Half Year Result to 31 December 2012

Dunedin City Holdings Limited

Half Year Result to 31 December 2012

Dunedin (Friday, 1 March 2013) - The Dunedin City Holdings group has achieved a better result in terms of both profit after tax and cash flow in its half year result, compared to the same period a year earlier.

For the six months to 31 December 2012, revenue increased by 2%, from $122.4 million to $124.9 million. This occurred even though the lower South Island economy has not grown, which has placed pressure on the contracting margins of Delta Utility Services Ltd.

The profit after tax has increased 57% to $7.87 million from $5 million. A better performance came from City Forests Limited as the prices received for logs sold increased in comparison with the first half of 2011/12.

Forestry returns are volatile as prices, exchange rates and shipping charges combine to constantly alter margins. However, over recent months shipping costs have been relatively stable and pricing has edged up in response to reduced flows of both North American and Russian logs into our North Asian markets.

Importantly, the cash flows generated by the operations of the group were higher. This factor, combined with less spending on capital items, allowed the group to reduce its debt to Dunedin City Treasury Limited.

Dunedin City Holdings Limited Chairman Denham Shale says “It is pleasing to be able to report a marked increase in the after-tax profit, combined with an improvement in the cash flow.

“The board has placed an emphasis on the consistent delivery of cash from the businesses and on improving focus on those areas of the business that will make a difference in the future. Therefore this positive move forward in results is encouraging.”

Aurora Energy Limited has traded well, although the lacklustre economy has slowed the growth in the quantity of electricity carried on the network.

Tourism growth in the South Island has been constrained. The sector of the business which benefits from cruise ships coming to Dunedin has been strong, but a strong Kiwi dollar and the shortage of Christchurch tourism facilities, such as hotels, is having an impact. These issues have reduced the number of independent visitors who have traditionally travelled on the scheduled daily train to the Taieri Gorge and at some stage may have flown into Dunedin.

However, the results from Dunedin International Airport Limited improved as the after-tax profit increased from $500,000 last year to $1.4 million. The number of domestic passengers was slightly down, by 0.8%, compared with the same six months of the previous year, but international passengers were up 4%. Dunedin residents using the Airport will notice that a major resealing of the runway has been carried out.

Note: The Dunedin City Council owns Dunedin City Holdings, which in turn owns five subsidiary companies and a 50% share in Dunedin International Airport Limited.

ENDS

© Scoop Media