The owner of the Ports of Auckland has upped its interim payout to the Auckland Regional Council by 15.9% after returning to profitability in the last six months of 2009.Auckland Regional Holdings (ARH) – the commercial arm of the regional council w
The owner of the Ports of Auckland has upped its interim payout to the Auckland Regional Council by 15.9% after returning to profitability in the last six months of 2009.
Auckland Regional Holdings (ARH) – the commercial arm of the regional council with a $1 billion portfolio of assets – revealed today that it paid out $74.3 million to the council in the six months ended December, up from $64.1 million in the last half of 2008.
It also recorded a net profit for the half year of $31.7 million, well ahead of the budgeted $13.2 million.
The profit follows a $68.8 million loss in the second half of 2008, which included a $45.7 million non-cash writedown and net unrealised loss of $37.2 million in global equities in its diversified financial assets portfolio.
With the worst effects of the global economic slowdown now starting to ease, ARH chief executive officer Peter Casey told NBR the better-than-expected interim profit was largely due to the strong performance of its international bonds and equities, with that portfolio recording a net profit of $20.8 million for the six months.
“The port was also in the midst of its large capital restructure in the previous period, which meant there was no dividend from them at that time and that had a direct effect on the final result.”
ARH has paid out $570.7 million to the council over the past five and a half years.
Mr Casey said it remains committed to its 10-year funding plan that is set to last until 2015, even though the ARC will cease to exist when the supercity is formed later this year.
Despite the uncertainties that still exist around the new council and what role the port will play under the new system, Mr Casey said it ARH would carry on as normal until final decisions on the supercity’s asset structure – still a work in progress - were made.
The payouts to the council were set to ease last year as the council caught up with a large backlog of regional transport and stormwater works, allowing the financial assets to recover and grow.
But ARH chair Judith Bassett said the removal of the regional fuel tax meant high distributions were still needed from the investment entity.
“Meeting these distributions in stressed economic times came at some cost, with 57% paid since inception funded from ARH’s capital and 43% from ARH’s income.”
Earlier this year, Ports of Auckland recorded an interim net profit of $13.9 million, up 49% on the previous year, leading to a dividend payout to ARH of $9.9 million.
ARH’s other main investment in Auckland is the Wynyard precinct on the waterfront, with the Auckland City Council and ARH committing $211 million over the next 10 years to its development.
In February, Kiwi Income Property Trust it was going to own and develop ASB Bank’s new $160 million headquarters at the precinct.
That project is due to be completed in 2013, but Mr Casey said the underlying work on the entire urban renewal scheme was “well underway”.
