Port Otago has changed its dividend policy in relation to its
100% owner, the Otago Regional Council, in part to underpin
future capital expenditure, including funding for its
''inland port'' at Mosgiel.
Port Otago yesterday delivered its three-year draft statement
of corporate intent to the ORC, which also included
notification that no final decision has been made on Port
Otago's dredging programme, other than the increasing
likelihood it will undertake the project using its own
dredge, as opposed to the more capital-intensive option of
using a contractor.
The company is also in negotiations with an unnamed party to
build another multimillion-dollar warehouse at Sawyers Bay,
which would be a second 4000sq m building.
Since 1988, the ORC has received almost $130 million in
dividends from Port Otago.
Port Otago wants to amend the present policy of delivering
70% to 80% of the group's operating surplus after tax towards
the dividend payment, down to 50% to 70%.
It stated an annual intent to deliver $7 million in
dividends, with provision to consider more in a special
dividend, which it has delivered in four of the past six
During the past three years, Port Otago has delivered $36
million in dividends, including special dividends each year
which totalled $15 million.
The proposed dividend change attracted minimal discussion
from ORC councillors, other than several noting the proposed
50% to 70% was similar to general corporate expectations.
Following the meeting, Port Otago chief executive Geoff
Plunket said that for each of the past three years the
dividends had been supplied within the proposed range 50% to
Mr Plunket was asked if reducing the dividend range offered
Port Otago some financial ''breathing space'' to assist its
capital expenditure requirements.
''Yes, definitely. That will enable us to reinvest more, as
and when it is required,'' Mr Plunket said.
He could not reveal more details of the possible expansion of
a second Sawyers Bay warehouse, but if successful, tilt-slab
construction could begin by the end of the year.
Some capital expenditure on the books includes $3 million
being spent on a build and lease development in the Dunedin
Harbour basin and a $2 million to $3 million upgrade of
buildings and paving at its Strathallan St container
On the question of developing an ''inland port'' at Mosgiel,
with rail services to Port Chalmers for general and dairy
cargo, Mr Plunket said a budget had not yet been struck, but
the company hoped the container hub could be operational by
Also in the early stages of design is an extension of the
multi-purpose wharf at Port Chalmers and the Boiler Point