Airways meets Govt request for higher dividend

  • 01/09/2015
Airways meets Govt request for higher dividend

By Tina Morrison

Airways Corp of New Zealand, in charge of the nation's air traffic control, has met a government request for a higher dividend payment in its latest financial year and promised to increase it further this year.

State-Owned Enterprises Minister Todd McClay wrote to Airways chairwoman Susan Paterson in December 2014 outlining the Government's expectation of dividends, and noting that Airways had been paying a reduced dividend while it invested in a shift from radar to satellite-based navigation.

Airways paid a final dividend of $2 million for the financial year ended June 30, more than the year earlier $1M payment.

That takes the company's total dividend for the year to $4M, ahead of the previous year's $3M.

Ms Paterson says the dividend is forecast to increase further to $5M this year.

The dividends "are higher than the guidelines set out in Airways' dividend policy and reflect Airways' commitment to meeting the shareholder's expectations", she said.

The Government wants to take a more active management role in state-owned commercial assets so as to avoid another rapid deterioration such as witnessed by coal miner Solid Energy.

Treasury is taking a more rigorous approach when assessing the entities, and has earmarked a strategic review of Airways for 2015/16, following reviews of Landcorp, KiwiRail and New Zealand Post in recent times as part of a shift to improve its advice on running the Government's commercial operations.

Landcorp, the state-owned farmer, has come under increased government scrutiny after it failed to pay a dividend this year as it increases debt to fund dairy conversions during a period of slumping milk prices.

Airways posted a 28 percent gain in net profit to $15.1M in the past financial year as revenue rose 2.8 percent to $186.3M.

Chief executive Ed Sims attributed the improvement to cost control and a 2.3 percent increase in aviation volumes.