Chief Financial Officer report
JASON HOLLINGWORTH CHIEF FINANCIAL OFFICER
Chief Financial Officer report
Segment adjusted EBITDA 1 Adjusted EBITDA for Regulated Networks, for the year to 30 June 2023, was up $15.8 million (4.4%) to $371.6 million against the prior period. The increase in adjusted EBITDA was largely driven by higher electricity and gas revenue with the rise in electricity revenue due to an increase in net connections and higher pass-through and recoverable costs. Gas revenue has increased due to higher prices and higher volumes. The impact on Regulated Networks earnings from Cyclone Gabrielle and the Auckland floods was approximately $7.4 million, with additional capital expenditure of $9.2 million also incurred. This reflects the widespread and significant damage caused across the network, the challenges of repair and restoration after such devastating impact, and the extent of our response. A Vector’s financial performance for the year reflects a solid result with adjusted earnings before interest, tax depreciation and amortisation (adjusted EBITDA) of $523.3 million. This was up $13.3 million or 2.6% on last year’s result, and is made up of $335.1 million from continuing operations and $188.2 million from discontinued operations (being the metering operations). This is a pleasing result considering there is a lag in our ability to recover actual CPI increases over FY23, even while at the same time many underlying costs increase because of high inflation levels under the regulatory pricing model.
substantial challenge for us is the non-availability of insurance for our assets against these risks. We have engaged with the Commerce Commission about a catastrophic event reopener, which could allow us to recover both the operating and capital expenditure costs associated with these events in future pricing. Adjusted EBITDA for the Gas Trading business was up 22.8% at $26.9 million from $21.9 million a year earlier. The result was mainly due to improved performance from the Natural Gas business, which has benefitted from higher margins. LPG performance has improved also, driven by higher revenue partially offset by increased costs of sales due to the cost of LPG product, which remains high as this is linked to the Saudi Aramco price of LPG and higher transportation costs. The Metering business has had a positive year, with adjusted EBITDA at $188.2 million, up $14.5 million or 8.3% from a year earlier, with gains coming from the continued roll-out of advanced meters, particularly in Australia.
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Vector Annual Report 2023
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