Annual Report 2010 - Christchurch City Council

p272. Annual Report
Christchurch Otautahi
2010
Group structure
Selwyn Plantation
Board Ltd
Individual organisation descriptions
Selwyn Plantation Board Ltd
This company is engaged in forestry and farming activities, and
is jointly owned by Selwyn District Council (61.7 per cent) and
Christchurch City Holdings Limited (39.3 per cent). Land area is
14,058 ha.
At the beginning of the financial year the shareholders approved
a plan to sell all of the company’s assets in an orderly manner and
return the proceeds to shareholders. This process commenced in
the 2010 year.
Harvested log volumes were ahead of budget at year end with
several factors contributing to this position. Some volume was
uncut last year and was carried over into this year, and greater than
predicted log volume recovery from some harvesting sites was also
achieved. Additional volume was produced from the introduction
of production thinning from selected stands in Bottle Lake and
Dalethorpe forests.
Farming operations during the year were difficult as production
gains slowed due to prolonged dry periods which severely
restricted pasture establishment and growth off all the
non-irrigated areas. Farm land sales were a predominant activity
during the year as the decision to divest the farming operations was
initiated.
Farming operations have progressively scaled down as land sales
have reduced the available farming areas. The remaining farm
areas continue to be farmed and managed effectively through the
sale process, although forward planning considerations are now
all based on expected short term tenure through to the final asset
realisation.
The 2010 result was significantly impacted by a $9.1 million
reduction in farm land properties, whereas the 2009 result included
a $9.0 million forest revaluation increase. There were various other
revaluation movements, fair value adjustments and movements in
provisions.
Nature and scope of activities
The core business of the company is (a) to manage its forests
and lands on a commercial basis using environmentally and
commercially sustainable methods, and (b) to convert plains and
forests to higher value alternate uses.
Policies and objectives relating to ownership and control
The Council, through CCHL, has a minority interest in this
company and holds it for investment purposes. It does not regard it
as a strategic asset.
Key performance targets
2010 2010
Actual
Target
Harvesting (tonnes) 176,231 150,000
Thinning (hectares) 393 200
Financial summary
Statement of financial performance for the year ended 30 June 2010 2010 2009
Actual Actual
$000s $000s
Operating revenue 20,473 21,499
Operating and other expenses 21,672 15,545
Operating profit (loss) before tax (1,199) 5,954
Tax expense (benefit) 1,394 165
Net profit (loss) for the year (2,593) 5,789