Weighed down by lost events at Forsyth Barr Stadium, weaker log export markets, particularly in China, and the impact of Covid-19, the group showed mixed reports across its companies.
Despite the $3.5 million loss the group contributed $5.9 million to the Dunedin City Council. That payment represented interest on a shareholder’s advance and also through funding Dunedin Railways.
Group chairman Keith Cooper said that debt increased but it had been expected,
"The group’s major trading companies - Aurora Energy, City Forests, Delta and Dunedin Airport (DIAL) - all recorded profits; some ahead and some behind budget. These companies continue to generate positive cash flows and have strong balance sheets, with positive underlying outlooks," he said.
"However, Dunedin Stadium Property Ltd (DSPL) and Dunedin Railways recorded losses, as anticipated. DSPL’s $7 million loss is a significant contributor to the consolidated group loss. Dunedin Venues Management Ltd also recorded a loss due to the ongoing impact of Covid-19 on the company," Mr Cooper said.
"The group as a whole recorded a loss of $3.5 million. This consolidated result is a product of not only companies’ individual profits and losses, but also the accounting eliminations of inter-company transactions - such as between Aurora Energy and Delta.’’
The $5.9 million payment was funded by the dividends DCHL receives from subsidiary and associate companies. In the 2022 financial year, dividends were higher than forecast from City Forests and Delta. No dividend was received from Aurora Energy due to its capital reinvestment programme, nor from DIAL due to the impact of Covid-19.
The group’s overall debt increased over the year, as forecast. This was principally driven by increased capital expenditure at Aurora Energy and the Dunedin City Council. Most other companies’ debt remained relatively static.
Aurora Energy recorded good levels of capital investment and improved financial performance when compared with recent years.
Capital expenditure of $83 million, compared with $76.6 million last year, was directed at new network assets in the Dunedin, Central Otago-Wanaka and Queenstown-Lakes areas during the year. Network operations and maintenance costs increased $600,000 to $20.2 million.
Aurora Energy recorded a net profit after tax of $7.8 million, compared with $700,000 last year and a forecast profit of $1.2 million. The positive result was driven by higher growth-related consumer connections revenue and below budget non-network operating expenditure.
City Forests made a $6.2 million after-tax profit and paid $6.8 million in dividends. This was significantly down on the previous year’s profit of $33.2 million - due to weaker log exports, particularly to China, increased costs of export shipping, increased domestic costs and a much lower forestry revaluation than last year.
Delta recorded a net profit after tax of $2.9 million, well down on last year’s profit of $4.5 million. Operating revenue was up 5% at $108.9 million, underpinned by growth in services to existing and new energy and environmental customers.
The loss recorded by DSPL was $500,000 lower than forecast. DVML was hard hit by Covid-19 and the cancellation of events, such as the All Blacks-Springboks test. Its loss was $900,000.
DIAL’s net profit after tax of $0.5 million was $1.6 million behind the prior year, which was expected because of Covid 19 restrictions.
The company said it was waiting to see what decision the council would come to with regards to Dunedin Railways. Dunedin Railways recorded a $1.6 million loss.
DCHL results
• Aurora Energy $7.7 million profit
• City Forests $6.16 million profit
• Delta $2.9 million profit
• Dunedin Railways Ltd $1.6 million loss
• Dunedin Stadium Property Ltd $7 million loss
• Dunedin Venues Management Ltd $900,000 loss
• Dunedin International Airport Ltd $464,000 profit
Overall: $3.5 million loss
- Staff reporter
