It would be primarily funded by a planned capital distribution resulting from an adjustment to the balance sheet of City Forests, which would take on more debt.
The expectation is laid out in a draft statement of intent for the 2023-24 year for Dunedin City Holdings Ltd (DCHL), which is owned by the council.
An interest payment to the council of $5.9 million is also forecast.
The council signalled in letters of expectation it wanted higher dividends than $11 million in future years.
The DCHL board said it was comfortable next year’s dividend was achievable, but noted $10 million of it would come from a planned capital restructure of City Forests, rather than being based on the group’s dividend policy.
City Forests’ balance sheet had grown stronger in recent years due to factors such as increased productivity, improved supply chain efficiency, favourable markets for logs and increases in land value, DCHL said.
