Vector Annual Report 2020

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4. Segment information Segments

Vector report on three reportable segments in accordance with NZ IFRS 8 Operating Segments . These segments are reported internally to the group chief executive. This reporting is used to assess performance and make decisions about the allocation of resources. A review of the reportable segments in the current year resulted in the following changes from the 30 June 2019 reporting period: — The Technology segment, which included the metering services, telecommunications and new energy solutions businesses is no longer a reportable segment; — The Metering services business is disaggregated from the Technology segment to form a new and single reportable segment, Metering; — The telecommunications and new energy solutions businesses have been removed from segment reporting. These businesses do not satisfy the criteria to report as reportable segments. The key change was the presentation of the Metering services business as an individual reportable segment as a result of growth in metering services revenue in recent years. The current reportable segments, including their key business activities at 30 June 2020 are therefore: Regulated Networks Auckland electricity and gas distribution services. Gas Trading Natural gas and LPG sales, storage, and transportation. Metering Metering services. The processing and cogeneration businesses in Gas Trading ceased at completion of the sale of Vector’s Kapuni gas interests. Refer to note 5. Prior periods segment information has been restated to reflect the changes in the segments. Segment information is prepared and reported in accordance with Vector’s accounting policies. Intersegment transactions included in the revenues and operating expenses for each segment are on an arm’s length basis.

Segment prof it

The measures of segment prof it reported to the group chief executive are earnings before interest and tax and earnings before interest, tax, depreciation, amortisation and impairments (EBITDA).

Activities not reported in segments

Other activities engaged by the group comprise shared services and other business activities. Revenues generated by these activities are incidental to Vector’s operations and/or do not meet the def inition of an operating segment under NZ IFRS 8. The results for these activities are reported in the reconciliations of segment information to the group’s f inancial statements. Interest costs (net), fair value change on f inancial instruments and associates (share of net prof it/ (loss)) are not allocated to the segments.

Geographical information

The group derives a majority of the revenue from external customers in New Zealand.

Major customers

Vector engage with three major customers, each of which contribute greater than ten percent of the group’s revenue. These customers are large energy retailers. For the year ended 30 June 2020, the customers contributed $216.5 million (2019: $220.4 million), $159.1 million (2019: $172.3 million) and $158.5 million (2019: $164.6 million) respectively, which is reported across all segments.

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