Council company reports a loss

The Waitaki District Council-owned contracting company Whitestone Contracting made a loss for the first six months of this financial year, but only after donations and sponsorships to the community.

Company representatives will appear before the council today to deliver Whitestone's latest six-monthly report on a loss of $53,423 before donations, sponsorship and tax.

After tax recoveries, the company had a loss of $16,371.

The council owns all the shares in the contracting company, which employs 169 people and recorded a turnover of $9.811 million for the six months to the end of December.

Operating expenses, including interest payments, totalled $9.864 million.

In his six-monthly report, Whitestone chairman John Walker said several factors led to the loss, including a reduction in subsidies paid to local authorities by the New Zealand Transport Agency for roading work which widely affected the contracting industry.

"Whitestone was no exception to this, as it has roading maintenance contracts with the Waitaki, Waimate and Mackenzie District Councils," he said.

The general economic downturn had also affected the workload available to contractors, leading to a significant reduction in margins by competitors in an attempt to gain contracts to keep staff and plant operating.

"All these factors have had a major impact on our workload, leading the company to restructure its operations, with staff levels trimmed within the Waitaki area, along with closing down its contract cultivation division during December," Mr Walker said.

Market conditions were expected to continue to be challenging for some time yet and the company would progressively fine-tune its operations to ensure there was sufficient ongoing workload available to keep staff employed at commercially acceptable margins.


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