Eastland-Group AR2020 V2.Pdf
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page 421 EASTLAND GROUP ANNUAL REPORT 2020 Contents Eastland Group performance overview 03 Chair and chief executive's report 05 Financial performance trends 09 Company structure 10 Trust Tair¯awhiti 11 People and performance 13 Community engagement 15 Climate leaders 17 Eastland Generation 19 Eastland Network 27 Eastland Port 39 Gisborne Airport 51 Corporate governance 59 Board of directors 61 Senior leadership team 65 Financial statements F-1 Auditor's report F-2 Notes to the financial statements F-10 Company information F-45 EASTLAND GROUP ANNUAL REPORT 2020 page 2 2020 Eastland Group overview page 423 EASTLAND GROUP ANNUAL REPORT 2020 Returned a record $12.3 million to our shareholder Trust Taira¯whiti. $18.5 million in profit. $670.4 million asset value. 7.2% return on equity. Joined the Climate Leaders Coalition. Continued to explore sustainable energy generation options for Taira¯whiti. Received the Wellbeing Award at the Deloitte Energy Excellence Awards. Towards the end of the financial year, COVID-19 impacted all our businesses. While the airport was closed and the forestry sector had stopped shipping through the port, 2020 our diversified portfolio meant we continued to earn revenue from our generation and Eastland Group network sectors. As we went to print, the sectors have recovered overview more strongly than we had forecast but the future remains uncertain. Our returns to Trust Taira¯whiti will be used to support the region’s recovery efforts. EASTLAND GROUP ANNUAL REPORT 2020 page 4 Chair and chief executive report Matanuku Mahuika Matt Todd Chair Chief executive officer Each year in Eastland Group’s annual report we recap We continued to operate essential regional infrastructure our successes and challenges, including the financial prudently, safely and efficiently. returns from our activities, the growth of our assets, But in this summary of the 2020 financial year, we would and our contribution towards supporting te Taira¯whiti’s also like to reflect on the resilience that the company and economic development. our region have shown over the past few months. And This annual report reflects that. Overall, we’ve had another consider what it might mean for the future. positive year. We met our financial budgets and returned This resilience is, in part, the result of the company’s a record $12.3 million to Trust Taira¯whiti to support their strategy over the years to achieve industry as well as activities within te Taira¯whiti. geographic diversity. RETURNS MADE TO TRUST TAIRA¯WHITI (FORMERLY EASTLAND COMMUNITY TRUST) 14 12 10 8 6 $ Millions 4 2 0 2011 2017 2012 2015 2013 2018 2016 2019 2014 2010 2020 page 425 EASTLAND GROUP ANNUAL REPORT 2020 E nga mana, e nga reo, tena tatau katoa. Tangihia o tatau mate ka tika. Kotahi te korero ki a ratau; haere atu ra. Haere ki te tini me te mano ki te po. Haere ki te huinga o te kahurangi, ki reira oti atu ai. Ka hoki mai ki a tatau te hunga ora, nga iwi me nga hapori o te Tairawhiti whanui tonu, tena hoki tatau katoa. OPERATING THROUGH A GLOBAL PANDEMIC A SUSTAINABLE FUTURE Eastland Group’s year, until early February, was tracking At the end of the last calendar year, at our stakeholder largely as planned. Despite various challenges, all sectors function, we said that it feels like a transformational – Eastland Generation, Eastland Port and Eastland time for te Taira¯whiti. Despite the global and national Network - were performing at or close to forecasts. uncertainties around COVID-19, this still holds true. If anything, COVID-19 has confirmed the need to continue By the end of March it was a very different world. with transformation to build further regional resilience. New Zealand was in lockdown. Working closely with stakeholders and the wider The port remained open for the small number of kiwifruit community, we all have the opportunity to effect and squash ships that called during lockdown, but there significant, positive, inter-generational change. were no logging ships. The airport, midway through the build of the new terminal, was shut and scheduled flights The new airport terminal is a project that captures that stopped. Eastland Network put all planned maintenance shared vision and collaboration. It has been a privilege and upgrades on hold and focused on keeping the power to partner on the design with Ngai T¯awhiri, who have on for the community. mana whenua over this area. Along with investment from Eastland Group, the project has been co-funded by Trust Eastland Generation continued to operate, albeit with Taira¯whiti and the Provincial Growth Fund. stringent new health and safety protocols in place, and with lower power prices reflective of the reduced demand Eastland Port has continued to progress plans to during COVID-19 Alert Level 4. refurbish and future-proof its infrastructure, diversifying the products it services. This includes exploring the Most of us worked from home, with the essential workers opportunities offered by containerisation. The port still turning up on site. We took steps to make sure our has also completed its wharfside storage yard, which staff, customers and community were kept informed as is another positive step in the development of wharf the situation and requirements on our businesses evolved. operations and improved water quality. We’ve come out of the lockdown to a much changed In our generation sector, the Te Ahi O Maui geothermal global environment. However, to date, the circumstances power plant had its first full year of operation, affecting the company’s business units have been supplying clean, renewable energy to New Zealand. positive, with forestry up and running again and power Our involvement in electricity generation, distribution prices recovered. and retail (through our investment in Flick Electric Co.) A RESILIENT REGION continues to create challenges but also offers enormous potential. What the pandemic has shown us is that as a company, and as a region, we have proven to be remarkably resilient. The Eastland Network, Business Development and Energy Solutions teams are investigating all the ways Taira¯whiti business and community leaders, iwi and that Taira¯whiti might be powered in the future. This council representatives have provided a united, robust includes exploring the feasibility of a local waste to response to this sudden global crisis. While COVID-19 energy or co-generation power plant, large scale solar continues to rage around the world, so far New Zealand and wind generation. seems to be well placed to survive; hopefully, in time, to thrive again. We’ve joined the Climate Leaders Coalition and are working to measure and reduce our emissions. As a large Eastland Group’s diversified portfolio helped us weather organisation in Taira¯whiti, we hope to encourage other the storm and will play an active role in supporting the local businesses to step up and join our efforts against regional recovery. climate change. To support our businesses as they evolve, we have begun a vitally important project to implement new IT systems and processes. Known as “Project Highway”, this will 2011 enable us to be strategic and scalable for future growth. 2017 2012 2015 2013 2018 2016 2019 2014 2010 2020 EASTLAND GROUP ANNUAL REPORT 2020 page 6 FOCUS ON WELLBEING OUR PEOPLE There is a new, clearly defined focus on regional wellbeing, Eastland Network’s Brent Stewart stepped down after spearheaded by Trust Taira¯whiti. 17 years at the helm. We would like to thank him for his important and significant contributions to this company At Eastland Group we like to say we have a commercial and to the electricity industry as a whole. mind and a community heart. Our returns to Trust Taira¯whiti were a record $12.3 million this year alone, and have totalled Electric Village, our home of new energy, closed after three more than $128 million over the past 17 years. very successful years. Some of the many highlights included helping people better understand their power bills, offering Eastland Group will continue with a strong distribution home energy efficiency advice, engaging with students programme to Trust Taira¯whiti, to support the Trust’s on the possibilities of new energy technology and holding ongoing investments into regional wellbeing. electric vehicle test drives. Our thanks to both the Electric This model puts Taira¯whiti in a unique position to make Village team and to Trust Taira¯whiti for their support. meaningful progress, and it’s something that everyone In October we welcomed two new board members, who works for Eastland Group is incredibly proud of. Wendie Harvey and Jon Nichols. Eastland Group also supports wellbeing in other ways, In 2019 we lost our great friend and colleague, Grant such as the Mates of Taira¯whiti workplace suicide Donnell, who passed away suddenly. A big man with a big prevention programme. beard and an even bigger heart, he is deeply missed by all Our Mind Matters staff programme was recognised through who knew him. us winning the Wellbeing Award at the Deloitte Energy Finally, we would like to thank every single staff member Excellence Awards, which was a highlight of the year. for their hard work and adaptability during the past few months. It is great to see what a committed team we have. Matanuku Mahuika Matt Todd page 427 EASTLAND GROUP ANNUAL REPORT 2020 In late March, the Government announced a $23.8 million package to assist forestry workers displaced by COVID-19. The scope of the Taira¯whiti Economic Support Package Redeployment Programme was then broadened to include any workers in the region who had been affected by COVID-19. It encompasses five key projects and aims to provide work and training for several hundred people.