VECTOR ANNUAL REPORT 2021 /
Chair & Group Chief Executive Report
$ 194.6 M GROUP NET PROFIT AFTER TAX, $97.3 MILLION HIGHER THAN THE PRIOR YEAR’S RESULT Developing new revenue opportunities We have further developed our strategy to leverage the infrastructure and technology we use in our existing businesses in order to create commercial opportunities, such as providing has been established to take to market solutions developed as part of our digital transformation journey. This has led to investment efficiencies through our choice to partner with others to develop these solutions, which Vector as a customer benefits from, and which avoid the need for us to seek alternative solutions from third party vendors. We are exploring global opportunities for key priority solutions including the New Energy Platform created through our strategic alliance with Amazon Web Services (AWS), Distributed Energy Resource Management Systems (DERMS), cyber security, and others. As an example, VTS is now providing cyber security services to another New Zealand electricity distribution business, leveraging Vector’s 24/7 security operations centre. Vector Property Services has been established to explore the commercial potential of our property and facilities assets, in the context of the opportunities to partner with third parties to better utilise some of our passive land, building and tunnel assets, such as co-location of other infrastructure, and broader development in line with our Symphony strategy. solutions to third parties. Vector Technology Services
Vector Property Services is a new unit established to look at opportunities within our property portfolio. Ongoing impacts from Covid-19 As an essential services provider, in the past twelve months we have maintained our focus on ensuring the safety of our people and communities in the face of Covid-19, and ensuring our ability to continue providing our essential products and services. We have seen significant workforce and supply chain challenges across several of our businesses, including metering, and the procurement of common equipment such as cabling for our electricity distribution business. Through careful planning and strong management we have been successful in mitigating disruption to our work programmes. We have also had success in managing the impacts of fluctuations in commodity prices. We see these challenges as likely to persist over the short term and are working to mitigate their impact and reduce our exposure. We continually evolve our internal policies and the ways we support our staff to work safely, and their wellbeing, under changing Covid-19 restrictions. We are executing a comprehensive plan to support the Covid-19 vaccine rollouts across New Zealand and Australia with information, access to medical experts to answer individual questions, and other practical support for our people (page 14). Electricity network quality performance We are pleased to report that in the last regulatory year to 31 March 2021, we have seen improving network quality performance within our regulatory System Average Interruption Duration Index (SAIDI) limit. This follows a sustained focus on improving network performance for our customers over previous years. We acknowledge the efforts of our own people and our Field Service Providers in this outcome and we remain committed to continuing this focus.
Enabling growth in Auckland We continue to invest in the integrity and reinforcement of the electricity network supporting Auckland’s growth, using a mix of traditional and non- wired solutions. Our aim is to keep pace with growth while also ensuring the investments we make are efficient, so that future costs are affordable for our customers, and the network is ready for the demands placed on it from electrification. In determining our capital investment approach for the network, we must navigate the complexities of a growing city and multiple other infrastructure and investment pipelines, including major projects such as light rail or large housing developments, which require significant planning and investment from us.
LOOKING FORWARD
At the centre of the energy transition
Electrification of the economy is at the heart of New Zealand’s decarbonisation efforts. The electrification of transport will be part of this, as will distributed energy resources such as solar and batteries, new customer technology solutions such as Vehicle-to-Home charging, and new business models such as peer to peer trading, enabling customers to trade their excess energy.
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