Vector Annual Report 2023

Gas trading

Increase in earnings It remains a challenging environment for the Gas Trading segment, even while there has been a significant increase in earnings during the period, with adjusted EBITDA for the Gas Trading business up 22.8% at $26.9 million from $21.9 million a year earlier. The Saudi Aramco Contract Price of LPG remains elevated, albeit with a softening from the peaks observed in FY22. Other factors continue to increase the cost of doing business, including currency effects, a continuation of supply chain pressures as well as rising domestic and international costs relating to transport and distribution. Volumes Bottle Swap 9kg volumes are down 6.4% to 589,207 bottles from 629,651 a year earlier with most of the decrease due to the loss of a major customer in 2021; however, overall LPG performance improved due to increased revenue. LPG bulk and cylinder sales were also lower, down 5.5% at 41,896 tonnes, and Liquigas LPG tolling volumes were down 5.7% to 106,496 tonnes from 112,913 tonnes the year before. Natural gas sales saw higher margins, with volumes up 0.1 PJ to 5.4 PJ compared to the prior period. As described above, adjusted EBITDA for the Gas Trading business was up 22.8% at $26.9 million from $21.9 million a year earlier. Operational improvements We’re working hard to identify and implement improvements to our processes and have had success with a number of initiatives. The inclusion, since the previous financial year, of class 1 delivery trucks has led to delivery runs being consistently better resourced, and we’re continuing to optimise route planning for more efficient schedules and dependable customer deliveries. We’re also retaining an ongoing focus on recruitment within a labour market which remains tight (see People and Health and Safety p21).

UNDERSTANDING THE NETWORK IMPACT OF FREIGHT EVS When we think about electric vehicles and their role in reducing carbon emissions, passenger vehicles usually spring to mind. But commercial freight EVs will play an increasing role in decarbonisation, and Vector is at the forefront of analysing how transitioning from a diesel fleet to an EV fleet can best be managed. To better understand this we’ve completed a trial of using an electric truck, the Fuso New Zealand eCanter, within our fleet of Vector OnGas LPG cylinder delivery vehicles. The Vector OnGas team has driven more than 6,300 km in this eCanter, providing a valuable contribution to our research into how to support transport electrification, so that the charging infrastructure and the national grid are able to support the increasing demand for electricity.

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