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]. Hello, everyone, and welcome to our presentation this morning. I'm Doug McKay, Vector's Chair. Today we're going through Vector's results briefing for the half-year ended 31 December 2024. Joining me on the call is our Group Chief Executive, Simon Mackenzie, and Chief Financial Officer, Jason Hollingworth. Before I hand over to Simon, I want to acknowledge the release to the market this morning that Simon will be stepping down at the end of June. As I said in the release, Simon is an outstanding CEO, and his leadership of Vector over many decades in different roles is truly impressive. Simon has also made a significant contribution to the wider energy industry with his depth of experience, no-nonsense style, and his advocacy for customers. My sentiments reflect the views of all the Vector board.
We'll start the presentation with comments from Simon on overall group performance, then Jason will go into more of the detail. Simon will then talk about the current and future market outlook, 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 Simon to start the presentation.
Thanks, Doug, and hello, everyone. Before we get underway, I'd just like to remind you that, as we've talked about for some time now, that we've completed the divestment of all the businesses in our gas trading segment, so the results presented here are for continuing operations. We're also presenting our results in new segments, which are Electricity, Gas Distribution , and Other. Other includes HRV, fibre, and Vector Technology Solutions. Group results for the half-year to 31 December 2024 have been strong. Revenue is up 11%, driven by Electricity revenue, and this is driven by an increase in Adjusted EBITDA for continuing operations to $202 million. This is up 16%, or $28 million, over the same period in 2023. As a reminder, Adjusted EBITDA excludes customer contributions, which is how we fund new customer connections to the network and their share of the associated reinforcement of the network.
Net profit after tax for continuing operations was up 50% on the prior period. However, the prior period results, including an impairment of NZD 60 million on Vector's Gas Distribution network. Gross capital expenditure for continuing operations was NZD 261 million, an increase of 12% on the prior period. So, I'll now hand over to Jason to go over the detail behind these high-level numbers.
Thank you, Simon. This slide, slide seven, shows the segment contributions towards the Adjusted EBITDA figure. As Simon mentioned, these are the new segments, which are Electricity, Gas Distribution , and Other. Adjusted EBITDA from Electricity was up NZD 25 million, which was predominantly driven by high levels of historic inflation, which we are only able to recover through pricing due to the regulatory model. Next slide. Net profit after tax from continuing operations is NZD 118 million. One driver of this is Electricity revenue, driving the higher Adjusted EBITDA. Other drivers are higher capital contributions, which are linked to a higher spend for customers connecting to the network, and the impact on the prior year's results of a NZD 60 million impairment of our Gas Distribution business. Gross CapEx has increased NZD 27 million to NZD 261 million, and net CapEx, after deducting capital contributions, was down 3% to NZD 138 million.
Capital contributions were up 32% to NZD 123 million, largely attributable to new data centres, a large KiwiRail project, and system growth contributions driven by higher incremental capacity. There was a year-on-year decrease in replacement CapEx on the network, primarily driven by work completed last year to improve resilience and restore the network after the extreme weather events in FY 2023. Next slide. Debt and gearing has fallen since the sale of a 50% interest in Bluecurrent. Vector's Standard & Poor's credit rating remains at BBB+, with a stable outlook. We expect our gearing levels to increase in the future, given forecast capital expenditure and our new dividend policy. We will maintain an investment-grade credit rating. Next, we'll move into the segment performance. Next slide. Electricity revenue is higher predominantly due to price adjustments reflecting the impact of high historic inflation.
We're now recovering the higher inflation through higher prices as per the regulatory model, where there is a two-year lag. OpEx costs are largely consistent to the prior year. Total net connections continue to grow, with Electricity connections up 1.5% on December 23 to 628,990. However, new connections were 2,079 lower than the first half of FY 2024. This was across all customer segments and is reflective of the broader economic slowdown. Gas Distribution . Gas revenue was higher due to price increases and a prior-period wash-up partially offset by lower volumes. Volumes were 7% lower compared to the first half of FY 2024 due to lower demand across the residential, industrial, and commercial sectors. OpEx costs were largely consistent on the prior year. Total net connections continue to grow, with gas connections up 0.4% on December 23 to 120,761.
However, the number of new gas connections was down on the first half of FY 2024. Bluecurrent. Vector's 50% equity accounted share of Bluecurrent's FY 2025 first half net loss was $10.8 million. This loss is due to depreciation costs and amortisation of intangible assets recognized when Bluecurrent was established as a joint venture. While this business is making a net loss, it is still cash-generative and performing in line with expectations. We're forecasting to receive NZD 50 million-NZD 55 million in distributions for the FY 2025 year in relation to our 50% shareholding. The net book value of Vector's investment in the Bluecurrent joint venture is NZD 647 million at December 24. I'll now hand back to Simon.
Thanks, Jason. With the dividend policy linked to cash flow going forward, we will be providing guidance on Adjusted EBITD A, gross CapEx, and capital contributions. For FY 2025, we expect Adjusted EBITDA to be in the range of NZD 400 million-NZD 415 million. Gross CapEx, we expect to be in the range of NZD 495 million-NZD 525 million. And capital contributions, we expect to fall within NZD 215 million-NZD 245 million. We're currently in the last phase of the DPP-3 regulatory period, which will end on 31 March 2025. The new DPP-4, Default Price Path 4, will start on 1 April 2025. This is the start of the new five-year regulatory period as set by the Commerce Commission. I'll now hand back to Doug.
Thank you, Simon. The board has determined an interim dividend of NZD 0.12 per share with no imputation. As we mentioned in our market release, the board has approved revisions to the dividend policy. These revisions link the dividend to cash flow. The policy aims to distribute between 70%-100% of free cash flow. The intent is to align the policy with the Commerce Commission's five-year regulatory cycle, as this is a large part of what determines our revenue and earnings in each five-year period. The revised policy is available now on our website. We use special dividends in FY 2023 because of the sale of the metering business and in FY 2024 because we were waiting for the final outcome of the Commerce Commission's regulatory reset for the DPP-4 before confirming our new dividend policy. That concludes our presentation.
And just before we move to questions, I'd like to thank Simon and his executive team and everyone else at Vector and our field service providers for their hard work over the period to deliver for Vector customers and shareholders. Simon, Jason, and I are now happy to take any questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on the speakerphone, please pick up the handset to ask your question. Your first question comes from Phil Campbell from UBS. Please go ahead.
Yeah, good morning, everyone. Just a couple of questions from me. The first one's just on Bluecurrent. There's not a lot of detail in terms of how operationally it's been going in terms of the deployment of meters in Australia and New Zealand. I'm just wondering if you can give us a bit of an update on how the smart meter rollout's going in Australia, for example, and just how Bluecurrent's kind of executing on that.
Yeah, hi, Phil, Simon. Look, from our perspective, we are pleased with how things are tracking in Australia. As you probably heard, there's been the regulatory decisions made in Australia for 2030 for full-scale rollout of smart meters. As you appreciate, there are different tranches that come up from time to time with regards to when retailers over there seek to contract, and so that's still pretty active in that space. But from our perspective, we continue to deploy meters, and the business continues to perform in line with the expected plan that we had jointly developed with QIC.
Any commentary on kind of the annual run rate in terms of deployment of meters in both countries, or?
Not at the moment, but we definitely, obviously, New Zealand versus Australia is very different as most of the meters are deployed in New Zealand. But Australia, we're happy with how we're tracking over there.
Okay. The second question was just on the dividend policy. I suppose I'll just be interested in kind of how the board went through the process of coming up with this policy. And also just to make sure, it sounds as though you have a different policy for each regulatory period. Is that how I'm reading that, or is that wrong?
Doug McKay here, Phil. No, we won't be having a different policy for each regulatory period, but the settings in each regulatory period may well change depending on what the Commerce Commission lands for every one of those five-year periods. The board has been working with Simon and Jason for some six or eight months now on revisions to the dividend policy. We got some external help to understand the options out there that other people were using. We compared it to what we did. We worked with our largest shareholder Entrust on what their requirements would be for the company to understand the shareholder's view. And we've ended up deciding that cash flow is the basis on which the dividend policy should be established. Now, the policy, if you read it very carefully, is flexible enough to take into account changes in those five-year settings.
So we are literally moving in five-year cycles now on the dividend in terms of the settings, but the policy is the same right through that.
In terms of quantification for 2025, we've done our own calculations and kind of I think we've got a range of like NZD 0.23 to over NZD 0.30. Is our math kind of correct there?
Look, I wouldn't comment on the final year outlook for the dividend. We haven't discussed that as a board, but we're very confident in the NZD 0.12 that we're delivering at the half-year. There's no special additions to it. Simon?
Yeah, the only thing I'd comment is that if you look at the policy, you've got to remember that we still sit in DPP-3 for nine of the twelve months. So the reality there is we only get three months of the new regulatory DPP-4 period. So the revenues that flow from that, given that there is an uplift in revenue, is only three months. So I think that should hopefully help with the other information that's provided by Jason on CapEx and customer connections.
And the policy obviously talks about attaching imputation credits to the maximum extent they're available. So obviously that wasn't a main driver of the policy. It was more the cash flow that was the main driver. So you could end up paying out unimputed dividends potentially or partially imputed dividends.
Yeah, look, I think the intention, Phil, is as soon as we start paying tax and at the moment we don't pay tax because we've got some tax assets there. When we start paying tax, we will impute the dividends to the maximum extent we can. So they'll come through when we start paying tax.
Okay. Awesome. That's all the questions I had.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. There are no further questions at this time. I'll now hand back to Mr. McKay for closing remarks.
Okay. Well, that brings us to the end of the teleconference. So thank you all. If analysts or investors have any further questions, please feel free to contact Jason. And for the media, please contact Matt Britton or call our usual media phone number. Thank you, everyone, for joining us.
Thank you.