Energy company Vector blames regulated price reductions for a $35 million drop in its annual profit.
Vector has reported a net profit of $171.3m in the year ending June 30, down 16.9 per cent from last year's profit of $206.2m.
Revenue fell 1.6 per cent to $1.26 billion from $1.28b, while adjusted operating profit fell to $580.7m from $630.5m.
"The regulated price reductions on our energy networks were responsible for most of the fall," the company said.
Vector's final dividend is flat at 7.75 cents a share, taking the total dividend for the year to 15.25c, up 0.25c a share compared with last year.
"This is the eighth consecutive year of increases, reflecting prudent management of our capital in the lead-up to regulator-imposed price reductions on our energy networks and our determination to provide investors stability through regulatory periods," Vector chairman Michael Stiassny said.
"It also reflects our success in delivering services attuned to our customers, growing our portfolio of businesses and driving operational excellence.
"However, further recent regulatory actions place additional pressure on future dividends and investment in our regulated assets."
Vector has benefited from the push for "smart" electricity meters and had installed 675,555 smart meters by June 30.
"We are contracted to install almost 900,000 smart meters, up from 764,000 a year earlier, following new contracts with Contact Energy and the SmartCo consortium of electricity distribution businesses," Vector Group chief executive Simon Mackenzie said.
The company has hit out at the Commerce Commission, with which it has had a battle over the prices it can charge for its monopoly network.
"Because the regulator's assumptions for asset revaluation rates do not match the actual rates, we are not able to generate the returns determined by the regulator," Mackenzie said.
"PwC, for instance, has calculated that differences between recorded inflation and the commission's forecasts for inflation will result in electricity distribution businesses recovering $150m less than they are allowed over the 2013-2015 regulatory period.
"The regulator's model takes no account of this. Over the current regulatory period, this has cost Vector $57m, and we are seeking to recover this amount."
Mackenzie welcomed the Government and Auckland Council's target of 39,000 new homes in Auckland over the next three years.
"We have invested in good faith to support this growth, with capital expenditure on our electricity network rising 8.1 per cent, or $12.1m, in the 2014 financial year to $162.3m, while capital expenditure on our gas transmission and distribution networks rose 26.9 per cent, or $10.1m, to $47.6 million," he said.
"Nevertheless, the unattractive cashflow profile and the allowable returns on our regulated networks are making it increasingly difficult to advocate for incremental capital to be allocated to our regulated businesses, especially when we see the potential for much more appropriate commercial outcomes in our non-regulated activities."