Vector boosted its operating earnings in the June year. Photo / Supplied
Vector boosted its operating earnings in the June year. Photo / Supplied
NZX-listed energy distributor Vector took a $37 million impairment in its latest result to reflect fewer gas connections and “significant market uncertainty” over future gas supply.
The impairment reflected forecasts in the company’s gas asset management plan that showed total connections starting to decline from 2026 as a result ofmarket uncertainty, scarcity of gas and rising costs.
For the June year, Vector’s group adjusted earnings before interest, tax, depreciation and amortisation came to $401.1m, up 16%.
Vector is one of a number of New Zealand businesses who are starting to report problems with the faster than expected run-down of gas reserves.
Earlier this month, the BusinessNZ Energy Council and energy management firm Optima said the industrial gas market was in crisis.
Vector is New Zealand’s largest distributor of electricity and gas, with its networks spanning the Auckland region.
Vector chief exective Simon Mackenzie. Photo / Supplied
Chief executive Simon Mackenzie said the company’s business portfolio had continued to evolve.
“The completion of the sales of Natural Gas Trading, Vector Ongas and our shareholding in Liquigas, are examples of successful transactions that align with the risk and future operating environment of each business,” he said.
The transactions enabled Vector to concentrate on its core strengths and to explore growth opportunities such as through Vector Technology Solutions, or its investment in metering business Bluecurrent.
Vector was awaiting “with great interest” the release of the Frontier report - expected next month - which the Government has commissioned to help with its review of the electricity market.
“Vector has taken an active interest in the process and will continue to provide input into important issues such as security of supply, and an efficient market for customers,“ Mackenzie said.
The “DPP4″ regulatory cycle for electricity distribution networks had seen electricity network assets being repriced by the Commerce Commission to reflect higher interest rates and Covid-19 inflation impacts.
“This has resulted in price increases, which we recognise is hard on all consumers, however in real terms our electricity lines charges remain very similar to what they were more than 10 years ago,“ Mackenzie said.
The Auckland region continued to grow, despite the broader economic slowdown.
“While we’ve seen a softening in the rate of new connections this year, and fewer private electric vehicles being sold, we’re continuing to work closely with customers to ensure we understand, prepare for, and enable their evolving needs,” Mackenzie said.
