Eastland Group makes record profit

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

COMMUNITY-OWNED specialist infrastructure company Eastland Group is back on record-breaking form, and plans to invest more than $120 million into infrastructure across the region, over the next five years.

Eastland Group, which owns Eastland Port, Eastland Network, Eastland Generation and operates Gisborne Airport, today announces a record audited profit of $15.2m for the year ended March 2016 - a rise of $1.1m from the previous year, also beating the company’s previous record profit of $14.9m (in 2014).

Chief executive Matt Todd said the company’s performance was due to “continuing execution against strategy” and its ability to have diversity in terms of both sector and geography.

“Each of our businesses has its own set of challenges and opportunities, and we have great people who are able to manage through these.

“While we are community-owned, we are also a commercial organisation and our shareholder expects a return on the capital they have invested in us. The increased profit means increased dividends to the shareholder and benefits to the community.

“There are other flow-ons too. Eastland Group pays local people’s salary/wages and spends on local goods and services – we will be releasing more details when we release the full annual report in August.”

The company is wholly-owned by Eastland Community Trust and was able to pay ECT a fully-imputed dividend of $5.6m, up $600,000 from the previous year, while interest paid on shareholder capital notes was down $500,000 to $2.1.

ECT was paid $7.9mTaken together, ECT was paid $7.9m, a rise of $300,000 from the previous year. Mr Todd explained that the capital notes were a debt instrument ECT had placed with Eastland Group, and which guaranteed ECT a certain level of interest per annum.

“The capital notes have a term associated with them… at that point there is a decision about whether to renew them and what the coupon rate (interest rate payable) is. The capital notes currently have a term of five years and a coupon rate of 7.1 percent per annum.”

The record profit recorded this financial year was made while the company invested heavily in the district through a series of investments, including the $12m upper log yard expansion at Eastland Port, and a $2.5m project to reseal Gisborne Airport’s runway.

The company had also this year agreed to advance a $120m project to build a geothermal power plant near Kawerau and Mr Todd said the company was committed to further regional investment over the coming year.

“We have a strong investment plan across all three sectors, electricity networks and electricity generation, and ports. Our commitment to the Tairawhiti/Gisborne region is ongoing, and over the next five years we plan to invest $123.5 million in local infrastructure.”

It is also committed to spending about $12m over the next five years on its new 110kV assets, formerly owned by national grid operator Transpower. That would be on top of about $1.5m a year Eastland would spend on operations related to those assets.

“During the 2016 financial year our focus was on the ongoing development and implementation of operating procedures/protocols and asset management schedules for the high voltage assets.

“These assets are now run as an integral part of the electricity network, and we will invest to ensure they meet the needs of Gisborne, Wairoa and the East Coast for a secure and reliable connection to the national grid.”

See also Eastland Group’s profit announcement story in today’s Business Quarterly.