Vector adj. EBITDA up 19% as gas trading exit clouds 9.2% NPAT decline

Reported NPAT fell 9.2% to NZ$113.0m and PBT rose 1.1% to NZ$170.4m on revenue of NZ$594.4m (+6.1%). On the cleaner continuing-operations perimeter, the release reports adjusted EBITDA of NZ$240m, up 19%, and continuing NPAT of NZ$113m, down 4%. The remaining ~5pp gap to the reported NPAT decline is the loss of HY25's NZ$7.3m gas trading contribution.

Capex stepped down 16% to NZ$222.7m, operating cash flow was NZ$325.1m, and the interim dividend rose 4.2% to 12.5 cents per share. Net debt of NZ$2.1b was broadly flat versus HY25's NZ$2.2b.

• Continuing adjusted EBITDA up 19% on revenue up 6.1% implies meaningful operating leverage in the regulated electricity and gas distribution stack. Electricity segment revenue fell to NZ$445m from NZ$489m but result rose to NZ$220m from NZ$200.4m, lifting derived segment margin to 49.4% from 41.0% — the dominant driver of the EBITDA lift, and a question of whether it reflects regulatory pricing, cost discipline, or mix.
• Dividend now sits above reported NPAT. Payout vs NPAT is 110.6% on the canonical calculation, while FCF pre-lease of NZ$102.4m covers about 91% of NPAT. The gap is funded by the lower capex envelope rather than earnings growth, which matters because a utility committed to a long-dated network build cannot rely on capex deferral indefinitely.
• Leverage is unchanged in dollars but elevated for a utility. Net debt of NZ$2.1b against a continuing-ops base that has just shed gas trading earnings means the perimeter has tightened even though the debt has not. Annualised against adjusted EBITDA the multiple sits in the high 4x area; against reported half-year EBITDA the supplied 6.3x figure is unannualised.

The supplied second-half shape shows HY25 was 50.8% of FY25 revenue, so the revenue cadence is roughly even and the HY26 annualised run-rate of NZ$1.2b points to modest top-line growth versus FY25's NZ$1.1b. The HY25/FY25 NPAT split (0.1% / 99.9%) is not a useful seasonality guide because HY25 reported NPAT was distorted by a discontinued-operation loss subsequently reversed; investors should not extrapolate a second-half NPAT bulge from the prior pattern. Read against the release's "in line with expectations" framing, the HY26 print supports continued mid-single-digit revenue growth and double-digit adjusted EBITDA growth on the continuing perimeter.

Working capital provided modest support — receivable days fell to 26.8 from 51.9 — but the prior-period balance was inflated by the gas trading book now divested, so this is more a perimeter change than a sustainable working-capital release.

Two quality flags weaken the read on durability. First, capex of NZ$222.7m is 16% below HY25's NZ$264.4m and 37.5% of revenue versus 47.2% prior; on a regulated network this is more likely a timing or programme-shape effect than a structural step-down. Second, reported EBITDA of NZ$336.3m sits well above the company's adjusted EBITDA of NZ$240m, a divergence that typically reflects fair-value or non-cash items — the adjusted measure is the cleaner cash-earnings proxy and is the one the release leads on.

This briefing cannot assess regulatory price-path assumptions, hedge or fuel-cost positioning, or the underlying volume/price split inside the segment result without the detailed segmental and regulatory disclosures.