Half Year Result to 31 December 2016

Dunedin City Holdings Limited

Half Year Result to 31 December 2016

Dunedin (Tuesday, 7 March 2017) – Dunedin City Holdings Limited has reported a surplus after tax of $4.9 million for the six months to December 2016, in line with budget.

The recent trend of debt reduction has also continued during the financial period. Total debt for the group (which includes the Dunedin City Council) has decreased from $580 million at the end of June 2016 to $561 million at the end of December, a $19 million decrease.

All companies within the group operated close to budget expectations.

Dunedin City Holdings Limited Chairman Graham Crombie says, “It is again pleasing to be able to show a positive financial result for the group. The strong operating cashflow and overall lower debt levels continue to reflect the group’s stable financial performance.”

Aurora Energy Limited’s profit was in line with budget expectations. The profit was lower than previous periods as the company invested in higher levels of network maintenance and new network assets that are unfunded because of the company's earnings being regulated as an electricity business.

Following a report by Deloitte, operational changes are being made by Aurora and Delta Utility Services Limited, but these are not reflected in this reporting period.

Delta’s surplus for the period was consistent with the previous year and in line with expectations. The company continues to provide a broad range of energy and environmental services to local authority and private sector customers.

Strong domestic demand and steady exports, along with log export prices, favourable shipping costs and the exchange rate, were key factors for City Forests Limited this period. Forest production was below budget as a result of agreed changes to the clear fell plan and contractor schedules within the forest estate. This will be caught up by the end of the financial year. The net profit for the company was $3.5 million.

Taieri Gorge Railway Limited was assisted by a slow but steady increase in tourist numbers. However, the late start to the cruise ship season and four cruise ship cancellations resulted in a loss which was larger than that for the same period the previous year.

Operating revenue for Dunedin Venues Management Limited was consistent with the same period in 2015, with a six month surplus of $100,000. Mr Crombie says, “We are now seeing the benefit of the recommendations of the DCC's stadium review.”

In December last year, Dunedin Venues Limited changed its name to Dunedin Stadium Property Limited to better reflect the operation of the company. It has reported a net loss of $3.2 million, compared to a loss of $4 million for the same period in 2015. This was largely due to a decrease in interest costs following the stadium review outcomes.

Dunedin International Airport has performed strongly this period. A rise in operating revenue on the back of passenger numbers compared to operating expenses, along with a decrease in interest costs, lifted the overall financial performance.

The outlook for the balance of the financial year is positive, with full year results expected to be close to budget.

Note: The Dunedin City Council owns Dunedin City Holdings Ltd, which in turn owns seven subsidiary companies being:

· Aurora Energy Ltd

· Delta Utility Services Ltd

· City Forests Ltd

· Dunedin City Treasury Ltd

· Taieri Gorge Railway Ltd

· Dunedin Stadium Property Ltd

· Dunedin Venues Management Ltd

and a 50% share in Dunedin International Airport Ltd.

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