Port Otago has delivered a $6.9 million dividend to its owner, the Otago Regional Council, but warned a revenue decline of up to $5 million must be addressed.
Following last year's record handling of 218,000 containers, this year it was expected there would be a loss of up to 42,500 container movements.
Port Otago chairman John Gilks yesterday delivered a summarised version of its annual report to the ORC for the year to June, saying that "after a series or growth years, we need to make adjustments".
"We can't accept an impact of that order [down $5 million] and must bring in the rest of the business to fit that level," Mr Gilks said.
Port restructuring plans, which were likely to result in some job losses among its 320 employees, were expected to be announced next week, chief executive Geoff Plunket said after the meeting, Last year, Port Otago's overall profit was down almost 30%, from $39.3 million to $27.8 million, the latter including unrealised revaluations of properties of subsidiary Chalmers Properties worth $17.9 million.
However, last year, Port Otago delivered its first special dividend to the ORC, up from $6.9 million the previous year to a record $9.4 million.
For the year to June 2009, Port Otago's overall profit was down 47%, from $27.8 million to $14.6 million, again due to the lower level of unrealised gains from Chalmers Properties.
Mr Gilks said the balance sheet remained "sound", and highlighted "pretty healthy" cashflows of $21 million, with earnings before interest, tax, depreciation and amortisation up 9% to $28.7 million.
Confirmation of yesterday's $6.9 million full-year dividend means the ORC has received $60.9 million from Port Otago since 1988.
Mr Gilks was asked after the meeting what impact a $5 million decline in revenue could mean for the ORC dividend next year.
While there was "guideline" that 70% to 80% of profits from Port Otago and Chalmers Properties would go toward a dividend, the ORC had acknowledged port operations was the first consideration of its directors and the year ahead would remain "volatile" overall for the port and shipping industries, he said.
In mid-August, Chalmers Properties announced it was selling 13 freehold land titles of mainly industrial-zoned land near central Dunedin, potentially worth between $10 million and $12 million.
Mr Gilks said yesterday Chalmers was "over-weighted" in Dunedin-owned land and proceeds from that sale would go toward paying for a large industrial site in Wiri, Auckland, which was recently bought for $11.7 million.
