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Hard-hit by Covid-19 disruption, the Dunedin City Holdings Ltd Group has emerged from a difficult financial year with a net loss of $5.3 million - far better than a forecast $14.6 million loss.
DCHL chairman Keith Cooper said the 2019-20 financial year until June 30 had been challenging for the DCHL group.
"The group result reflects the lower than forecast loss at Aurora Energy and the unexpected hibernation of Dunedin Railways Ltd, with those losses offset by surpluses at City Forests and Delta, and by continued reduction in cost of funds across the group," he said.
Covid-19 severely affected the group’s tourism and travel-related businesses in the final quarter, particularly Dunedin International Airport Ltd, Dunedin Venues Management Ltd (DVML) and Dunedin Railways.
No dividend was distributed for the year as forecast in the group's statement of intent.
Group term borrowings totalled $790 million (excluding shareholders advance).
This included $244 million DCC debt, $86 million stadium debt, and operating company borrowings of $380 million.
Group debt compared favourably with the book value of DCHL’s assets, which now sat at $1.46 billion, up from $1.35 billion in the previous financial year.
Capital expenditure of $53.6 million was invested in new and replaced network assets across the Dunedin, Central Otago and Queenstown Lakes areas during the year.
City Forests had a satisfactory year, delivering an after-tax profit of $12.7 million. City Forests made a strong financial contribution to the DCHL group through $4.5 million in dividends.
Managing workflow challenges in the first half of the financial year and global disruption with the outbreak of Covid-19 proved difficult for Delta, affecting its ability to meet some targets.
Delta recorded a net profit before tax of $2.2 million in the financial year,up from $1.7 million the previous year but significantly below budget for the year of $3.7 million.
DVML had been enjoying a successful year until the outbreak of Covid-19, with a strong concert line-up, including Fleetwood Mac, Elton John and SIX60.
Dunedin City benefited by $41.5 million in economic impact from major concerts alone.
The pandemic’s impact on DVML was instant. Income halted overnight resulting in a disappointing final financial quarter.
Dunedin Railways (DR) was unable to weather the forecast impacts of Covid-19 on the tourism sector. In April DCC agreed that DR be put into hibernation as an alternative to closure.
An Audit New Zealand qualification related to the write-down of assets at DR.
On balance, the railways board considered it appropriate to write down the company's fixed assets to $297,000. An associated impairment expense of $4,486,000 had been recorded in Dunedin Railways statements.