Dunedin City Holdings Ltd (DCHL) group chairman Keith Cooper said the result was as expected and reflected the substantial re-investment under way within the group, particularly at Aurora Energy Ltd.
Meanwhile, debt across the companies and the DCC has climbed from $647million at the end of 2018 to $739million at the end of last year.
DCHL group had forecasted to make a loss in the 2020 and 2021 financial years, and return to profitability in the 2022 financial year.
"At this stage, we expect full-year results to broadly meet the forecasts in our Statement of Intent.
"However, we are closely monitoring the impact of coronavirus on the Group, particularly at City Forests Ltd," Mr Cooper said.
Total revenue for the six months to December 31, 2019 was in line with budget and higher than the same period the previous year.
Across the group, operating costs were higher than the same period last year, but lower than what was budgeted for this six-month period.
The further reduction in cost of funds achieved by Dunedin City Treasury Ltd has continued to make a favourable contribution across the group.
DCHL remained on track to distribute $5.9million within the financial year to the DCC by way of interest, in line with expectations.
No dividend was forecast for this year, given the financial result.
"With some subsidiaries embarking on a substantial re-investment programme, it’s prudent to ensure a balance between distributions and using internally generated surpluses to fund reinvestment.
"This reinvestment is essential to building sustainable future earnings and restoring dividends to Dunedin City Council."
The group’s overall debt, managed by Dunedin City Treasury Ltd, increased over the half year, as forecast.
This was principally driven by increased capital expenditure at Aurora Energy and the Dunedin City Council. The continued reduction in the cost of the group’s funds over the year was welcome in the context of increasing debt.
Group term borrowings total $739million (excluding shareholder’s advance). This includes $231million DCC debt, $88million stadium debt, and operating company borrowings of $374million.
Mr Cooper said these figures compared favourably with the book value of DCHL group’s assets, which now sits at $1.42billion
Cash from operations remained strong at $20.3million.
"The ability of the group to maintain strong operational cash flows is important to meet future dividend and capital investment requirements," Mr Cooper said.
The outlook for most DCHL group companies for the second half of the financial year remains stable.
However, City Forests Ltd is likely to have lower sales as a result of market disruption due to Covid-19.
