Waikato-Tainui nearly doubled its annual net after-tax profit from $72.8 million last year to $137.8m in the latest period, partly due to gains on its property portfolio, accounts show.
Waikato-Tainui's Waikato Raupatu Lands Trust has just released full accounts for the March 31, 2017 financial year showing $45.1m gains last year shot up to $105.9m in the latest period.
Those are taken into the bottom line, vastly inflating the profit.
The $105.9m included fair value gains on investment properties, a $23m remeasurement on partial disposal of subsidiaries, revaluation gains, shares in listed companies, livestock and investments in equity funds.
Last year's net operating surplus of $73.9m rose to $120.7m in the latest period.
The trust manages tribal affairs, implements the development strategy and makes distributions for education, health and wellbeing, marae, and social and cultural development, Waikato-Tainui says.
It paid no tax because of its status as a charity.
Selwyn Hayes, EY's Maori sector leader and a tax partner, said many of the iwi groups had status as charities and could get tax exemptions.
"To the extent that they are committing their profits towards charitable purposes, that exemption from tax is available to Waikato-Tainui and to others. Some of the iwi groups are charities and some aren't," Hayes said.
Rental revenue declined from $35.3m last year to $25m in the latest period. Hotel revenue rose from $40m to $42m.
Last May, Tainui Group Holdings sold a half share of Hamilton shopping centre The Base to Kiwi Property, the annual report noted.
"The land at The Base remains in Pootatau Te Wherowhero title and $46 million of the sale price went back to the tribe as the advance payment for a long-term lease on the land," the business said.
The business also repaid bank debt of $100m and invested $50m of the Base sale money into a New Zealand and Australian share portfolio which holds Tower, Genesis Energy, Fisher & Paykel Healthcare, Ryman Healthcare and others.
"Direct investments we own in Go Bus and Waikato Milking Systems on behalf of the tribe made steady progress in 2016/17. Go Bus has won significant new contracts in South Auckland and Waikato Milking Systems made headway in export markets to help balance a tougher home market," the business said.
The business now owns 4780ha of land but wants more than 5000ha by 2020, it says.
The profits are directly benefiting the tribe which runs significant programmes and schemes.
The report said Tainui Group Holdings "has distributed its largest dividend to date of $16m, as well as a further special dividend of $6m. Our goal is to increase this annual dividend to at least $30m per year by 2021 as we continue to move towards more cash generating investments under the umbrella of the diversification strategy," the report said.
The business owns and manages three hotels which performed very well amid positive times for the tourism industry. Novotel Auckland Airport, Novotel Hamilton Tainui and the Ibis Hamilton Tainui all enjoyed high occupancy rates and commanded strong room rates.
"In mid-February 2017, TGH secured agreement with Auckland International Airport to develop a new 5-star hotel to meet growing demand for quality accommodation at Auckland Airport. The hotel building will carry the name Te Arikinui, the chiefly title of the late Maaori Queen Te Atairangikaahu," the report said.
Construction is due to start at the end of this year and the hotel will open by 2019, the annual report said.
Jordan Williams of the Taxpayers' Union objected to no tax being paid, saying the record result was "soured by the fact it doesn't pay company tax on the vast majority of its investments".
Comment has been sought from Waikato-Tainui in response.
Inland Revenue allows charities tax exemptions. Charitable organisations can receive many types of income including subscriptions, grants, subsidies, donations or koha, fees, raffle money, trading profits and proceeds from selling assets. Income tax exemptions are available if the entities are registered with Charities Services, IRD says.
Read the full report here: