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2017 Annual Report and Accounts

15/12/2017
The earthquake of 14 November 2016 had a major impact on Yealands Wine Group (YWG) with significant tank damage and wine loss. YWG was insured but the insurance payments were not finalised prior to 30 June.
 
The YWG accounts to 30 June include the costs of the wine loss and remedial work, but do not include the insurance proceeds. Even though large progress payments have been received the insurance proceeds will be included in the accounts for the current year.
 
As a consequence YWG accounts depicted a net tax loss of $7.2m for the year ended 30 June 2017.

YWG assets were revalued by a Registered Valuer during the year which resulted in a $70.1m uplift in the value of YWG. This resulted in YWG recording a total comprehensive profit for the year of $53.2m.
 
YWG has paid a dividend of $5.5m.

Because Marlborough Lines owns 86% of YWG, its financial performance is reflected in Marlborough Lines’ accounts. Marlborough Lines Group recorded an overall loss of $1.5m to 30 June as a consequence of the accounting treatment required under the rules we report under.
 
Backing out the after-tax impacts of one off adjustments resulted in Marlborough Lines having a net profit after tax of $11.6m.

During the year Marlborough Lines has paid discounts of $9.38m including GST to consumers with a typical domestic consumer receiving $226. Since 1999 Marlborough Lines has paid out $106.6m in consumer discounts.

Marlborough Lines also paid a dividend to the Marlborough Electric Power Trust to enable it to provide a distribution to consumers and this will be paid early next year.
 
The Company’s investment in Nelson Electricity continued to perform in accord with expectations and Marlborough Lines has funds on deposit pending further investment.
 
Marlborough Lines’ Network reliability suffered significantly as a consequence of the November earthquake with unplanned outages of 303 minutes being approximately five times that of the previous year.

The earthquake itself also resulted in increased maintenance costs and our capital expenditure programme was affected by staff being diverted to remedial work subsequent to the earthquake.
 
Overall Marlborough Lines has a quality Network and unlike some other network companies is not facing significant expenditure as a consequence of deferred capital and maintenance expenditure.
 
Marlborough Lines is in a strong position going forward. It has quality assets, sound investments, and a solid financial base which will enable it to further improve its performance for the benefit of electricity consumers and its shareholder the Marlborough Electric Power Trust.

Ends.

For further information contact David Dew, Chairman or Ken Forrest, Managing Director, ph. 5777 007.

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