Eastland Group Six Month Financial Result 2011
29 December 2011
Eastland Group Limited is pleased to announce its unaudited financial result for the first half of the current financial year to 30 September 2011.
Revenue for the 6 months was 4.2% higher at $37.6 million compared with $36.1 million for the same period the previous year.
Earnings from operations (EBITDA) were 4.9% higher at $17.1 million against $16.3 million the previous year.
Net Profit After Tax (NPAT) for the half year was 8.7% lower at $4.2 million compared to $4.6 million for the same period the previous year.
The reduction in reported NPAT is primarily due to the increased depreciation charges on the revaluation on port operating assets, which reduced NPAT by $1.0m.
The assets of the Group have grown slightly over the six months with total assets now standing at $349.4 million. Bank debt has remained stable and is currently at $100.4 million.
A half year gross dividend of $3.1 million was paid to our shareholder the Eastland Community Trust, with another dividend of the same amount forecast to be paid prior to the end of the financial year, equating to a full year gross dividend of $6.2 million, a 3.0% increase on the previous year.
The strong financial performance has been underpinned by a growing forestry sector fuelled in the main by continued strong demands out of Asian economies, in particular China.
The infrastructure at the port is under significant pressure from the increased volumes which has lead to the Company accelerating its port development plan. Capital investment in offsite storage at Matawhero and asphalting of the lower log yard will all assist in increasing the capacity, efficiency and ability of the port to cope with the growing log export volumes which this year are on target to be greater than 1.6 million tonnes.
The aviation businesses are generating an operating profit although this sector remains the most severely affected by economic issues facing the economy.
Generation volumes and revenues from the Waihi hydro station have been stable.
The performance of the Kawerau geothermal power station has been generating at above 96% availability during the period. Work has commenced on the construction of a new pipeline to deliver additional geothermal fluid and an increased output in the well performance with completion expected in early 2012.
The Te Ahi O Maui geothermal project continues to progress with the opening of an office in Whakatane, the recruitment of a project manager based in the Bay of Plenty and some significant milestones being achieved.
The Company is currently looking to develop new sustainable energy generation projects, in particular geothermal and hydro Opportunities.
The electricity distribution business provided a solid regulated return and the network performed well over the winter months given the number of significant weather events during this period. This provided the electrical network contracting business with above forecast workloads.
Gisborne Airport continues to provide the physical infrastructure required for an efficient regional airport. The Eastland Community Trust’s subsidy on the 50 seater Q300 aircraft finished in June 2011, in part driving the need for a pricing review which is likely to commence during the second half of the current financial year. This will allow some important capital investments, such as a runway reseal to be planned in the not too distant future.
The Company is also about to embark on a refinancing of its $125 million of bank debt facilities. It is hoped that the strong financial performance of Eastland Group will allow a reduction in the cost of debt funding to be obtained.
The outlook through to year end 31 March 2012 remains positive. At an operating level the Company is performing well, however there is some risk around external events which, in particular a slowdown in the Chinese economy, could impact unfavourably upon the export log business. These have the potential to adversely affect the Company’s, audited, net profit for the year ended 31 March 2012.
