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The Dunedin City Council-owned electricity companies again provided some spark to the financial statements for the six months ended December 31.
In an otherwise ordinary year for the council-owned companies, Aurora Energy and Delta Utility Services stood out.
Dunedin City Holdings chairman Paul Hudson had no hesitation naming Delta as the star performer, in his opinion.
The company had the highest number of employees and those employees were proving to be flexible and prepared to move to where the jobs were, he said.
Delta, in a shrinking market, had increased its profit after tax in comparison with last year and achieved an annualised return on shareholders' funds in excess of 16%.
At a media briefing yesterday, Mr Hudson released the combined results from the council-owned companies.
"While trading over the last six months has been quite difficult, the Dunedin City Holdings group has achieved another steady half-year result."Sales had increased marginally to $111 million and cash generated from operations had also improved slightly.
The after-tax profit had fallen to $4.9 million in the period from $5.2 million in the previous corresponding period.
Part of the reduction in profit was the small increase in tax payable but overall, the result simply reflected the slow economy both in New Zealand and overseas.
"We are pleased to see that the group, even through a period of slow or no growth, continues to generate surpluses and that the diversity in the commercial operations of the group continues to provide strength."In the past year, several businesses associated with timber, tourism and property development in the region closed down.
To date, the group remained well in surplus and continued to generate a positive cash flow that fully met its current capital investment needs.
However, a review of the individual companies showed that only Aurora, with a profit before tax of $11.4 million, and Delta with a profit before tax of $2.3 million were in the black.
Aurora paid an interim dividend of $5 million and Delta paid an interim dividend of $1.5 million.
Citibus reported a loss of $372,000, about the same as last year; Taieri Gorge Railway had a loss of $348,000, slightly improved on the $458,000 loss in the previous corresponding period; and City Forests had a loss of $734,000 compared with a profit of $153,000 in the previous period.
Associate company Dunedin International Airport had earlier reported a profit before tax of $161,949, much improved on the $27,415 reported in the previous period.
Asked how long City Holdings could go on propping up loss-making companies, Mr Hudson said Citibus was expected to move into profit in the second half.
A lost tour contract had affected the company's first half performance as coaches were organised for the tours which subsequently did not happen.
There had also been a "significant drop off" in the number of urban bus passengers on the same time last year.
That could have been parents struggling to pay bills after Christmas and deciding not to do so many outings with their children, he said.
The outlook for the next six months for City Forests was for a significant improvement in performance driven initially by emission trading revenue and by improved returns from the export log business and the Milburn processing plant.
City Forests entered into a contract for the sale of carbon credits on December 23 for about $3 million.
Settlement of that would be included in the second-half.
"The New Zealand forestry industry as a whole has yet to emerge from a very difficult period.
World markets for logs and timber have been very soft."The tourism market had experienced good times and bad, Mr Hudson said.
Incoming tourist numbers had been maintained by an increase of Australian visitor numbers and that was particularly evident in Queenstown through the ski season.
City Holdings was investigating ways of tapping into the growth of the ski season market, he said.
"The current economic environment appears to be improving but vigour is lacking.
We are fortunate that our investments are spread over a wide range of activity and some key business sectors remain steady.
"The City Holdings board believes with this underlying strength, the group will trade profitably for the second half of the year."