Auckland Council's investments grow

Last updated 14:41 21/05/2014

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The Auckland Council's investment arm says the main risks to its healthy income would be from overseas in the form of travel, trade or economic setbacks.

After revaluing its portfolio, Auckland Council Investments (ACIL) has found its assets have grown in value by almost 70 per cent since it was established three and a half years ago.

ACIL's investments, which include Ports of Auckland and a stake in Auckland International Airport, have risen in value from $1.51 billion to $2.54b.

ACIL chief executive Gary Swift said the only risks on the horizon would be something affecting trade or tourism.

"Our biggest earnings obviously come from the airport and ports in terms of dividends, so it really relates back to the risks that affects those businesses," he said.

Higher profits boosted Ports of Auckland's value from $623 million to $1.08b, up 73 per cent from 2010.

The ports suffered when wharfies took industrial action over the ports' attempts to restructure their rosters, but much of the business appears to have returned.

In February, the port company reported an interim net profit of $26.4m, an increase of 70 per cent.

Swift attributed the ports' success to productivity gains and "having the right people around the table at the board meeting, and obviously then employing the right management".

He said it was clear the ports had done well since being privatised in 2005 after a buyout by the Auckland Regional Council's holding company, and later rolled into ACIL.

ACIL also acquired the Auckland Council's 22.4 per cent share of NZX-listed Auckland Airport, a stake which has almost doubled in value, by $506m to $1.13b.

Another asset, a $327m diversified financial asset portfolio, recorded gains of $67m, up 26 per cent.

The portfolio is split among 10 fund managers and invested in a range of equities, bonds and cash.

ACIL's other asset, Auckland Film Studios, grew from $3m to $8m in value.

Business there was steady, Swift said.

"It's a combination of overseas productions and also domestic television productions, and domestic and Australian commercials," he said.

"It's a business where you can go from having the place fully booked out for six to nine months to other periods when it's vacant."

ACIL plans to pay the Auckland Council a dividend of $156m before the end of June, which includes a $101.5m capital return from Auckland Airport.

This was above the $45m dividend budgeted for, he said.

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