However, Dunedin City Holdings Ltd (DCHL) chairman Tim Loan said a dividend from the council-controlled company would not come this financial year.
Councillors reviewed DCHL interim reports for the six months to December and draft statements of intent at yesterday’s finance and performance committee meeting.
Following questions from Cr Russell Lund, Cr Andrew Simms asked if Aurora could feasibly pay a $5million dividend this year without impacting operations.
Mr Loan said while a dividend was feasible, it had been agreed with Aurora’s board none would be paid until the company left its customised price-quality path, which ‘‘happens very shortly’’.
The five-year path was put in place by the Commerce Commission in March 2021 to allow the company to recover a set amount of revenue from customers over five years as it improved its network.
‘‘In the next financial year, we are intending and planning to have dividends resume from Aurora Energy,’’ Mr Loan said.
The council signalled a 10.5% rates rise last month, based on draft annual budgets.
‘‘If we roll out ... a double-digit rate rise, that's an existential threat to this mayoralty and this council,’’ Cr Simms said.
He asked if there was any statutory reason Aurora could not pay a dividend. Mr Loan said there was not.
‘‘We agree that there potentially is some room for movement around the dividends from Aurora, and we have not settled on the key parameters for that at this point in time.’’
They would be discussed in council workshops next month, he said.
A report to councillors said no dividends from Aurora were planned this financial year, as the company continued to ‘‘reinvest cash generated into the network’’.
‘‘Although Aurora is showing positive free cash flows year to date, higher forecast cap-ex in the second half of the year is expected to reverse this.’’
Cr Doug Hall asked if a ‘‘healthy conversation’’ would be had on balancing Aurora’s profit and equipment investment — Mr Loan said that would form part of next month’s workshops.
The Commerce Commission was ‘‘all over Aurora’’, Cr Lund said.
‘‘There’s no way we are going to be able to scrimp ... we are the most closely scrutinised lines company in New Zealand.’’
Councillors accepted the reports.
