Auckland nets $84m investments surplus
Auckland Council Investments (ACIL), the supercity's investment company, has announced its first full 12-month financial result and a net surplus of $84.1 million, mostly derived from its holding of airport company shares and trading at Ports of Auckland.
Removing the effects of revaluations and impairments the net surplus after tax would have been $54m compared with $29.6m in the eight-month period reported in ACIL's 2011 accounts.
ACIL earned a net after-tax profit of $30.6m from $14.8m in the previous eight-month period, and paid a return of $30m to Auckland Council, $3.2m or 11.9 per cent higher than had been budgeted for.
Chief executive Gary Swift said it was a "great result" for the council and ratepayers.
In total, ACIL holds assets worth $1.5 billion.
Ports of Auckland made a net loss after tax of $2m compared to a profit after tax of $14.8m in 2011.
However, when the effect of land revaluation is excluded, the port made a profit after tax of $29.1m.
The chairman and chief executive's report describes the port's year as "challenging".
"Against the background of the worldwide economic downturn, there was significant disruption at the container terminal as a result of an industrial dispute.
"However, while the container side of the business was hit hard by the dispute, the rest of the business continued to perform well," the report says.
The port benefited from the restocking of imported Japanese cars after supply was disrupted by the 2011 Japanese earthquake and tsunami and from salvage services provided after the grounding of the Rena off Tauranga.
Vehicle volumes were up 16.9 per cent while break bulk (non- containerised) shipments rose 10 per cent, Swift said. Container traffic was down 9.6 per cent.
The business paid dividends of $17.5m to ACIL for the year, however, return on equity at 6.2 per cent was 0.3 per cent below target, once again mainly due to property revaluations, ACIL said.
ACIL is continuing to pursue return on equity from the port of 12 per cent by 2016 once labour flexibility and an organisational redesign are fully implemented.
"The additional return is equivalent to additional dividends of $20m per annum to ACIL and then to the council, or approximately $40 per ratepayer per annum," the report says.
Last week Swift described that goal as achievable and sustainable. The industrial dispute that ensued when port management tried to implement those changes is now in court- sponsored facilitation.
ACIL owns a 22.4 per cent holding in Auckland International Airport as well as 100 per cent of Auckland Film Studios. Shares in Auckland Airport gained 9.7 per cent in the 12 months ended June 30.
ACIL's share of Auckland Airport's surplus rose to $31.4m from $13m in the previous eight months, benefiting from arrivals for the Rugby World Cup and the diversion of traffic away from quake-hit Christchurch.
The airport paid dividends of $26.9m to ACIL.
Auckland Film Studios, which became a subsidiary of ACIL during the period, reported an after-tax profit of $0.4m in the 15 months to June 30 after a loss because of revaluation of property in its earlier 12-month period.
The film studios were fully booked between October 2011 and April this year, for the filming of Emperor, a big-budget American feature film, ACIL says.
- © Fairfax NZ News