Another strong performance from Eastland Group in 2015

Another strong performance from Eastland Group in 2015

Eastland Group achieved another strong commercial performance in the financial year ending 31 March 2015, delivering overall net profit after tax of $14.1 million.

Total income for the year was $73.9 million compared with $71.0 million the previous year.

The Group’s three operating sectors all performed well with EBITDA* contributions of $14.9 million for the electricity distribution sector, $7.4m for the electricity generation sector, and $18.2 million for the logistics/port sector.

The Gisborne-based company paid its shareholder, the Eastland Community Trust, a dividend of $5.0 million, up from $4.8 million in 2014. Interest paid on shareholder capital notes was $2.6 million, meaning the total dividend and interest paid to the shareholder was $7.6 million, compared to $7.4 million the previous year.

Group chief executive, Matt Todd, said the 2015 year was a challenging one, especially for the company’s logistics businesses.

“Log prices were depressed as a result of a supply and demand imbalance in China and the lower prices meant forestry companies harvested less throughout the year. The overall impact was a reduction in the volume of logs going through Eastland Port.”

Final log volumes for the year were 2.22 million, compared to 2.27 million the previous year.

“We recognised in advance that log volumes would be lower than budgeted and by implementing a companywide programme to reduce expenses we were able to mitigate the full impact of reduced revenues.”

Mr Todd said Eastland Group's aim was to invest in infrastructure assets to support the company’s long-term strategy.

“Our goal is to improve long-term profitability, encourage the growth aspirations of our customers, and boost prosperity in the region. We invested $35.2 million during the year on development of assets, up from $22.4 million in 2014 and $14.9 million in 2013. Of this, 97.2 percent – or $34.2 million – was spent on new assets for the Tairawhiti region.”

Eastland Port’s $11 million upper log yard expansion project, currently under construction, is due for completion in September, and includes installation of a world class storm water treatment system. It will take total log storage area on port to 12.2 hectares.

“Our continued investment at the port is geared to meet predicted future demand from forestry customers, at the same time as we strive to improve operating efficiency and safety,” said Mr Todd.

The transfer of Transpower’s Gisborne and Wairoa 110kV transmission assets to Eastland Network, on 31 March 2015, was a significant step towards Eastland Group’s growth aspirations, adding around $12.5 million to its existing asset base.

During the 2015 financial year, Eastland Group’s Te Ahi O Maui geothermal generation project – a partnership with the Kawerau A8D Ahu Whenua Trust – also made excellent progress.

“With all appeals resolved, resource consents are fully in place to allow for the construction and operation of a sustainable geothermal power plant on a site 2.3 kilometres north-east of the Kawerau township.”

The company has plans to spend over $220 million on infrastructure projects over the next five years.

At 31 March 2015, Eastland Group’s total assets were valued at $385.7 million, with about 87 percent of this currently invested in the Gisborne and Wairoa districts.

ENDS

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