Business Description:
SP AusNet (SPN) is engaged in the diversified energy infrastructure business in Australia. SPN operates Victoria's primary electricity transmission network and electricity distribution network in eastern Victoria plus a gas distribution network in western Victoria. SPN has four main divisions, including Electricity Distribution, Gas Distribution Electricity Transmission and Select Solution.

Strategy Analysis:
SPN's strategy is to invest in energy networks in Australia and New Zealand and also position itself to participate in future acquisition opportunities of publicly-listed, privately-held or government owned energy network businesses. Near term focus is on the improvement of existing networks through capacity upgrades, network efficiencies and customer growth. SP AusNet reported NPAT down 11.9% to $146.2m for the half-year ended 30 September 2011. This includes a $28.3m increase in income tax expense primarily due to a number of tax benefits received in the prior period associated with tax consolidation legislation changes, investment allowance deductions and additional research and development deductions. Revenues from ordinary activities were $830.5m, up 5.7% from the same period last year. The increase in revenue arose from regulated price increases, additional revenues from the Advanced Metering Infrastructure (AMI) roll-out program, and increased activities associated with Select Solutions. Basic and Diluted EPS was 1.47 cents compared to 2.38 cents last year. Net operating cash flow was $251.5m compared to $233.9m last year. The interim dividend declared was 4.0 cents compared with 4.0 cents last year.