Geothermal production drives record Eastland earnings, payout
By Gavin Evans
May 20 (BusinessDesk) - Eastland Group has returned a record $12.1 million to its community shareholding trust, boosted by earnings from the firm’s new geothermal plant at Kawerau.
The payout – comprising a $10 million dividend and $2.1 million of capital note interest – is up from $8 million and $2.1 million last year.
The increased dividend was driven by the group’s record $20.1 million net profit for the year ended March 31, up from $17.6 million the year before. Revenue climbed to $97 million from $84.7 million.
Chief executive Matt Todd said the firm’s $137 million Te Ahi O Maui geothermal development at Kawerau was an important contributor to the result.
The 25 MW plant, developed in partnership with the A8D Ahu Whenua Trust, was connected to the grid in October, just in time to benefit from months of strong wholesale electricity prices.
“Combined with GDL, our other geothermal plant in Kawerau, Eastland Generation delivered $19.5 million towards our total income,” Todd said in a statement. That was more than twice the $7.7 million of revenue Eastland’s generation business delivered last year.
Gisborne-based Eastland operates the region’s electricity distribution grid, the port and the city’s airport. It is wholly-owned by the Eastland Community Trust and in recent years has invested outside its region and in new fields to diversify its earnings stream.
It has a 20 percent stake in Wellington-based power retailer Flick, having acquired an initial stake in late 2015, and is currently investigating the feasibility of a co-generation plant fired on wood-waste. Eastland’s port business started a debarking of logs partnership with Hikurangi Forest Farms in 2008 and has run the debarking operation at Northport since 2014.
Before Te Ahi O Maui's commissioning, the port and power network each accounted for more than a third of the group’s revenue and 40 and 34 percent respectively of the company’s earnings before interest and tax.
Todd noted that in the latest period, the port and the network, which supplies about 25,500 homes and businesses, delivered similar ebit to the $17.2 million and $14.6 million they reported last year.
In the latest period, the port handled almost 2.96 million tonnes of cargo, most of it logs, down from the record 3 million tonnes moved a year earlier.