EBITDA fell 3.7% but PBT rose 15.7% as below-EBITDA costs eased

Adjusted EBITDA fell 3.7% to $263.6m even as revenue rose 5.7% to $684.6m, indicating cost pressure at the operating line. Yet profit before tax rose 15.7% to $153.6m and net profit after tax rose 14.2% to $115.5m, implying roughly $31m of combined depreciation and net finance cost relief between EBITDA and PBT. Operating cash flow of $283.6m was strong, but capex of $266.4m left only $17.2m of pre-lease free cash flow. Net debt rose to $3.1b, lifting net debt to EBITDA from 10.9x to 11.7x — the upper edge of Annolyse's historical baseline (3-period mean 8.9x). The interim dividend was held at 8.25 cents per share.

Revenue growth of 5.7% sits within the company's historical range, but adjusted EBITDA fell $10.2m. Segment results were modestly higher in Regulated Networks ($257.4m vs $246.5m) and Metering ($86.0m vs $83.1m), with Gas Trading slipping to $12.2m from $14.6m. The shortfall between segment progress and group EBITDA points to unallocated cost increases. This matters because cost-base persistence will continue to weigh on EBITDA even as regulated revenue grows.

Operating tailwind below EBITDA. PBT growth of 15.7% is above Annolyse's recent baseline (4-period mean -42.7%) and sits well above EBITDA's decline. The implied ~$31m drop in combined depreciation and net finance costs is not explained in the supplied disclosures. This matters because it represents the swing factor in reported NPAT; if it is non-recurring, the underlying earnings trajectory is weaker than the headline suggests.

Leverage drifting up against a heavy capex programme. Net debt to EBITDA moved from 10.9x to 11.7x — the upper edge of Annolyse's 3-period range of 6.3x–11.9x. Capex equal to 38.9% of revenue continues to absorb operating cash flow. This matters because credit headroom is thinning at a time when EBITDA is contracting.

Annolyse's historical baseline indicates HY21 contributed 50.6% of FY21 revenue and 53.3% of FY21 EBITDA, so historically the second half has been the smaller EBITDA contributor. Annualising first-half revenue implies a $1.37bn run-rate, ahead of FY21's $1.28bn. Whether the EBITDA decline persists depends on the persistence of unallocated cost pressure and recovery in Gas Trading margins, neither of which the release addresses directly. That gap limits visibility into the FY22 EBITDA shape.

That cushioned operating cash while EBITDA declined, but it is a balance-sheet timing benefit, not improved underlying earnings power.

Underneath, the durable read is mixed. Capex grew 2.2% to $266.4m and consumed almost all of operating cash flow, leaving pre-lease FCF at $17.2m — only 14.9% of NPAT. The 15.7% PBT growth depends on the ~$31m fall in below-EBITDA costs; if that reflects timing in finance costs or one-off items rather than structural depreciation roll-off, the run-rate is weaker than reported. The effective tax rate of 24.8% was slightly higher than the prior 23.8%, so tax did not flatter the result.

This briefing cannot assess Vector's regulatory reset trajectory, the durability of the below-EBITDA cost reduction, or the specific drivers of Gas Trading margin compression from the disclosures supplied.