Chairman’s STATEMENT
energy technology to not only improve the network, but also to reduce Auckland’s carbon footprint and ensure the region can grow sustainably. Swimming against the status quo tide is never easy, but it was and remains the right thing to do. Shareholders will receive a fully imputed final dividend of 8.0 cents, taking the full year dividend to 16.25 cents per share, up from 16.0 cents per share in 2017. Despite delivering 12 consecutive years of dividend growth, as signalled last year, Vector is a business operating in a challenging environment and responding to change therefore does come at a cost. Adjusted EBITDA of $470.1 million – slightly below last year’s result – underscores the need for Vector to continue to strategically diversify to ensure long-term profitability. Our ability to pay ongoing increasing dividends could also be significantly impacted by the reset of our electricity network revenues in 2020, which is largely a function of interest rates prevailing at the time, and expenditure allowances set by the Commerce Commission. Looking ahead, to the next decade and beyond, Vector will need to continue our transformation. Change within the sector and wider environment will continue unabated and while the business has increasingly taken a customer-focused path, there is much work still to do to be considered a market leader in this regard. It is certain that the industry will continue to be disrupted and Vector will need to not only stay ahead of the curve, but also to balance the needs of customers today with those of the next generation. From where I sit, it is clear that electrification of the economy will continue to accelerate, driven by the downward cost curves in technology, the convergence of transport and energy, and the need to respond to the imperative of climate change. There are significant risks and opportunities for Vector’s businesses as a consequence. In May I announced I would not be seeking re-election, and will be standing down at this year’s annual shareholders meeting. I leave Vector knowing that it is in the best possible position to mitigate the risks and capitalise on the opportunities that lie ahead. Earlier this year, Vector welcomed David Bartholomew and Sibylle Krieger to the Board, both of whom have significant industry and Australian experience. I am confident that as my tenure comes to an end, Vector has the necessary governance expertise in place to continue to successfully navigate energy sector disruption and the change that will always be a constant. It has been a pleasure to serve Vector’s shareholders and the people of Auckland. I will view Vector Lights on Auckland Harbour Bridge as a constant reminder of what the new energy future is capable of achieving.
Michael Stiassny Chairman
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Vector://AR 18
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