Then Simon will give a short update on our outlook and market commentary. After that, I'll talk about the dividend. That will be the end of the presentation, and then we'll be available to take your questions.

I will now hand over to Simon to start the presentation.

Thanks, Doug, and hi, everyone.

I'm pleased to share some highlights of our year. I'll begin with some of the wider context and how we've responded to it. A lot has happened in the energy sector over the past year. And through it, we've stayed true to our Symphony strategy, which puts the customer at the center of our decision-making as we strive to deliver safe, reliable and affordable energy.

On 1 April this year, we entered into the start of the next 5-yearly regulatory cycle for electricity networks, known as default price path 4 or DPP4. Under DPP4, we've seen the Commerce Commission increase revenue for transmission and distribution charges, largely as a consequence of higher interest rates and inflation experienced within the prior DPP3 period. We're well placed to continue our investment approach in the DPP4 period, which is to avoid committing to high levels of capital investment in areas where there is significant uncertainty or to cover short demand peaks where there are other less capital-intensive ways to use available capacity and build network resilience.

We're very conscious that the cost-of-living pressures for consumers remain high and off the back of a challenging winter last year for the wider energy sector, we've seen a number of reviews into its performance. We await with great interest the release of the Frontier report, which the government has commissioned to help with its review into the electricity market. Vector has taken an active interest in the process and will continue to provide input into important issues such as security of supply and an efficient market for customers.

The DPP4 regulatory cycle for electricity distribution networks, which I spoke about earlier, has seen electricity network assets being repriced by the commission to reflect higher interest rates and the COVID-19 inflation impacts. This has resulted in price increases, which we recognize is hard on all consumers. However, in real terms, our electricity charges remain very similar to what they were more than 10 years ago.

I'd also note that these price increases are smoothed over the 5-year period from '25 to 2030. Another important issue for us is the reform to electricity distribution connections as announced in July by the Electricity Authority. The key issue we were concerned about was the funding of connections and the potential of having to move away from our policy of the people causing the growth, paying 100% of the growth costs, with the growth costs subsequently being shared across Auckland consumers.

The EA is continuing to engage on this, but at this stage, we don't need the Commerce Commission to reopen the DPP pathway to enable additional capital funding. There were a number of technical changes announced, which will add complexity, what is already a highly complex process, especially noting that we deliver around 15,000 new connections each year more than any other EDB. We'll need to make changes to our internal processes and we'll do so within the time frames that have been given with the customer mindset. The EA has also expressed that it's expecting some of these changes to be done in a nationally aligned way. We're already participating in those processes through our member association of the E&A, Electricity Networks Association, and we continue to engaging with the Electricity Authority as well.

Looking to gas, there is unprecedented uncertainty around the future of natural gas in New Zealand. This is driven in the near term by significant market uncertainty, scarcity of gas and rising costs and in the long term by lack of clarity over how gas distribution networks will be impacted by New Zealand's 2050 net zero emissions targets. The current regulatory settings were designed in a more stable environment where demand for gas was growing, and we are urging the Commerce Commission to update them to recognize this uncertainty and ensure any shift away from gas protects the interest of consumers and other stakeholders.

A new draft gas defined price path is expected to be announced by the commission later this year, and we're participating fully in the process so the commission understands our perspective, both for investors and customers. Key issues for us are that the commission recognizing the context the reset is occurring in, and this leads them to implementing steps to mitigate volume risk and stranded asset risk whilst also holding true to the financial capital maintenance principle that the regulation is founded on.

I'll touch on a couple of important events that have happened in the year for Vector. An example of our strategy to embrace strategic partnerships to help us innovate faster is the launch of GridAware. GridAware is a new AI tool that is reinventing the way we inspect and maintain the electricity network. This tool was developed as part of our partnership with X, Google's innovation lab and Tapestry. It's energy moonshot, and it's the first tool to be deployed on our network from this collaboration. GridAware helps us improve our network inspection processes by using aerial imaging and data captured by drones and helicopters to give us highly detailed views of the condition of our overhead assets. This helps us prioritize maintenance investment, but GridAware can also go further because as we've used -- we're training AI to help us complete condition assessments automatically. The commission has recognized the customer benefit of this project, awarding us an innovation project allowance in the final year of the prior DPP3.

Another event this year was Cyclone Tam in April, which was quickly followed by damaging thunder and lightning. This saw all our teams dealing with 2 events, not 1, which impacted many customers. We responded with a huge amount of work from our field service providers and our own staff to get the network restored as quickly and safely as we could. We always look to learn and then improve customer outcomes in these events. And shortly after Cyclone Tam, we began trialing a new digital tool that combines various data sets to help us analyze and identify storm impacts at a higher granular level, giving us valuable insights into what is often a highly dynamic environment.

Our business portfolio has continued to evolve. The completion of the sales of the Natural Gas Trading, Vector Ongas and our shareholding in Liquigas are examples of successful transactions that align with the risk and future operating environment of each business. The completed transactions enable us to concentrate on the core strengths and demands of our regulated electricity and gas networks and explore growth opportunities such as through Vector Technology Solutions or our investment in metering business, Bluecurrent.

On 1 August, after balance date for these results, Vector announced to the NZX, the sale of HRV. Our commitment to Auckland's growth and electrification remains strong, and the region continues to grow despite the broader economic slowdown. We're working closely with customers to ensure we understand, prepare and ultimately, enable their evolving needs. In 2020, we set a target to reduce Scope 1 and 2 emissions, excluding electrical line losses by 53.7% by 2030. This year, we recorded a reduction of 55%, which is calculated against the businesses we now have, meaning it reflects our actual emissions reductions, not from those businesses we've sold. This result was driven by innovation in technology and processes, with successful initiatives now embedded into our operations. We'll continue to focus on emissions targets, and we recognize there could be some volatility in maintaining and improving our overall emissions.

Now, I'll move to financial results. Our financial performance for the year has been solid. For continuing operations, revenue is up 9% and adjusted EBITDA has increased by 16%. I'd just like to note that with regards to revenue, we report financial accounts of $1.104 billion, but our continuing operations after capital adjustments, our revenue is $894 million. This is the result of a higher revenue with regards to EBITDA, particularly in the last quarter where the DPP4 has come into effect. We've also maintained prudent financial management across the group.

Net group -- sorry, group net profit after tax for continuing operations was $154.7 million, which includes a $37 million impairment of the gas distribution business. Underlying profit, excluding the impairment, was $191.7 million. The impairment recognizes our latest forecast for gas network connections, where we see a decline in net connections from financial year '26, as a result of significant market uncertainty, scarcity of gas and rising costs, as mentioned earlier. Following the impairment, the carrying value of the gas distribution business is consistent with the value of the regulated asset base.

Gross capital expenditure is down 6%, reflecting a number of factors, including the timing of large projects. Growth-related capital investment was marginally up, reflecting Auckland's continued growth, although the pace has softened due to the broader economic environment. Operating cash flow was up 16%. Jason will now talk you through these details further.

Thanks, Simon.

This slide shows the segment contributions to the top line adjusted EBITDA result. We're now reporting under a new segment structure, which we announced at our half year. This follows the sale of the businesses within our previous Gas Trading segment. The new structure is electricity, gas distribution and other. Other is a non-reportable segment and includes Vector Technology Solutions, HRV, Vector Fiber, Equalise and our group eliminations. Our corporate costs are now allocated out to the revenue-generating business units, in line with the regulatory allocation methodology.

Next slide. Next, we have our group net profit after-tax result. You can see the year-on-year increase is driven primarily by the increase in adjusted EBITDA. Net interest costs reduced $20 million due to the lower interest income -- due to lower interest income as FY '24 included the interest we had received on the cash balance we held post the sale of metering. This year, as Simon mentioned, we recognized a $37 million impairment of the gas distribution business. But noting in the prior year, we had a $60 million impairment for the same business.

Gross capital expenditure and net capital expenditure, where we net off capital contributions received from customers were both down on the prior year. Capital contributions were up, largely attributable to big relocation projects such as safety improvements to State Highway 16 and system growth contributions driven by higher incremental capacity. Year-on-year, electricity replacement CapEx has decreased by $33 million, primarily driven by the timing of large projects.

Let's look at our group debt. Vector's net debt is relatively flat year-on-year at $2.15 billion, and our credit rating is BBB+ with a stable outlook.

I'll now move on to the segment performance. Let me start with electricity. Revenue was higher due to pricing adjustments, including the new DPP period, which began on 1 April, 2025. There were higher pass-through costs such as transmission costs and also higher rates and levies, partly offset by prior period wash-up adjustments. The higher OpEx is mostly due to the higher pass-through costs, which are recovered through revenue. Underlying OpEx, which excludes pass-throughs, was flat. Total net connections continue to grow, but at a slower rate than the prior year, again, reflecting a broader economic slowdown.

Gas distribution. Gas revenue was higher due to price increases and the prior period wash-ups, partially offset by lower volume. Volumes are up 8.5% lower compared to FY '24 due to lower demand from residential, industrial and commercial sectors. OpEx costs are consistent with the prior year. Total connections increased 0.2%, but the rate of connection growth was down on the prior year. Simon has already spoken about the wider context around gas, and this has led us to taking prudent steps to optimize our asset management strategies to maintain network safety and reliability while reducing asset stranding risk. One of the ways we're doing this is by reducing asset replacements and increasing maintenance, which sees a reduction in CapEx and a corresponding increase in OpEx.

Bluecurrent. Our investment in the Bluecurrent metering business continues to perform in line with expectations. We've received $51.8 million of distributions from Bluecurrent in FY '25.

I'll now hand back to Simon.

Thanks, Jason.

As with the half year, we will be providing guidance on adjusted EBITDA, gross CapEx and capital contributions. For financial year '26, the range is shown on the slide. But in terms of adjusted EBITDA, the range is $470 million to $490 million, gross CapEx of $520 million to $590 million and capital contributions of $180 million to $230 million.

For adjusted EBITDA, the forecast increase on financial year '25 is driven primarily because financial year '26 is the first full year of the new electricity price path, DPP4. The forecast increase in capital expenditure is linked to expected customer-driven growth and our continued investment in the network.

Just before I hand back to Doug, as this is my last call, I'd like to especially thank all our staff, field service providers, advisers, call center staff and a host of other people for all their hard work, not only through this year, but also through the ups and downs of the 17 years I've been CEO. So, I really appreciate that.

And I'd like to now hand back to Doug.

Thank you, Simon.

I'll remind you that at our half year results announcement, we published an updated dividend policy, which is available on our website. The Board has determined an unimputed final dividend of $0.13 per share, taking the full-year dividend to $0.25 per share. This represents an 85% payout of free cash flow in the midpoint of the 70% to 100% range as stated in our policy. Shareholders should not interpret this year's payout as being an indication that future dividends will be in the midpoint of the range. The dividend will be paid to shareholders who are on the register at 5th of September with payment made on 17 September.

That brings us to the end of our presentation. But before we get to questions, this is Simon's last results call for Vector. On behalf of the Board, I'd like to acknowledge Simon's departure from Vector at the end of calendar 2025 and thank him for his extraordinary service. He's an outstanding Chief Executive and highly respected Vector and industry leader. The Board wishes him well for his future and is grateful for his ongoing support while the recruitment process continues for a new CEO.

Simon, Jason and I are now happy to take any questions.

[Operator Instructions] Your first question comes from Andrew Harvey-Green with Forsyth Barr.

Yes, I'd just like to acknowledge your stint as CEO as well, Simon. I think it's really impressive. And I think it must be pretty much the longest-serving Chief Executive in the NZX 50 at the moment, and all the best for the future.

First question I had was just around the dividend and the sort of the comments around, we shouldn't expect 85% payout ratio to sort of be sort of a guide going forward. I just want to clarify, are you sort of talking about -- we should be thinking about the dividend going forward as a more progressive policy? Or put another way, what would be driving Vector to go towards the top or the bottom of the range? Is it really around sort of CapEx expectations and maybe where the EA lands on capital contributions going forward?

You've hit on the right issues there, exactly. Plus I'd add another one, which is every 5 years, we get a DPP reset and we have no visibility of that going forward into future periods. So, there will be a number of moving parts. CapEx, regulation around EA on connection charges, for example, is a very material change should that change. It's not going to until they review again possibly in 2030, I think they said and the ongoing cycle of the DPP process every 5 years. So yes, we just wanted to make sure that our policy says a range of between 70% and 100% of cash flow. And it just so happened that where we landed this year was right in the middle of that, and we're just making sure people don't start to assume that would be our target going forward.

Great. Next question is just around the HRV and the EBITDA contribution this year. And I guess, thinking about going forward, I guess it's currently in our numbers, but my understanding is it has been a little bit of a drag on earnings. Are you able to give us an indication of what it was this financial year?

I can't, Andrew, but it has been a drag and it has been negative. It's sort of under $10 million, but it's been negative, just to put it in ballpark.

Yes. And you provided the metering cash contribution at the half year in terms of guidance. Are you able to give us any indication around FY '26? We're looking at kind of similar numbers to FY '25, maybe a touch bigger?

I think it will increase slightly, Andrew, as it has this year. So, I expect that trajectory to continue to lift as they continue to deploy meters in Australia.

Okay. And last question is just around -- you announced that strategic review of the fiber business back in May. Are you able to give us, I guess, a bit more color on that and sort of time frames around when you expect that review to be complete?

Yes, Andrew. Yes. Absolutely, we're still working through that. One of the big considerations for us is that the fiber network was firstly built primarily for connectivity to all our electricity asset substations, monitoring for very sophisticated kind of digital platforms to coordinate the network. So as part of that overall review, that's something that we're working through, but we are still conducting that and we expect to be moving to the next stage of the process probably within a month or so. We don't expect there to be any announcement before the end of the year. But definitely, we're still on track to go through that review. As we said, it's not any definitive decision. And obviously, when we get into a position to know where that sits, we'll advise the market. But yes, as it stands, we're not doing anything other than continuing with the process.

[Operator Instructions] Your next question comes from Stephen Hudson with Macquarie Securities.

Just to add my voice to Andrew's as well. Congratulations on the 17 years, Simon. Thanks for all your insights and help, and good luck with the next stage of the adventure.

A few questions. Just on the metering business, Bluecurrent. The $52 million distribution this year, is that a reasonable base for FY '26, Jason? Is there anything unusual going on in that level of distribution? Or is that repeatable?

Yes, I think it's repeatable. As I mentioned to Andrew as well, that if they continue to deploy meters, that should start to lift again as it has in '25.

Got you. And just imputation -- sorry, sort of reasonably boring questions, but just remind us when you're expecting to be able to, I suppose, fully impute the dividend would be a useful flag?

Yes. Look, I think FY '28, potentially, there's a few moving parts here. We had these tax rules change recently, but that's based on what we currently understand, we expect around FY '28.

Excellent. And the electricity EBITDA step-up, I think it was $57 million. Can you give us a broad split of the annualized DPP4 benefit versus CPI wash-ups from prior years?

Not off the top of my head, Andrew. There's obviously a quarter only of the DPP in there. So yes, happy to look at that and perhaps chat to you about that. But we've got -- only got 1/4 of that DPP benefit in this year's result. And from memory, we did disclose the whole year benefit.

Sorry, what was that?

We did disclose the whole year impact of the DPP reset back when it was announced. So, we've got 1/4 of that in this year's result. I can't recall the exact number we disclosed.

Okay. I can follow up with you. And then, Doug, just maybe one for you. Just can you give us an update on the CEO sort of process as well?

Yes, we're getting very close, and I would expect an outcome in the next few weeks, not able to say anything further at this point, but a process very thorough, internal, external, and we're getting very close now. So, I'm very optimistic that we will announce a new incumbent, and there will be the opportunity for a small amount of overlap with Simon, which I think will be valuable.

There are no further questions at this time. I'll now hand back to Mr. McKay for closing remarks.

Okay. No further questions. We'll end the teleconference and webcast. If analysts and investors have further questions, please feel free to contact Jason. On the media -- for the media, please contact Matt Britton or call our usual media phone number.

Thank you, everyone, for your interest and for joining us.