EASTLAND Group Ltd has announced an after-tax profit of $5.3 million for the year ending 31 March, 2012, well down on the previous year’s result of $8m.
Group chief executive Matt Todd said this was primarily due to non-cash end-of-year adjustments required under New Zealand International Financial Reporting Standards, and it was a good result for the Eastland Community Trust-owned operator of the district’s electricity network, port and airport.
“The fundamentals of the business are strong and the business is well-positioned to continue to grow, and to be a key driver of economic development in the region and beyond,” he said.
Underlying profit, which adds back the non-cash end-of-year adjustments, was $8.70m for 2012 compared with $8.01m in 2011. This was supported by year-on-year increases in revenues, gross profit as well as net cashflows from operating activities.
Eastland Group has bought a geothermal power generation plant in Kawerau, in the eastern Bay of Plenty, and recently invested in a second site nearby that will cost around $40m to develop.
“The company continues to work with its shareholder to look at ways of funding its future growth and investment requirements. The option of bringing in a minority cornerstone shareholder continues to be considered,” said Mr Todd.
“Having a group of shareholders who collectively (in aggregate) have a minority position is a possibility.
“We are working with ECT to make sure that the intended process will meet their needs and those of the company. Once this initial step is complete and if decision is made to continue, I understand that ECT is planning on a broader communication.”
Dividend distributions to Eastland Group’s 100-percent shareholder, ECT, were $4.4m for the financial year — up from $4.2m the previous year.
This continued a trend of increasing dividends over the past five years, said Mr Todd.
Interest of $2.6m was also paid on the $30m of capital notes held by ECT.
Bank debt at year-end was $100.5m and the $125m term debt facility was successfully refinanced at significantly reduced pricing during the period, with bank funding facilities now in place through to 2016.
Revenue for the group was up on the previous year from $72.9m in 2011, to $76.2m in the 2012 year. Revenues have grown over the past seven years from $30.8m to the current level.
Total assets have increased to $354m, while equity grew to $164m.
Mr Todd provided the following detail on the non-cash end-of-year adjustments:
“We were required to impair some of our intangible assets (goodwill) — this was $1.86m. We were also required to provide for an option/loan that we have to invest in a future geothermal project; even though we think there is a high probability we will exercise the option, this was $1.52m. Neither of these are tax deductible.
“Therefore $5.32m plus $1.86m plus $1.52m equals underlying profit of $8.7m. Last year the net profit was $8.00m and there was $40,000 of impairment, so the underlying profit was $8.04m.”
A more detailed announcement will be made in conjunction with ECT’s end-of-year result and annual general meeting later in the year.