MetService annual profit slips as it invests in new ocean business, pays more tax

Meterological Service of New Zealand, the state-owned weather bureau, reported a 5.6 percent drop in annual profit as a bigger tax bill and higher costs from its new acquisition weighed on earnings.

Profit fell to $2.6 million in the year ended June 30, from a $2.7 million a year earlier, according to Wellington-based MetService's annual report. Sales rose 7.9 percent to $45.6 million, its third-highest since becoming a state-owned enterprise in 1992. Profit before tax gained 13 percent to $4.3 million.

In the financial year, the company spent $3 million on a 49 percent stake in MetOcean Solutions, a New Zealand-based oceanographic business, to further its international commercial subsidiary MetraWeather, which provides weather content across a variety of mediums around the globe. In the year it formalised its "weather as a service" unit and expanded its digital output, providing an online content, graphics and clips site for media outlets.

"To remain competitive, we will continue to focus on growth while responding to the rapidly-evolving technological requirements of our customers," chairman Sarah Smith and chief executive Peter Lennox said in the report. "Exporting meteorological expertise to the world under the MetraWeather brand enables us to maintain one of the best blue-chip client lists of any kiwi company, thereby creating wealth for our stakeholders and ensuring a continuity of investment to keep New Zealanders safe."

Costs rose 7.6 percent to $40.6 million in the year, as the company spent more on staff and booked about $867,000 more in depreciation charges, which was largely on its software. MetService reported a tax expense of $1.77 million, up from $1.02 million a year earlier.

MetService has a dividend policy of paying 35 percent of profit. In the 12 months ended June 30, it paid the government $2.28 million, or 45 cents per share, in dividends relating to the prior year. A final dividend for the 2014 year is yet to be announced.​