Orion profit soars to $27m

MARTA STEEMAN
Last updated 05:00 05/03/2013

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Some of the eight trading companies of Christchurch City Holdings are still struggling with post-quakes fallout, but the combined group posted a $34.5 million half year profit, 10 per cent higher than the previous half.

Much of the higher group profit was contributed by electricity lines company Orion New Zealand.

CCHL supervises and monitors the performance of the eight council trading companies.

Orion's profit jumped 85 per cent to $27.2m for the six months to September 30 2012, compared with $14.7m in the previous first half.

Orion is applying to the Commerce Commission to raise its prices to pay for earthquake repairs and a network upgrade which will cost Canterbury consumers at least on average $1000 each over 10 years.

Two other group companies posted higher after-tax profits for their half years.

Lyttelton Port Company's profit for the six months to December 31 2012, came in at $3.3m, 15 per cent higher than the $2.8m of the previous first half. But if earthquake-related items are excluded from LPC's result its trading profit would have been 16 per cent lower.

Lyttelton's revenue rose 4.5 per cent to $54m. Volumes were up in bulk cargo, bulk fuel and containers but coal volumes from state coal miner Solid Energy were 20 per cent lower.

The other higher result was recycler EcoCentral. Its first-half profit was $600,000, double the previous half.

CCHL continues to support this company. A loan of $5m will not have to be repaid but will be converted into equity.

The eight companies raked in revenue of $463.5m in total, 9.4 per cent higher than the previous first half. They provided $22.8m of dividends to the city council.

The companies' total assets are $2.54 billion with the council having equity of $1.38b. CCHL chairman Bruce Irvine said the result showed some recovery from the earthquakes.

Christchurch International Airport recorded a 7.5 per cent fall in profit to $7.4m for the six months to December 31, 2012, compared with $8m in the previous period.

The airport suffered minimal damage from the earthquakes though passenger numbers have declined.

It increased revenues however through commercial activities related to running an airport and through developing property for freight and logistics companies and retailers near the airport.

Broadband company Enable Services recorded a loss of $3.4m, compared with a $400,000 loss the previous half. The greater loss was expected for the period while the network was under construction, CCHL said.

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Building, parks, water and wastewater maintenance and infrastructure company City Care's profit fell to $5.4m from $9.7m the previous first half, because of a lot less emergency work in the six months to December 2012, compared with the six months to December 2011.

National "horizontal" construction and maintenance work was strong for City Care while some areas of construction and water repair work took longer to eventuate than forecast. The company would have more construction work as the rebuild moved into full swing.

Red Bus' loss doubled to $400,000 from $200,000 with effects from the quakes and lower patronage hurting the company. Its results were expected to improve from the 2014 financial year. Patronage would remain muted during the central-city rebuild.

Selwyn Plantation Board had sold most of its assets. CCHL was expecting a final capital payment in the 2013 calendar year.

CCHL GROUP COMPANIES

- Orion New Zealand: 89.3% (owned by the city council). Profit $27.2m for the half year, 85 per cent higher than the previous first half

- Christchurch International Airport Ltd: 75% (owned by the city council). Profit of $7.4m for the first half, 7.5 per cent down.

- Lyttelton Port Company Ltd: 79.5% (owned by the city council). Profit of $3.3m for the half year, 15 per cent up.

- Enable Services: 100% (owned by the city council). Loss of $3.4m for the half year, 7.5 times greater loss than the previous first half loss.

- City Care Ltd: 100% (owned by the city council). Profit of $5.4m for the half year, 44 per cent down.

- EcoCentral Ltd: 100% (owned by the city council). Profit of $600,000 for the half year, double the previous first half.

- Selwyn Plantation Board: 39.3% (owned by the city council). Being wound up. CCHL expects a final payment this year.

- © Fairfax NZ News

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