TRONP enjoys strong financial performance

Busy year, loss follows AGM

Busy year, loss follows AGM

File picture

A GOOD return on assets and a tightening of the belt have contributed to steady gains in the financial performance of Te Runanganui o Ngati Porou over the past year.

TRONPnui’s commercial arm Ngati Porou Holding Company produced a net profit of $15.3 million for the 2016/2017 year, which represented a return on assets of 7.4 percent and came off revenue of $31m, up from $16.7m a year earlier.

Ngati Porou Holding Company paid dividends of $7.4m to the overarching TRONPnui group. This included a special dividend of $900,000 and the early payment of the 2017/18 dividend of $3.1m.

Ngati Porou Holding Company chairman Matanuku Mahuika said this was a great improvement on the previous year.

“This represented a significant uplift from 2015/2016, where the company experienced a lot of challenges, particularly with its investments, on the back of a lot of uncertainty in world markets,” he said.

“This year equity markets have been strong and that is reflected in the performance of the company.”

TRONPnui chief executive Herewini Te Koha said there had been a “concerted drive” to achieve reductions in the overall cost of operations across TRONPnui and its subsidiaries.

By comparison to 2015/2016, the operating costs and operating deficit for this year had reduced by $1.7m.

“Our operating deficits sat at around $6m in 2015/2016, and are down to $4.3m for 2017,” Mr Te Koha said.

“Our challenge is to move from those operating deficit figures and be into surplus within the next 18 to 24 months.”

Reduced debt

TRONPnui has reduced its bank debt levels over the past year.

In October 2015, the overarching TRONPnui group had bank debt of $10.6m. This is now down to $9.3m.

“We’re heading in the right direction but there is a lot of work to be done to keep chipping away at the level of debt and to strengthen the overall financial base of the parent (TRONPnui) and its operations,” Mr Te Koha said.

More cost-cutting was planned for the current year through to 2018.

“I have an operational target to further reduce costs by at least another $1m and further retire bank debt along the way,” he said.

“At this stage I’m fairly confident that we’re on track to do that and to be into operating surpluses by 2019.”

However, those reductions could not be achieved without impacting somewhere else within the operation, he said.

“Staffing cuts are not easy to propose and harder still to implement, when the affected people have worked hard for our organisation and for Ngati Porou.

“I want to acknowledge the TRONPnui staff for their understanding and commitment as I work through staffing and cost reductions.”

This is also the first year that TRONPnui has not provided financial assistance to its subsidiary Ngati Porou Hauora, the primary health care service provider on the East Coast.

“The real impact of that was felt in January with the loss by fire of the Tikitiki clinic and the health services based there,” he said.

“In previous years, we probably would have moved fairly quickly to open up a line of credit for Ngati Porou Hauora to resume a clinic and services at Tikitiki.

“This year, however, given the cost reductions we’re pursuing, and that we’re reducing, not growing, bank debt, we’ve had to do the hard yards and the Tikitiki and Rangitukia communities have had to endure service arrangements at Ruatoria and Te Araroa instead of a replacement of the Tikitiki clinic.

“There are real and practical costs and consequences that come from our stronger financial discipline, and our targets to reduce our debt and spending.

“We’re under no illusion about the real cost of those measures as we go through, but we do think it’s in the long-term interests of the runanganui group and its performance for Ngati Porou to be operating from a stronger financial base across all parts of the group.”

Budget surplus

Ngati Porou Hauora also achieved a budget surplus.

The cultural development subsidiary of the group, Toitu Ngati Porou, also operated at a reduced budget.

Chairman Selwyn Parata said TRONPnui needed good support from its subsidiaries to maintain its operations.

“TRONPnui subsidiaries have rolled their sleeves up to help.”

Despite not replacing the Tikitiki clinic, providing a good health service to the people would always be a focus of the governing board, said Mr Parata.

“We need accessible, affordable, quality health and social services. Recognising our small population and rural isolation makes this a challenge,” he said.

“We need to consider new models of care, set aside what was appropriate in the past, and embrace new approaches and innovation in technology.”

Mr Parata said while there had been challenges, optimism still abounded for the growth and wellbeing of Ngati Porou.

“Foundations are in place and the work is being done by TRONPnui to achieve real gains for Ngati Porou.

“Our challenge is achieving a balanced score card that results in the cultural and social wellbeing, and prosperity of our whanau, the responsible utilisation of our natural resources, and the sustained profitability and productivity of the TRONPnui group.”

A GOOD return on assets and a tightening of the belt have contributed to steady gains in the financial performance of Te Runanganui o Ngati Porou over the past year.

TRONPnui’s commercial arm Ngati Porou Holding Company produced a net profit of $15.3 million for the 2016/2017 year, which represented a return on assets of 7.4 percent and came off revenue of $31m, up from $16.7m a year earlier.

Ngati Porou Holding Company paid dividends of $7.4m to the overarching TRONPnui group. This included a special dividend of $900,000 and the early payment of the 2017/18 dividend of $3.1m.

Ngati Porou Holding Company chairman Matanuku Mahuika said this was a great improvement on the previous year.

“This represented a significant uplift from 2015/2016, where the company experienced a lot of challenges, particularly with its investments, on the back of a lot of uncertainty in world markets,” he said.

“This year equity markets have been strong and that is reflected in the performance of the company.”

TRONPnui chief executive Herewini Te Koha said there had been a “concerted drive” to achieve reductions in the overall cost of operations across TRONPnui and its subsidiaries.

By comparison to 2015/2016, the operating costs and operating deficit for this year had reduced by $1.7m.

“Our operating deficits sat at around $6m in 2015/2016, and are down to $4.3m for 2017,” Mr Te Koha said.

“Our challenge is to move from those operating deficit figures and be into surplus within the next 18 to 24 months.”

Reduced debt

TRONPnui has reduced its bank debt levels over the past year.

In October 2015, the overarching TRONPnui group had bank debt of $10.6m. This is now down to $9.3m.

“We’re heading in the right direction but there is a lot of work to be done to keep chipping away at the level of debt and to strengthen the overall financial base of the parent (TRONPnui) and its operations,” Mr Te Koha said.

More cost-cutting was planned for the current year through to 2018.

“I have an operational target to further reduce costs by at least another $1m and further retire bank debt along the way,” he said.

“At this stage I’m fairly confident that we’re on track to do that and to be into operating surpluses by 2019.”

However, those reductions could not be achieved without impacting somewhere else within the operation, he said.

“Staffing cuts are not easy to propose and harder still to implement, when the affected people have worked hard for our organisation and for Ngati Porou.

“I want to acknowledge the TRONPnui staff for their understanding and commitment as I work through staffing and cost reductions.”

This is also the first year that TRONPnui has not provided financial assistance to its subsidiary Ngati Porou Hauora, the primary health care service provider on the East Coast.

“The real impact of that was felt in January with the loss by fire of the Tikitiki clinic and the health services based there,” he said.

“In previous years, we probably would have moved fairly quickly to open up a line of credit for Ngati Porou Hauora to resume a clinic and services at Tikitiki.

“This year, however, given the cost reductions we’re pursuing, and that we’re reducing, not growing, bank debt, we’ve had to do the hard yards and the Tikitiki and Rangitukia communities have had to endure service arrangements at Ruatoria and Te Araroa instead of a replacement of the Tikitiki clinic.

“There are real and practical costs and consequences that come from our stronger financial discipline, and our targets to reduce our debt and spending.

“We’re under no illusion about the real cost of those measures as we go through, but we do think it’s in the long-term interests of the runanganui group and its performance for Ngati Porou to be operating from a stronger financial base across all parts of the group.”

Budget surplus

Ngati Porou Hauora also achieved a budget surplus.

The cultural development subsidiary of the group, Toitu Ngati Porou, also operated at a reduced budget.

Chairman Selwyn Parata said TRONPnui needed good support from its subsidiaries to maintain its operations.

“TRONPnui subsidiaries have rolled their sleeves up to help.”

Despite not replacing the Tikitiki clinic, providing a good health service to the people would always be a focus of the governing board, said Mr Parata.

“We need accessible, affordable, quality health and social services. Recognising our small population and rural isolation makes this a challenge,” he said.

“We need to consider new models of care, set aside what was appropriate in the past, and embrace new approaches and innovation in technology.”

Mr Parata said while there had been challenges, optimism still abounded for the growth and wellbeing of Ngati Porou.

“Foundations are in place and the work is being done by TRONPnui to achieve real gains for Ngati Porou.

“Our challenge is achieving a balanced score card that results in the cultural and social wellbeing, and prosperity of our whanau, the responsible utilisation of our natural resources, and the sustained profitability and productivity of the TRONPnui group.”

Te Runanganui o Ngati Porou was involved in some major exercises and came across challenges in the build-up to its annual general meeting held at Hauiti Marae in Tolaga Bay recently.

However, that was all put in perspective only a day after the meeting when one of TRONPnui’s directors, Heni Tawhiwhirangi, passed away suddenly.

Ms Tawhiwhirangi was involved in establishing the original representative body, Te Runanga o Ngati Porou, in her role as chief executive during the early days of the organisation.

She helped to set up Ngati Porou Hauora and was a driver in the recent review of the TRONPnui trust deed.

TRONPnui carried out a series of consultation hui within the iwi as part of the deed review process.

Some of the feedback from the review proposed changes to the representative model, as well as more open communication from the board.

The trust deed review was just one of two major engagement exercises carried out by TRONPnui in the past year.

The other major exercise was ratification of the new foreshore and seabed deed of arrangement.

This work culminated in 47 hapu formally ratifying the new foreshore and seabed deed, including two hapu that stood apart from the original deed in 2008.
Eight hapu are still to make their decision on the new deed, while two hapu chose not to ratify.
TRONPnui also put a ‘‘marine customary title’’ application to the High Court before the statutory deadline expired in April.
The application is a backstop for the ratifying hapu until the legislation for the new deed is passed and hapu customary title claims are dealt with under that Act.
Getting the new legislation passed will be one of TRONPnui’s highest priorities in 2018.

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