CCHL nearly triples dividend payout with special payment

Thursday 29 September 2016 01:20 PM

Christchurch council investment unit nearly triples dividend payout with special payment

By Jonathan Underhill

Sept. 29 (BusinessDesk) - Christchurch City Holdings Ltd, the city council's investment unit, pulled cash out of its power company Orion New Zealand to almost triple its dividend payment, adding a special $90 million contribution to the city's long-term funding plan.

The company's investments in companies such as utility Orion New Zealand and Christchurch International Airport generated $138 million in underlying pretax earnings in the year ended June 30, from $130.9 million a year earlier.

CCHL paid $132 million to the city including the $90 million special dividend, which it said was "towards the capital release programme." It paid $46 million in dividends a year earlier, higher than the $42 million 'ordinary' component of the latest year's payment.

The council amended its long-term plan over the past two years, reducing the overall 'capital release' it expected from CCHL by 2025 to $600 million from $750 million and delaying $110 million earmarked for 2015/2016 until 2016/2017. The plan has become a political issue for the upcoming local body elections because of the prospect of asset sales. Mayor Lianne Dalziel has said the capital release could be by way of an issue or by asset sales.

CCHL chair Bruce Irvine said the improved earnings reflected growth at Christchurch Airport, which experienced a record 6.3 million passengers and a 14 percent gain in pretax earnings to $57.5 million. The holding company owns 75 percent of the airport along with 89 percent of the local power company, Orion, which made $136 million in distributions including $80 million from a share buyback and a special dividend of $13 million.

CCHL also included an impairment expense recognised by Lyttelton Port Co following the receipt of earthquake insurance proceeds in 2014. During the year CCHL became 100 percent owner of Enable Networks after buying out Crown Fibre Holdings' stake in the fibre network.

Details of the results were released under embargo via a four-page media release with the actual annual report to become available on the www.cchl.co.nz website.

(BusinessDesk)

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