Business Unit Reports Technology
TECHNOLOGY
The Technology business unit revenue rose 27.9% to $273.6 million from $214.0 million a year earlier, driven largely by increased deployment of smart meters and the acquisition of E-Co Products Group (trading as HRV) and PowerSmart from 31 March 2017. Adjusted EBITDA for the Technology division rose 6.5% to $130.5 million, with gains from the smart meter roll-out diluted by a disappointing result from E-Co’s heat pump division.
This year we installed 84,878 advanced meters in New Zealand and approximately 40,000 advanced meters in Australia. Our smart meter base grew 9.8% to 1.41 million 1 from 1.28 million the year before. Vector has now largely completed our mass smart meter roll-out in New Zealand, and we are now targeting a reduced deployment of around 70,000 meters over the next 12 months by managing the existing electricity meter fleet and installing new and replacement meters as required. Australia remains our next area of growth for the metering business. The Power of Choice reforms took effect from 1 December 2017. This means metering has become competitive across New South Wales, Queensland, and South Australia. Vector has contracts with most major Australian electricity retailers and is currently deploying more than 7,000 meters a month. Vector’s electricity business restructured its arrangements with Vector Communications over the fibre used to provide SCADA connectivity across its network. As a result, Vector Communications’ revenue (and Regulated Networks operating expenditure) has decreased by $5.4 million relative to the prior year. Excluding this change, Vector Communications has delivered a steady result in what is a highly competitive market. As mentioned in the 2018 half year result, we have been disappointed by the performance of E-Co’s heat pump division. The E-Co result was also impacted by the closure of the retrofit window business and a significant investment in developing the HRV solar business. E-Co’s core ventilation products have continued to perform strongly and we remain confident that the business will remain a market leader for healthy and energy efficient home solutions. n
Adjusted EBITDA for the Technology division rose to $130.5 million from $122.5 million.”
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—— 1 Including 135,284 meters which are managed, but not owned, by Vector.
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