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SALE OF KAPUNI GAS TREATMENT PLANT AND ASSOCIATED ASSETS TO TODD ENERGY 701,923 9KG BOTTLE SWAPS, A 6.6% LIFT FROM FY19 116,024 LIQUIGAS LPG TOLLING (TONNES), UP 5.0% FROM A YEAR EARLIER $ 33.9 M ADJUSTED EBITDA 1 , UP $2.6M FROM A YEAR EARLIER
In December 2019, Vector announced the sale of the Kapuni Gas Treatment Plant and associated assets to Todd Energy. This transaction was completed on 31 March 2020. The deal aligns our shared interests in seeing the Kapuni field developed further. New natural gas and LPG supply agreements have been secured as part of this deal to ensure Vector has long- term access to gas products on behalf of our customers. The sale has had no material impact on adjusted EBITDA earnings for the FY20 result. Looking ahead to FY21, the decline in adjusted EBITDA is largely offset by interest income on the sale consideration. Interest income is reported below the line as part of net interest costs. Gas volumes Natural gas volumes were down, due to field outages and constraints on the supply side. However, the teammanaged these challenges well, which led to improved margins over the period.
Total natural gas supply in the period was 12.4 PJ, down 23.0% on last year, largely due to the loss of a major customer part way through the year. Growth in LPG The LPG side of the Gas Trading business continues to strengthen, solidifying its reputation as a versatile and convenient energy choice for homes and businesses across New Zealand. Bottle Swap 9kg cylinder volumes were up by 6.6% to 701,923 swaps and sales from 658,159 a year earlier. Liquigas tolling volumes were up 5.0% to 116,024 tonnes, mainly due to the signing of a new enterprise customer in the second half of the year. Commercial cylinder and bulk LPG supplies were down, driven by a decline in demand during COVID-19 Alert Levels 4 and 3. Gas liquid sales were down 2.2% to 43,338 tonnes.
1. Refer to Non-GAAP reconciliation on page 34.
Group collaboration for customer benefit LPG and natural gas sales and distribution continued during lockdown and experienced unprecedented demand for the time of year as customers sought to stock up on supplies. In a strong display of collaboration, members of the Gas Trading and HRV office-based teams rolled up their sleeves to support the efficient distribution of Gas products to our customers. HRV staff made outbound calls to commercial customers to understand their gas requirements given the lockdown restrictions, LPG was then diverted to meet spiking residential demand. Our Bottle Swap delivery partner, Carr & Haslam, also assisted with the massive task of distributing 9kg orders by providing additional vehicles and drivers to deliver product across the country. The collective determination and outstanding teamwork of our partners and operational teams meant we could deliver product to our customers, while largely maintaining our residential five-day delivery service level.
Gas trading
THE INTERPLAY OF TODAY AND TOMORROW
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