Debt drops by $25m

The Dunedin City Council's group debt has dropped by more than $25 million on the back of stronger results by its companies, new figures show.

The companies' six month results to December 31, released on Friday, showed an improving picture, with group revenue up 9% to $128.3 million, while after tax profit jumped 17% to $10.1 million.

At the same time, debt levels across the council and its companies dropped by $25.8 million, to $586.5 million, the companies' reports showed.

Dunedin City Holdings Ltd (DCHL) chairman Graham Crombie said he was ''very pleased'' with the results, and the trend was expected to continue.

The reduced debt level was expected to hold steady for the rest of the financial year, in part because Aurora Energy Ltd's planned network reinvestment _ some of which would be debt funded _ would cancel out further repayments in other areas.

However, the longer term trend was expected to be a continued decline in debt levels across the group, he said.

''Cashflow within the group is strong, the profit is higher and debt has reduced. This is a good outcome for shareholders, the ratepayers of Dunedin,'' Mr Crombie said.

The results came as the council continued to focus on ways of reducing its debt mountain, which peaked at more than $600 million last year.

Core council debt was now also dropping towards a goal of $200 million by 2021 22, although long term plan budget decisions yet to be confirmed could push that out by a year.

Mr Crombie said the $25.8 million debt reduction in the first six months of the financial year was significant, after ''going over the peak'' last year.

He was also pleased by the performance of the companies across the board, saying results were ''tracking where we'd hoped to track''.

Aurora Energy Ltd reported a net profit of $7.301 million, up from the $5.791 million the previous year.

Delta Utility Services Ltd's net profit was $2.295 million, down slightly from $2.765 million the previous year, although revenue was continuing to grow.

City Forests' net profit has also reduced, to $3.724 million compared with $5.037 million the previous year, which was blamed on a fall in log prices, offset in part by the recent drop in the New Zealand dollar.

Taieri Gorge Railway Ltd recorded a small loss, of $236,000 compared with $498,000 in the previous year, but had been bolstered by a 12% jump in daily fare paying passengers and a 37% increase in cruise and charter revenue.

Dunedin International Airport Ltd's profit was up slightly, to $1.151 million compared with $1.122 million the previous year, and Dunedin City Treasury Ltd also recorded a net profit of $386,000, compared with $4000 the previous year.

-chris.morris@odt.co.nz


DCHL six month results (to December 31, 2014):

Dunedin City Holdings Ltd

After tax profit up 17% to $10.1 million.
Group revenue up 9% to $128.3 million.
Group debt down $25.8 million to $586.5 million.

Aurora Energy Ltd

Net profit $7.301 million (up from $5.791 million in six months to December 31, 2013).

Delta Utility Services Ltd

Net profit $2.295 million (down from $2.765 million in six months to December 31, 2013).

City Forests Ltd

Net profit $3.724 million (down from $5.037 million in six months to December 31, 2013).

Dunedin City Treasury Ltd

Net profit of $386,000 (up from $4000 in six months to December 31, 2013).

Taieri Gorge Railway Ltd*

Net loss of $236,000 (down from $498,000 loss in six months to December 31, 2013).

Dunedin International Airport Ltd*

Net profit $1.151 million (up from $1.122 million in six months to December 31, 2013).

*Dunedin City Council owns 50% share.


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