Council Investments reports surplus, lifts dividend
13 September 2012
Council Investments reports surplus, lifts dividend to ratepayers
Auckland Council Investments Ltd, which owns and oversees two major equity investments on behalf of the region’s ratepayers, today announced its first full 12-month financial result, including a Group net surplus of $84.1 million, as its holding of airport company shares appreciated and its ports company traded profitably.
Auckland Council investment Ltd (ACIL) owns assets worth approximately $1.5 billion, comprising a 22.4 per cent holding in Auckland International Airport Ltd, as well as 100 per cent stakes in both Ports of Auckland Ltd (POAL) and Auckland Film Studios Ltd (AFSL). Shares in Auckland Airport gained 9.7 per cent in the 12 months ended June 30, while POAL made an after-tax profit of $29.1 million.
At the parent level, ACIL earned a net after-tax profit of $30.6 million, from $14.8 million in the previous eight months, which allowed it to return $30 million to Auckland Council for the benefit of ratepayers. This dividend was $3.2 million, or 11.9 per cent, higher than budgeted.
“This is a great result for both Auckland Council and for ratepayers and we look forward to producing still higher returns in future years,” said Gary Swift, ACIL’s chief executive. “ACIL’s role is to bring a strong commercial focus to bear on the ownership of these valuable strategic assets for the long-term benefit of the Auckland region. Our contributions help to make Auckland prosperous, well connected, accessible and full of opportunity.”
The council-controlled organisation produced a total return on equity of 15.5 per cent, from 9.7 per cent annualised in the previous year.
While POAL’s container business suffered
from the economic downturn and industrial dispute, its
overall business benefitted from the restocking of imported
Japanese cars, after supply was disrupted due to the 2011
earthquake, and salvage services provided after the
grounding of MV Rena on the Astrolabe Reef
POAL’s break bulk, or non-containerised, shipments also rose 10 per cent
POAL paid dividends of $17.5 million to ACIL in the 12 months
ACIL’s equity share of Auckland Airport’s surplus rose to $31.4 million from $13 million in the previous eight months
The airport company benefitted from a surge of arrivals for the Rugby World Cup 2011 and the diversion of some traffic away from quake-hit Christchurch
Auckland Airport paid dividends of $26.9 million to ACIL
AFSL, which became a subsidiary of ACIL during the period, reported an after-tax profit of $0.4 million in the 15 months to June 30, rebounding from a loss due to revaluation of property in the earlier 12-month period
The film studios were fully booked between October 2011 and April this year, for the filming of Emperor, a big-budget US feature film.
ACIL also manages a diversified financial assets portfolio on behalf of council, which returned 4 per cent for the 12 months ended 30 June, higher than the 3.46 per cent benchmark. Given the turmoil in global financial markets, particularly in Europe, during the period this is a very solid result, said Mr Swift.
ACIL aims to achieve still greater returns from the diversified financial assets portfolio in the months and years to come. It is now 69 per cent invested in growth assets, from 19 per cent in the year-earlier period.