Wakatu Inc plans for two new projects
Wakatu Incorporation has suffered a near $1 million loss after poor conditions affected its mussel products.
In the organisation's annual report, Wakatu chairman Paul Morgan described the financial result as very disappointing.
The report also reveals Wakatu is looking at two new development projects next year, but is not yet divulging details.
The $959,000 net loss after tax was down from a $3 million profit recorded last year.
The main reason for the negative result was the impact of adverse environmental conditions and poor weather conditions which reduced mussel supply and affected the quality of its mussel products.
"The environmental factors combined with the high value of the New Zealand currency produced an overall disappointing result," Mr Morgan said.
Its food and beverage sector had responded by reducing costs, managing risks by diversifying supply sources and seeking new ways to add value to its products.
Nelson-based Wakatu Inc has more than 3000 owners who are descendants of Ngati Koata, Ngati Rarua, Ngati Tama and Te Atiawa
It operates three sectors - Kono for its food and beverage enterprises, Whenua which includes property and other assets, and Manaaki for its legal, history and educational affairs.
A breakdown of its revenues shows 46 per cent is from seafood, 27 per cent from property, 18 per cent from beverages and 9 per cent from horticulture.
Group revenue for the financial year was $58.2m which was down $5.9m on last year, with mussel sales down $9m from last year.
Operating cash flows were $883,000, boosted by subdivision section sales.
Asset sales netted a further $5.7m in cashflow, with $11.3m investments in new property including marine farming assets, plant and a new winery at Awatere Valley in Marlborough.
Keith Palmer, who retired as chief executive in July but continues to work with the property sector, said in his report that the investments were funded by loan drawdowns totalling $8m over the year and $2.13m was paid in dividends.
Debt levels were $77.3m which was at the top of its self-imposed debt limits.
The property sector continued to grow steadily, he said. It provided a solid return with $19.8m in revenue, up from $18.6m last year.
Its commercial portfolio continued to progress and this year's residential section sales matched last year's high levels, he said.
It was looking at two new subdivisions and two new development projects, he said.
The subdivisions are at Motueka in Grey St, and in Nelson at Champion Rd which is still in the process of getting consents.
Mr Palmer would not give details of the development projects saying they were commercially sensitive.
While Kono had a loss of $5.3m, mainly because of the mussel supply problems, Kono Beverages had a successful year, operating its first winery at full production and producing a net profit of $785,000.
"This is especially pleasing as it reflects 15 years of building the business from an initial virtual wine company to one which now has three vineyards, its own winery and a strong international customer base," said Mr Palmer.
Mr Morgan said its key objectives this financial year would be to continue to position its new subsidiary, Kono NZ LP, to ensure high value growth, while reducing costs and risk, to support the stable growth of the Whenua sector. Another objective was to resolve long-standing legacy matters with the Crown including the Wai 56 claim and the Court of Appeal proceedings against the Attorney General.
- © Fairfax NZ News
Should the Nelson City Council spend up to $500,000 to fix the modellers' pond at Tahunanui?Related story: (See story)