BUSINESS UNITS: Technology
TECHNOLOGY
Technology division revenue rose 18.8% to $214.0 million from $180.1 million a year earlier, driven largely by increased deployment of smart meters in New Zealand and Australia and the acquisition of E-Co Products Group and PowerSmart from 31 March 2017. Technology adjusted EBITDA rose 7.9% to $122.5 million from $113.5 million, with gains from the smart meter roll- out and acquisitions diluted by continued business development expenditure associated with establishing the new energy solutions and Australian metering operations.
This year we installed almost 145,000 advanced meters in New Zealand and over 24,200 advanced meters in Australia. Our smart meter base grew 13.7% to 1.28 million (including 102,808 meters which are managed, but not owned, by Vector) from 1.13 million the year before. Vector is now reaching the end of its smart meter roll-out in New Zealand, and we are targeting a reduced deployment of around 80,000 to 100,000 meters over the next 12 months. After that, the focus in New Zealand will shift to managing the existing electricity meter fleet and installing new and replacement meters as required. We are targeting Australia to deliver the next phase of growth for the metering business. The Power of Choice reforms take effect from 1 December 2017, at which point metering will become competitive across New South Wales, Queensland and South Australia. Vector is currently involved in competitive procurement processes with major Australian retailers with a view to securing contracts for deployment from 1 December 2017. Meanwhile, Vector Communications has delivered an improved result. The company continues to provide high-end telecommunications solutions to customers. Our Technology division also includes Vector’s nascent new energy solutions business. The business development expenditure we have committed in this area over the past two years is now starting to bear fruit, as evidenced by Vector winning a multimillion-dollar contract to supply the Northern Territory with a 5MW grid-tied battery storage solution. Vector will be responsible for the design, engineering, construction, and installation of the system and once commissioned, we will also be responsible for ongoing maintenance. Another example is our pioneering work with Dominion Salt where we integrated a Tesla Powerpack with their 660kW wind turbine at Lake Grassmere to deliver around 75% of the site’s energy needs. Our new energy solutions business was strengthened this year by the acquisition of E-Co Products Group and PowerSmart. Together these businesses contributed $0.9 million in EBITDA for the period 1 April to 30 June 2017.
Nikhil Ravishankar BSc BComm (Hons) CHIEF DIGITAL OFFICER
Unleash
Emerging technologies, multi-directional power flows, heterogeneous generation and storage, robotics and artificial intelligence will change the dynamics of energy dramatically.
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