Sharechat Logo

Dunedin City skips dividend from investment arm on Aurora Energy network upgrade

Tuesday 26th September 2017

Text too small?

Dunedin City Council didn't get a dividend from its investment division this year as the local authority braces for a $721 million decade-long capital investment programme to upgrade Aurora Energy's ageing infrastructure. 

Dunedin City Holdings paid $5.9 million to the council in the year ended June 30 through interest payments, but didn't make a dividend payment, as projected in the statement of intent, due to the planned capital expenditure for Aurora, the investment arm said in a statement. The unit isn't projected to make any dividend payments for the next three years, although it will continue to pay interest. 

"With planned capital investment by Aurora, it is prudent the company reduces dividend distributions to ensure the funds are invested into capital while maintaining an appropriate equity to total assets ratio," DCH chair Graham Crombie said in a statement. "This impacts on the distributions DCHL can make to the DCC as some funds will need to be retained to continue the maintenance programme."

The investment unit reported an annual net surplus of $18.5 million, down from $20.3 million a year earlier. A pre-tax surplus of $29 million was $5.8 million ahead of budget, it said. Revenue increased 1.7 percent to $275.1 million. 

Aurora kicked off its network upgrade with $45.2 million invested in capital projects in the year on new sub-stations, overhead line upgrades, power pole replacement and progress on the longer-term network system control and communications. The electricity distribution firm had 88,000 connections at the end of the financial year, with total assets of $472.6 million. 

The network operator plans to apply to the Commerce Commission to switch to a customised price-quality path - the regulated price it can charge - "to fund future investment" which wouldn't come into effect until 2020, the annual report said. 

DCH's accounts also included Dunedin Stadium Property for the first time, which earned the statements a tagged audit report by Audit New Zealand, which considered the stadium assets should have been recorded using a commercial valuation rather than public benefit one and would have been a materially lower carrying value than the $185 million accounted for. 

The stadium property unit widened its net loss to $8.2 million in the year from $3.6 million in 2016, while the venues management arm posted a surplus of $299,000 on revenue of $13.7 million. 

City Forests Ltd, which owns 16,795 hectares of forestry, generated a surplus of $20.1 million on revenue of $46.2 million. Delta Utility Services, the infrastructure services firm, posted a surplus of $4.8 million on revenue of $105.7 million, while the Taieri Gorge Railway tourism unit posted a profit of $172,000 on sales of $6.9 million. 


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

AIA June 2020 Monthly Traffic Update and July 2020 Preview
PCT - Delivering on strategy underpins strong operating result
KFL - August 2020 monthly update
BRM - August 2020 monthly update
MLN - August 2020 monthly update
Further COVID-19 Restrictions at SkyCity’s New Zealand Properties
FY20 results guidance met, Results date, Banking Facility
Sky sells OSB assets to NEP NZ, secures 10 year partnership
NZX fully operational - announcement re COVID-19
Heartland Market Update

IRG See IRG research reports