Dunedin City Holdings Ltd: Half Year Result to 31 December

PRESS RELEASE: 12 MARCH 2019

Dunedin City Holdings Ltd: Half Year Result to 31 December 2018

The Dunedin City Holdings Ltd Group has reported a pre-tax profit of $2.882 million for the six months to December 2018.

Dunedin City Holdings Chair Keith Cooper says the Group is pleased to show a positive financial result once again. “Our half year result is in line with our budget projections. Our strong operating cash flow will continue to provide a stable basis for the Group.”

The group’s financial result is driven by a continued strong performance by City Forests Ltd, and supported by a continued reduction in the cost of funds across the Group. Most other companies are performing in line with budget projections, with the exception of Delta Utility Services Ltd, where seasonal conditions have increased costs along with timing of undertaking contract works which is forecast to correct in the second half of this financial year.

Mr Cooper says the outlook for the Dunedin City Holdings Ltd Group remains stable. “We do not anticipate significant changes in markets, or updates to the projections set out in the Statements of Intent. We look forward to reporting our full year results in another six months.”

Aurora Energy Ltd recorded a net profit after tax of $1.4m for the six month period (2017: $3.2m).

Aurora’s operating revenues were slightly lower, and network operating expenses slightly higher than the same period last year. The company’s focus on capital renewals has continued with capital expenditure at $32m for the six month period.

City Forests Ltd recorded a pleasing six monthly profit before tax of $7.3m for the period, $1.6m ahead of budget, primarily driven by above budget returns from log sales in strong domestic and international markets. City Forests paid a dividend of $2m to Dunedin City Holdings Ltd in December 2018.

Delta Utility Services Ltd continued to deliver on its existing long term contracts and managed to secure new work activity with new and current customers. Total operating revenues of $47.5m were $3.6m higher than the same period last year. The company recorded a net profit before tax of $0.5m ($1.8m prior year) over the six month period. Delta paid a $0.75m dividend to Dunedin City Holdings Ltd in December 2018. Directors expect a satisfactory result at year end.

Dunedin City Treasury Ltd achieved a reduction in the average cost of funds from 4.70% to 4.03% over the period, which it was able to pass on to the group. The AA/A-1+ ratings for both Dunedin City Treasury Ltd and Dunedin City Council were reaffirmed by Standard & Poor’s in December 2018.

Dunedin Railways Ltd reported a before tax loss of $0.6m ($0.9m loss in the prior year). Dunedin Railways Ltd has a strong seasonal element, with the region’s higher tourist season from October until April, which typically creates a deficit for the first half of the year.

Dunedin Stadium Property Ltd recorded an operating loss, as expected. At $4.56m the loss was smaller than that recorded over the same period in 2017 ($4.88m). The improved result was primarily due to reduced interest costs.

Dunedin Venues Management Ltd recorded an operating profit before tax of $0.05m ($0.4m prior year). Several major events were held at Forsyth Barr Stadium during the period, including P!nk and Shania Twain concerts; however, the decrease in surplus on last year’s result reflects one-off revenue being generated in the prior year, including hosting a Bledisloe Cup Test Match.

Dunedin International Airport Ltd recorded an operating surplus before tax of $2.8m (2017: $3m). Aeronautical and non-aeronautical revenue streams both increased, by 3.4% and 2.3% respectively, although so too did operating expenditure, primarily caused by a significant increase in staff headcount against the corresponding period in the prior year.

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