Christchurch City Holdings is paying its council shareholder dividends worth more than twice its earnings in the six months ended December.
The company owns 89.3 percent of electricity lines network Orion, 100 percent of Lyttelton Port and Red Bus, and 75 percent of Christchurch International Airport. It has assets worth $4.2 billion and is paying the council $92 million in dividends.
However, net profit attributable to the council for the six months ended Dec. 31 rose to $47.8 million from $42.5 million in the same six months a year earlier.
Chief financial officer Leah Scales says only $22 million of the payment is an ordinary dividend. The remaining $70 million is a special dividend and part of an agreed release of capital – the final special dividend of $70 million will be paid after the end of this financial year.
By then, CCH will have paid the council $440 million as part of a plan to help it meet its on-going costs after earthquake repairs pushed the council up against its borrowing limits. In 2017 CCH sold $150 million of bonds maturing in December 2020 and in 2018 it sold another $150 million in bonds maturing in November 2024, both of which are listed on NZX, to help fund this commitment.
The investment company says the latest result reflects earnings growth from the airport and the posting of a maiden profit by wholly-owned fibre company Enable Services.
The latter posted a $920,000 profit from a $3.7 million loss in the previous first-half while the airport lifted its profit 25.6 percent to $24.3 million.
“These positive results are coupled with continued difficult trading conditions for our smaller contracting companies,” CCH says.
The airport’s profit increase mostly came from strong income streams from its commercial portfolio while Enable Services’ result reflected increased connections which continue to track ahead of expectations.
CCH says Enable now has 50 percent of the fixed broadband market within its greater Christchurch coverage area.
Orion’s result decreased to $29 million from $30.7 million. “Whilst slightly down on target, Orion continues to provide strong support to its shareholders in the form of dividend payments,” it says.
Lyttelton Port’s first-half net profit fell 27.4 percent to $6.3 million with container volumes down, primarily due to fewer coastal import containers. Scheduling issues faced by Ports of Auckland also impacted the national supply chain.
“On the positive side, the period saw the arrival of the biggest container vessel at 5,900 TEU, taking advantage of the newly created channel depth,” CCH says.
Previously, the largest vessels to call at Lyttelton had been 4,500 TEU or twenty-foot equivalent units.