- On 23 October, Vector last traded at $4.39 in the NZ share market, up by 0.92% from its last close.
- Vector witnessed substantial increase in network connection numbers across its electricity and gas networks. Electricity network consumers rose by 1.7% to 582,990, while gas network connections, were up 2% at the end of Q1 ended 30 September 2020.
- Vector briefly stopped scheduled outages around the electricity and gas networks acknowledging the need for its services to reduce customer disruption at the time of the first lockdown.
- Vector announced a strategic alliance with Amazon Web Services in July to jointly develop the New Energy Platform to change how energy is managed, delivered, and consumed.
Vector Limited (NZX:VCT) is a prominent network infrastructure company in NZ that operates a portfolio of businesses providing energy and communication services to more than 1 million homes and commercial customers across the country.
Vector's share price was at $4.39 by the end of the trading session, up by 0.92% from its last close, as on 23 October.
Operational Performance in Q1
Vector's business operations continued to be impacted by COVID-19 during the September quarter with NZ at Alert level 2 and Auckland at Alert level 3 for most of the quarter.
Growth in Auckland has persisted in Q1, which led to robust network connection numbers across the electricity and gas networks of the Company.
Some of the highlights of VCT's operational performance for Q1 ended in September 2020 included of the following:
- Total electricity connection numbers grew by 1.7% to 582,990 in Q1 compared to the same month last year.
- Electricity distributed volume for the quarter decreased by 0.6% to 2,348 GWh on the prior quarter, led by lowered activity from the industrial and commercial sectors due to COVID-19.
- Gas network connections rose 2% to 114,584 in Q1 compared to September 2019 due to continued growth in Auckland.
- Electricity connection numbers increased by 9.2% than the comparable period, with a total fleet of 1,746,990 showing persistent performance in a competitive market in Australia and NZ.
- BottleSwap has witnessed a 7% increase in the number of 9kg bottles swapped in the quarter compared to the same month in 2019
Natural gas, gas liquids and Liquigas LPG tolling declined by 34.9%, 1.2% and 2.2%, respectively in the quarter compared to pcp, with the decline in natural gas volumes driven mainly by the loss of a large customer base in January 2020.
For 6 months ended 30 September 2020, SAIDI minutes was 25.8% lower than the comparable period, which is due to fewer adverse weather incidents, network investments to strengthen stability and continuing initiatives to lower the impact on customers.
Response to COVID-19
Throughout the COVID-19 lockdown phases in the reported period, Vector continued to provide vital services.
Vector briefly stopped scheduled outages throughout the electricity and gas networks recognising the need for its services to reduce customer disruption at the time of the first lockdown. The Company proceeded with work only if it was critical for protection, repair, or to help other vital services to function.
During July, Vector also welcomed the NZ government's move to push closer towards a 100% renewable electricity system by surveying hydro projects that pump and store water to improve management of the risks arising from the dry year and the intermittent renewable generation.
Along with other gas and power network suppliers, the firm launched a work programme in April to provide 3-month payment deferral schemes to business customers. VCT, Firstgas, along with Powerco offer the gas distribution networks that unite ninety six percent of NZ’s natural gas consumers.
The 3 companies were conscious that the restrictions posed by the COVID-19 Alert Levels 3 and 4 put a financial stress on many business customers and subsequently, proposed payment deferrals of at least 3 months to gas retailers.
Partnership with Amazon Web in July
On 28 July, Amazon Web Services (AWS) declared a multi-year strategic alliance with Vector to develop the New Energy Platform (NEP) jointly.
The NEP's initial emphasis is to quickly capture and interpret data from more than 1.6 million IoT-connected Vector advanced metres that safely capture energy usage and network output information across Australia and NZ.
The comprehensions obtained by the NEP would help Vector to enable energy and utility entities to create a customised product, and pricing solutions for their consumers focused on their energy usage patterns. The insights will also help these companies to create innovative solutions and new market models that hasten the uptake of renewables and electric vehicles.
Vector is targeting adjusted EBITDA in the range of $480 million to $500 million for FY21.
Vector Group Chief Executive Simon Mackenzie stated that partnerships like AWS are crucial for the future of new energy, and the focus of FY21 will be on creating solutions that can provide consumers with more alternatives.
He also added that the Group would continue to pursue strategic alliances that allow it to develop its Symphony plan, aid decarbonisation and vehicle electrification.
He noted that though Vector is concerned by regulatory conditions and their impact on the ability of the Company to invest, it has confidence in its strategy to undertake smart investment with a focus on customers.
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