Auckland Council. Investor update. Suzanne Tindal, John Bishop and Andrew John. 15 October 2015

Transcription

1 Auckland Council Investor update Suzanne Tindal, John Bishop and Andrew John 15 October 2015

2 Important disclaimer The information in this presentation has been prepared by Auckland Council for general information purposes only. By listening to or reading this presentation, you acknowledge and agree to the contents of this disclaimer. Auckland Council makes no representation or warranty as to the accuracy, adequacy reliability, completeness or currency of any statements, estimates or opinions or other information contained in this presentation. This presentation has been prepared in good faith but has not been independently verified. This presentation may contain forward-looking information including estimates, forecasts and projections. This forward-looking information speaks only as of the date of this presentation and is based on assumptions which may or may not prove to be correct. No express or implied representations or warranties are, or will be, made by Auckland Council or any other person as to the accuracy or completeness of this forward-looking information or the reasonableness of any assumptions that underpin it. The forward-looking information involves known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by this forward-looking information. Any opinions expressed in this presentation reflect the judgement of Auckland Council as the date hereof, and do not bind Auckland Council. This presentation does not, and is not intended to, constitute an offer, invitation or recommendation by Auckland Council to any person to subscribe for, purchase or otherwise deal in any financial products. Any person considering investing in a financial product offered by Auckland Council must refer to the relevant offer document that has been expressly issued by Auckland Council for that purpose and the disclosures provided expressly in connection with those financial products and should take their own independent financial and legal advice on their proposed investment. This presentation is proprietary to Auckland Council and may not be copied, distributed, disclosed or used without Auckland Council's express written consent. 2

3 Contents Summary and highlights 4 Influences on Auckland Council 7 Financial results 11 Debt market activity and funding approach 21 Summary and contact details 29 3

4 Summary Auckland is New Zealand s largest and fastest growing city with 1.5 million people. Population expected to increase by 700,000 by 2043 (representing 40% of New Zealand s population) Long-term credit rating AA by S&P and Aa2 by Moody s Rating is supported by the strong governance framework, flexible and broad powers to set rates, and strong, diversified economy Lenders have a charge over current and future rates income, rates rank above all claimants Annually balance operating expenditure with operating income Total assets of NZ$42.1 billion; total debt NZ$7.3 billion Strong operational cash flow as depreciation cash funded Debt only used to fund new assets 4

5 Highlights 5

6 Highlights Public transport use exceeds targets with rail patronage alone growing by 22 per cent NZ$582 million invested in our electric trains and depot, delivering more services and greater capacity Major hosting Volvo Ocean Race stopover ICC Cricket World Cup 2015 FIFA U-20 World Cup 2015 Special housing areas to accelerate house building across Auckland Playing capacity increased with 15 sports fields lit and another 15 with new sand fields New libraries in Te Atutu, Ranui, Waiheke and Devonport and refurbished in Takapuna and Pukekohe 6

7 Influences on Auckland Council 7

8 Current influences on Auckland Council Growing population - 45,000 (3%) in last year and over 100,000 in last 5 years Infrastructure demands (roading and public transport) Housing Need for collaboration with central government Adoption of new 10-year Long-term plan Focus on efficiency and balance sheet effectiveness Refreshed and strengthened executive team Local government election in

9 Long-term plan operating expenditure by type 9

10 NZ$ millions Long-term plan borrowings and assets 70,000 60,000 50,000 40,000 30,000 20,000 10, / / / / / / / / / /25 Debt Assets 10

11 Financial results 11

12 Annual revenue 12

13 NZ$ million Revenue mix 4,000 Total revenue 3,500 3,000 2,500 2,000 1,500 1, Rates Non-rates 13

14 Statement of comprehensive income NZ$ million Actual year to 30 June 15 Actual year to 30 June 14 Actual year to 30 June 13 Actual year to 30 June 12 Revenue Rates 1,458 1,395 1,337 1,373 Other revenue 2,100 1,888 1,725 1,442 Total revenue excluding gains 3,558 3,283 3,062 2,815 Expenditure Operating expenses 2,278 2,024 1,990 2,061 Depreciation and amortisation Finance costs Total expenditure excluding losses 3,478 3,133 2,998 2,976 Operating surplus/(deficit) before gains and losses (161) Net other (losses)/gains (176) (78) (Deficit)/Surplus before income tax (96) (239) 14

15 Statement of financial position NZ$ million Actual as at 30 June 15 Actual as at 30 June 14 Actual as at 30 June 13 Actual as at 30 June 12 Cash Property plant and equipment 38,897 36,906 34,212 33,276 Investments 1,450 1,303 1,174 1,092 Other assets 1,475 1,459 1,333 1,132 Total assets 42,167 39,874 37,055 35,712 Other liabilities 2,754 2,388 2,343 2,417 Total borrowings 7,334 6,341 5,884 5,032 Total liabilities 10,088 8,729 8,227 7,449 Net assets 32,079 31,145 28,828 28,263 Total equity 32,079 31,145 28,828 28,263 Debt to total assets ratio 17% 16% 16% 14% 15

16 Funding approach General preference for long dated debt Diversity is important domestic, Local Government Funding Agency and offshore Spread of debt maturities Set monthly targets against NZ$ benchmark (BKBM) Open to multi-currency private placement opportunities 16

17 Group Debt relative to assets and revenue Debt is currently NZ$7.3 billion Prudent relative to annual revenue of NZ$3.6 billion and total assets of NZ$42.2 billion Current annual finance cost is NZ$422 million NZ$337 million of cash and cash equivalents at balance date Net debt of NZ$7 billion 17

18 Statement of cash flows NZ$ million Actual year to 30 June 15 Actual year to 30 June 14 Actual year to 30 June 13 Actual year to 30 June 12 Net cash from operating activities Net cash from investing activities (1,445) (1,540) (1,302) (1,192) Net cash from financing activities Net increase/(decrease) in cash 135 (131)

19 Capital expenditure 19

20 Capital expenditure by type Invested in the following major capital projects in 2014/15 year: Roads and footpath renewals and construction NZ$350 million New electric trains and depot NZ$204 million Water and wastewater upgrades NZ$153 million Local and regional parks NZ$133 million Stormwater and flood protection NZ$97 million Auckland City Rail Link NZ$92 million Hunua No 4 water supply NZ$61 million. 20

21 Debt market activity and funding approach 21

22 Debt portfolio at 30 June offshore transactions - (A$, EUR, NOK and CHF) Average term 8.3 years Backed by NZ$800 million standby facility 22

23 NZ$ millions Long-term group debt maturity profile Financial Year (to 30 June) 23

24 Credit ratings and security Security Lenders have a charge over current and future rates income Rates rank ahead of all other claimants on property Lenders have benefit of Debenture Trust Deed Government has the ability to appoint Commissioner and to levy special rate Credit Ratings Standard and Poor s: AA (Stable Outlook) Moody s: Aa2 (Stable Outlook) 24

25 What underpins the strong credit rating Strong legislative and governance framework Flexible and broad powers to rate Prudential borrowing limits Policy limit Actual as at 30 June 2015 Strong and diversified economy Prudent financial management Superior risk profile compared to other local government entities Net debt to total revenue <275% 192% Net interest to total revenue <15% 12% Net interest to total rates <25% 21% Liquidity (6 months) >100% 185% 25

26 NZ$ millions Forecast borrowing 1,600 1, New debt Refinancing 26

27 NZ$ millions Forecast debt level 14,000 12,000 10,000 8,000 6,000 4,000 2, LTP LTP

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29 Contact details Group Chief Financial Officer Suzanne Tindal Tel: sue.tindal@aucklandcouncil.govt.nz Treasurer John Bishop Tel: john.bishop@aucklandcouncil.govt.nz Funding Manager Andrew John Tel: andrew.john@aucklandcouncil.govt.nz 29

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