Dunedin City Holdings Ltd - Annual Result Year Ending 30 June 2011

“I am pleased to report a year of outstanding performance during which we have seen both revenues and cash flows exceed last year's result.

“Directors have been very satisfied with the results of the core businesses. Forestry returns, both from the point of view of operations and carbon credit receipts, have been a record for City Forests Limited and we have also seen very positive growth from DELTA Utility Services Limited” comments DCHL Chairman, Paul Hudson.

While the regional economy has been unimpressive DELTA Utility Services Limited, our water, waste-water and general contracting operations, improved its revenues by 19% to $103.7m. Overall the revenues of the group increased 9.4% to $245.8m and cash flow generation from operations went up from $32.1m to $39.2m.

The profit after tax from City Forests Limited improved from $7.1m to $9.5m. Two factors underly this result. We had a large improvement in log prices, caused by high demand for resources within Asia, and strong sales of carbon credits. However the increase in the forest valuation was substantially less than last year. The 33% improvement in profit after tax and the cash flow performance that more than doubled the cash flow produced from operations last year was therefore very satisfying.

The profit after tax for Dunedin International Airport was higher than budgeted. Total international passenger movements through the airport increased although domestic numbers were down slightly. We welcome Jetstar to our airport.

On 31 May the business and assets of Citibus Limited were sold to Invercargill Passenger Transport Limited. It was the directors' view that the capital employed in this business would serve the group better if it was placed elsewhere. Many of those Citibus staff members transferring to Invercargill Passenger Transport had served the company well over a long period and we would like to thank them again for their hard work and dedication to the company.

Total payments in cash to the Council this year were substantial at $23.2m and if we were to add up the total cash paid to the Council over the last five years we get a figure of $106.3m. During this period, which has been heavily impacted by the global financial crisis the hard work of all in the group grew revenues by 33.7% and generated a total of $168.8m in cash flows from the business before capital expenditure and dividends. After this strong cash flow generation a total of $179.5m was invested to further the capacity of the business to maintain a steady flow of cash to the Council. This has been a strong period of performance from a well-focused board, management and staff acting together for a common goal.