Testing year but progress noted

Regional infrastructure company Eastland Group has weathered one of the most testing years in the company’s history, and goes into the second half of 2023 with a fresh strategic focus and ambitious plans for growth.

“It’s been an incredibly tough year for everyone here in Tairāwhiti, and Eastland Group is no exception,” said chief executive Matt Todd.

“Multiple severe weather events, the lingering effects of the Covid pandemic, disruptions to the global supply chain and other operational challenges all meant that the company’s underlying results were considerably impacted.

“On the upside, our long-term planning is bearing positive results. After two decades of expansion, investing in regional infrastructure and delivering value for our shareholder, we are taking steps to reposition the company in preparation for future opportunities.”

One of the most significant decisions was the sale of Eastland Network to Firstgas Group, owned by Igneo Infrastructure Partners, on March 31, 2023.

“The sale process had been more than 18 months in the planning, well before the challenges of the last year hit,” said Mr Todd.

“The sale proceeds received were $257.7 million, above the asset book value of Eastland Network, which was $190 million as at March 31,  2023.”

Eastland Group posted a $92.8 million profit for FY 2023 which reflects the sale of Eastland Network.

The group paid a special dividend of $50 million to shareholder Trust Tairāwhiti, along with repaying $30 million of capital notes. In total, Eastland Group made distributions and repayments to the trust of $90 million.

“It was an excellent outcome,” said Mr Todd.

“We have paid down debt and committed to new renewable energy projects, while releasing a big chunk of equity to the trust for the benefit of current and future generations in Tairāwhiti.

“The Eastland Network day-to-day operations are still based here, and regulations mean that there are ongoing protections for local consumers around price and quality of supply.”

Eastland Network, along with Eastland Group’s other lifeline assets, played integral roles in regional recovery during the aftermath of Cyclone Gabrielle, which battered the region in February. The network team and contractors restored power across thousands of square kilometres in extremely difficult conditions.

Gisborne Airport provided an essential hub for supplies and personnel.

Eastland Port stood up an emergency coastal shipping service while the road to Napier was closed. This was made possible with a $500,000 grant from the Government, along with a $2.25m underwrite for the charter of the Rangitata for three months. The temporary service completed 18 voyages that moved nearly 300 containers for local businesses.

The port continued to contribute to the region’s economic resilience, exporting 2.4 million tonnes of logs and supporting the return of a successful cruise ship season.

“The Wharf 7 redevelopment is progressing smoothly,” said Mr Todd.

“We have also submitted the consent application for Stage 2 of the Twin Berth project, which is another key step towards permanently establishing containerisation and future-proofing the Port.”

Gisborne Airport was open for business throughout the year, welcoming over 210,000 passengers — a new record. Eastland Generation’s three geothermal power plants and hydro scheme generated a total of 416.6 GWh of renewable energy in the 2023 financial year.

Construction on Tairāwhiti’s first utility scale solar farm — and, for the moment, New Zealand’s biggest, at 5.2MW — started at Gisborne Airport. Te Ihi o re Ra will be completed in September.

“In July 2023, we announced a capital raise to fund growth for the generation business, where we have a substantial, well-progressed pipeline of renewable generation projects,” said Mr Todd.

“Local opportunities include two further solar plants, with sites secured in Uawa and Wairoa.

“We also confirmed the development of our TOPP2 project, a 49MW geothermal power station in Kawerau. Trust Tairāwhiti will provide a short-term investment of $30 million to support the land enabling works for the plant.” The 35MW Taheke Geothermal Project, a partnership between Eastland Generation and The Proprietors of Taheke 8C & Adjoining Blocks Incorporation (Taheke 8C), reached a major milestone.

The Minister for the Environment accepted the project’s resource consent application under the Covid-19 Recovery Fast Track Consenting provisions, and the application has been referred to an expert panel to consider.

“Combined, these projects will add real scale to Eastland Generation’s portfolio and position us as a significant developer, owner and operator of renewable energy in the New Zealand market.”

Eastland Group is measuring its emissions and working on delivering its sustainability action plan, as part of its commitment to the Climate Leaders Coalition. With the sale of the network, and the evolving needs of Port and Generation, in 2023 Eastland Group restructured their business. This resulted in a number of roles being disestablished, and new ones created. A new operating model was introduced, with Eastland Group becoming primarily an investment holding company.

“When Eastland Group began in 2003 we had assets worth $100 million and equity of $49 million,” said Mr Todd. “This has grown sevenfold and today we have $744 million of assets with $387 million of equity.

“Over the last 20 years, we have used that $49m of equity and $549 million of shareholder value has been created and we’ve distributed $211 million to Trust Tairāwhiti.

“These results are a testament, most of all, to the exceptional work of our staff. Together with the board and the executive leadership team, I would like to thank and acknowledge each and every one of our team for their professionalism and dedication during a very demanding 12 months.”

Trust played key role in cyclone recovery

Trust Tairawhiti, the community trust that owns Eastland Group also has its annual report out.

The report outlines the trust’s key activities over the year and showcases the work of funding recipients, including Huringa Pai, Swim for Life Tairāwhiti and the Gisborne Boardriders’ Club.

This year marked the 30th anniversary of the trust’s formation, initially known as the Eastland Energy Community Trust. It has evolved over the decades and is now the regional Economic Development Agency (EDA) and Regional Tourism Organisation (RTO).

As the EDA, the trust is committed to supporting the region’s businesses and industries to thrive. Over the year, it supported over 150 businesses through the Government’s Regional Business Partner Network and Callaghan Innovation. The trust also partnered with the Ministry of Business, Innovation and Employment to deliver the Digital Boost pilot initiative in Tairāwhiti.

Following Cyclone Gabrielle, the trust had a key role in leading the immediate business response and supporting the regional economic recovery. The initial priority was establishing a business hub, which enabled more than 300 businesses to pay staff and access support from Government agencies while connectivity was down.

It was one of seven agencies tasked with delivering the Government’s business recovery package to flood-affected regions around the North Island. Over eight weeks, the trust distributed $16.32 million to 730 local businesses to help them get back up and running.

After the cyclone, the trust board agreed to make just over $370,000 available for an immediate community relief fund. It partnered with the Department of Internal Affairs on the initiative, as well as The Gift Trust and the Clare Foundation, and supported various community groups with quick turnaround grants to help recovery efforts.

The trust distributed over $4.39 million to 68 community groups over the year for projects and initiatives supporting regional wellbeing.

“In line with our wellbeing framework, we continue to measure the impact of trust investments,” a statement said.

“Our successful roll-out of the Tairāwhiti Wellbeing Survey supported this work. The survey aims to improve our local data and better understand the wellbeing of our people. More than 1000 people across the rohe responded to the survey, and we now have baseline data publicly available online.

“Following the successful conclusion of the Eastland Network sale, the $80 million returned to the trust has been invested to ensure immediate, ongoing returns and a diverse portfolio. Through our strategic review process, we’re working to balance the amount invested for the long-term and what is available now.”

Trust chairman John Clarke acknowledged Gavin Murphy, who stepped down from his role as chief executive in June, as well as retired trustees Dr Jill Chrisp and Kristen Kohere-Soutar.

“Gavin guided the trust through the amalgamation of the EDA, RTO and subsequent rebrand to Trust Tairāwhiti, as well as the introduction of He Rangitapu He Tohu Ora.

“Jill has been a trustee for six years and had an important role as chair of our people and culture committee. She has brought many skills to the board table, drawing on her background in social science and strategic leadership. Kristen has been a passionate trustee with a strategic approach to challenging the status quo and ensuring the trust responds to the community’s needs. Her financial nous and extensive governance experience have been invaluable to trust deliberations.

“We also acknowledge the passing of Michael Chrisp, who drew up the original Trust Deed in 1993. It was a visionary and forward-thinking document, with flexibility that allowed the trust to grow and build a fund that enabled today’s trustees to invest across Tairāwhiti. That same careful stewardship in the future will ensure Michael’s foresight and legacy will endure.”

The 2022/23 Annual Report is available on the trust website, and hard copies can be collected from the Trust offices.

The AGM will be held at Waikanae Surf Club and live streamed from 5.30pm on Monday, August 10.