Eastland Group full-year profit falls 2.6%, still manages to pay record dividend
By Jonathan Underhill
Aug. 4 (BusinessDesk) - Eastland Group, the community trust-owned company that runs Gisborne's port, airport and electricity distribution businesses, posted a 2.6 percent decline in full-year profit as operating expenses grew faster than revenue. That didn't prevent it declaring a record dividend.
Profit fell to $14.8 million in the year ended March 31 from $15.2 million a year earlier, according to its annual report. Revenue rose to $76.2 million from $73.9 million, while operating expenses rose to $34.6 million from $31.7 million.
The company paid a fully-imputed dividend of $7.8 million to Eastland Community Trust, up from $5.6 million a year earlier. Eastland Group was established in 2003 when it added the port business to lines company Eastland Network, creating a company with assets of $80 million.
Since then it has grown its assets base to $481 million, expanding its range of businesses to include log debarking, geothermal and solar power, and a marina. Its investments include 18.7 percent of Wellington-based Flick Electric. Some 76 percent of its assets are in its home turf of the Gisborne and Wairoa districts.
"The forecast over the next few years from our existing investments is positive with additional revenues being derived from both the ports and generation businesses, solid cash flows from our regulated electricity network and new revenues from our investments into retailing and emerging technologies," chairman Nelson Cull and chief executive Matt Todd said in the report.
The company plans to make capital investments of about $200 million over the next five years, with the largest being $96 million at Eastland Port to expand its log-handling facilities in preparation for projected growth in forestry harvest. It also plans to spend $50.5 million at Eastland Network to upgrade poles, conductors, transformers and switchgear, and $52 million on generation including completion of its Te Ahi O Maui geothermal project.
Earnings before interest and tax at Eastland Port, which includes Gisborne's airport, cool stores and its debarking operations, fell to $13.6 million from $13.8 million a year earlier, although revenue climbed to $31.3 million from $30.4 million and the port handled a record 2.5 million tonnes of exports, up 8.5 percent from a year earlier.
Earnings at Eastland Network rose to $13.1 million from $11.7 million as revenue climbed to $38.5 million from $36.5 million. Generation recorded earnings of $745,000 on revenue of $8.6 million. Its other business activities, which include Gisborne's Inner Harbour Marina, had earnings of $7.2 million on revenue of $15.8 million.
Eastland Community Trust was originally the Eastland Energy Community Trust set up in 1993 before being renamed in 2004.