The company's profit was down to $8.6 million from $22.6 million last year, though less than half of that was related to a "like for like" change in operating performance, Dunedin City Holdings Ltd (DCHL) chairman Paul Hudson said yesterday.
The returns meant DCHL was able to contribute $20.7 million in dividends and cash payments to the Dunedin City Council, an amount that matched set targets.
Mr Hudson indicated yesterday the future might make the going tough for some, but he was satisfied with the performance of the companies.
"Directors have been satisfied with the underlying profit results, especially given the poor economic environment in which City Forests Ltd and Citibus Ltd, in particular, have operated," he said.
Of the council's six companies, only Citibus made a loss, of $700,000.
Mr Hudson said growth in the regional economy had a favourable effect on the growth of electricity network company Aurora Energy, which regularly provides the bulk of returns for DCHL.
But Aurora was expected to suffer in the future from a slow-down in property development.
"We're probably not going to get the capital contributions from Aurora we've seen in the last few years."
The Taieri Gorge Railway was another that could expect difficulties in the future.
While 65 cruise ship visits were expected for the 2008-09 season, "considerably less" were expected in future, although the company had invested in its future by buying 11 carriages.
Exchange rates, rising oil costs and interest rates had been negative influences.
The export economy had not been good for City Forests, which had constrained its log production, though that had changed in the past few weeks, and the company had all of its logging gangs working to fill orders.
City Forests had also helped the group to be carbon-positive by 376,400 tonnes per annum.
Mr Hudson said support given by DCHL to investment in Dunedin International Airport had proved successful, with a recent valuation contributing to a major improvement in the value of shares.
Mr Hudson said in the annual report cash flow generation had slowed after substantial growth in the past few years.
"Cash generated from operations of $25.6 million has not kept pace with the $31.7 million capital investment programme, plus the distribution to council.
"However, directors are confident that cash flow growth will return, and have been determined not to undermine longer term strategies through precipitous cutbacks."
The reduced profit was due in part to a change in the way cash was paid to the council, where more was being paid by way of interest, which was an expense to DCHL, rather than by dividends, he said.
The change in the corporate tax rate from 33% to 30% had also affected last year's result.
Opening the books
Citibus
Operates coach tour and charter services throughout the South Island, sightseeing, school bus and commuter services within Dunedin, and sightseeing services between Dunedin and the tourist centres of Queenstown, Wanaka and Mt Cook.
Highlights 2008 2007
Revenue $6.8m $6.9m
Profit (loss) ($700,000) ($700,000)
Aurora Energy
Owns the electricity network assets of poles, lines, cables and substations within the immediate Dunedin area and in Central Otago.
Highlights 2008 2007
Revenue $76.6m $71.2m
Profit (loss) $15.2m $21.7m
City Forests
Actively harvests and markets the products from the 16,100ha of forests it owns. Products are sold in both the export and domestic markets.
Highlights 2008 2007
Revenue $30.3m $33.4m
Profit (loss) $1.4m $4.8m
Delta Utility Services
A multi-utility service contractor providing a range of civil construction, environmental services, field services and electrical contracting to local authority, private sector and public clients.
Highlights 2008 2007
Revenue $86.2m $73.3m
Profit (loss) $1.9m $3.5m
Dunedin City Treasury
Provides the group with funding and financial services.
Highlights 2008 2007
Revenue $20.5m $16.7m
Profit (loss) $15,000 $16,000
Taieri Gorge Railway
Operates a daily tourist train on the Taieri River Gorge railway line and "The Seasider" service on the Karitane coast line.
Highlights 2008 2007
Revenue $4.3m $4m
Profit (loss) $50,000 $60,000
