National Nati news / Politics / Business
Written by: Matanuku Mahuika (Ngati Porou Holding Company Chair)
17 Nov 2016

Tena koutou, otira tena tatau katoa.

Tena tatau o tatau tini mate, ratau kua wheturangitia, kua katohia i te ringa kaha o aitua. Na reira nga mate, haere, haere, haere atu ra. Haere atu ki te tini me te mano e whanga mai ana ma koutou ki nga marae maha ki te po. Ana, ka hoki mai ki a tatau te hunga ora. Tena koutou, tena koutou, tena ano tatau.


It has been another busy and productive year for Ngati Porou Holding Company Limited (NPHCL).

During the year a considerable amount of work has been put into the development of 5-year growth plans for the operating parts of NPHCL (Seafoods, Pakihiroa Farms, Forestry and Miere). This work is well advanced and we hope to have something to report in the new year.

On the equity investments front, we have not enjoyed the same good run that we had in 2015. Volatile world equity markets resulted in a year end loss of -$1.95 million to the portfolio. A significant factor in the year end position was the Brexit announcement in the days leading to balance date. This caused a sharp downturn in world markets and took us from a modest gain for the year to the reported loss.

With the equity investment portfolio, it is important to remember that we are taking a 5-year view when assessing returns and therefore performance. Just as we cautioned against reading too much into the good result we recorded in the 2015 year, we also should not read too much into the loss we have made this year, which is an unrealised loss on the value of our equity investments. Illustrating the short term volatility that can be expected with equity investments, markets recovered quickly during July (i.e. post balance date), recording a $3.8 million gain for that month.

The SIPO is based on a 5-year target rate of return of 2.5% over an assumed rate of inflation of 3%, or, to put it another way, a 2.5% real return. Despite the result this year, the investments are still returning at a rate above that target. Pleasingly, our carrying value of carbon credits has increased during 2016. The carrying value was $6.80/ NZU at 1 July 2015 and this increased to $17.85/ NZU at 30 June 2016, generating a $4.4 million profit.

Overall, the highlights for NPHCL in the last year are:

  • Group earnings of $6.5 million – down from $18.3 million in 2015, were driven by a combination of earnings from the fishing, forestry and farming parts of the business and a strong lift in the value of carbon units held by NPHCL.
  • Return on assets of 3.1%.
  • Group revenue for the year of $16.8 million, down from $24.8 million.
  • Growth of Group Total Assets of $2.2 million, from $208.7 million to $210.9 million.
  • Dividend of $3.0 million paid to Te Runanganui o Ngati Porou in October 2015 as the annual distribution.
  • Commitment to a special dividend of $0.5 million to support the development and implementation of a Ngati Porou Reo strategy (this dividend was not paid by balance date).
  • Continued work with subsidiary company boards and management teams and endorsing their respective strategic plans.
  • Planted a further 895 hectares of land returned by Ernslaw One from the Ruatoria and Tokomaru forests.
  • Formalised the Ngati Porou Miere Limited Partnership, with 5 land blocks and just under 3,000 hives.
  • Continued progress in identifying an investor to part fund the replant of the lands being returned by Ernslaw One and in assessing the viability of port or barging infrastructure in the north of Ngati Porou.
  • Continued to explore land use options that might be available within Ngati Porou.

Overall it has been a satisfactory year, especially considering the challenging international markets, which affect two thirds of the total assets under NPHCL’s management. However, there is still a lot of work to do.

The key for the 2017 year and beyond is to progress the work being done on the operating parts of the business and the key direct investment initiatives. Ultimately we need to generate stronger returns from those businesses to supplement our earnings from investments and increase both our profitability and spending power. It is also these businesses that can most directly affect economic growth opportunities for Ngati Porou.


The NPHCL was established in June 2012 to manage and oversee the financial and operational assets of Te Runanganui o Ngati Porou. The structure of NPHCL and its subsidiaries has not changed from the structure reported in previous annual reports and is set out below.


NPHCL has seen sound growth in its balance sheet since inception, as illustrated in the graphs and table below:

A summary of assets for NPHCL, along with its subsidiaries, and a comparison to the 2015 Group position is as follows:

Because intercompany eliminations are not shown, the columns do not add to the group total.

A breakdown of Group assets by asset class (and comparison to the 2015 year) is illustrated in the graphs below. A large proportion
of NPHCL’s activities centre on equities and fisheries, with an increasing holding in forestry assets.



A summary of earnings for NPHCL along with its subsidiaries is as follows:

Because intercompany eliminations are not shown, the columns do not add to the group total.

The above table and graph shows that the NPHCL Group had revenue of $16.8 million (includes extraordinaries), EBIT $6.9 million and earnings of $6.5 million.
NPHCL, the Parent’s financial performance was down by $10.6 million from its 2015 result, to record an EBIT of $6.0 million. As stated, this is largely driven by negative equity returns.
Ngati Porou Seafoods Group financial performance was down by $0.9 million from its 2015 result to record an EBIT of $1.1 million. Better performance from our farm division resulted in an EBIT of $0.7 million EBIT, up from $0.2 million from the previous year.
During the year, NPHCL has been working with its subsidiary companies to develop 5-year growth plans, which it is hoped will be reported on before the end of the current calendar year.


At 30 June 2016, the investments by asset class and fund manager and the returns generated, are as follows:

The table shows annualised returns at the end of 2016 of 5.8% since inception. The table also shows a comparison of annualised returns
at the end of 2015 since inception of 10%. This illustrates the adverse returns from equities in the 2016 year.


With the return of forest land from Ernslaw One and the requirement for NPHCL to replant that land, NPHCL is becoming a major forest owner in the region. NPHCL has contracted Ngati Porou Forests to manage its forest interests.

NPHCL is carrying $14.0 million of forestry assets (up from $12.9 million in 2015), comprising $11.5 million of forest land and $2.5 million of trees. During the year, Ernslaw One returned a total of 993 hectares of land from the Ruatoria and Tokomaru forests, which NPHCL planted at a total cost of $747,000. This brought the total area of forest NPHCL has planted to 3,146 hectares.

NPHCL is exploring possible joint venture partners to co-invest in the replant programme over the next 25 years. NPHCL is also exploring other opportunities to add value to its forestry investments and the East Coast forestry sector generally.


During the year NPHCL worked with Ngati Porou landowners to formally establish the Ngati Porou Miere Partnership Ltd. The purpose of the Partnership is to develop honey opportunities within Ngati Porou. This collective comprises 5 land owners as well as NPHCL. Together the members of the collective placed an aggregate of just under 3,000 hives on their land.

The collective contracted with beekeepers, using a standardised approach, with the aim of:

  • providing clarity regarding supply, access arrangements, and profit sharing;
  • giving the landowners the right to own and hold the honey from their land; and
  • requiring specific information from beekeepers and honey companies regarding production.

With the change in the contracting model promoted by the collective, combined with a good season, landowners in the collective saw their earnings increase from $133,000 during the 2013/14 season to $661,000 during the 2014/15 season. However, the 2015/16 season had poor yields and quality nationwide, but value was still added to members of the Ngati Porou Collective. For example, NPHCL’s $260,000 worth of honey produced during the 2014/15 season now has a registered valuation of $700,000. This increase is predominantly due to NPHCL owning the honey, storing it, and allowing the UMF values to grow over the course of the year.


As reported previously, the Board has developed direct investment criteria to be used as a guide when assessing direct investment opportunities, as follows:

  1. The investment meets or exceeds the rate of return thresholds established by the relevant SIPO investment category (Trans-Tasman Equities or, in some circumstances, Emerging Markets).
  2. It is an investment in an industry or activity that is important to the East Coast region.
  3. There will be benefits in addition to the projected financial returns to NPHCL (eg employment, further development of industries important to Ngati Porou).
  4. We have the required expertise available to effectively manage the investment.

During the 2016 year, NPHCL has partnered with its subsidiaries to investigate a number of investment opportunities. NPHCL has also investigated a number of direct investment opportunities across forestry, tourism, infrastructure and horticulture.

Kia ora,

Matanuku Mahuika
Ngati Porou Holding Company Ltd

To read the other reports from TRONPnui's 2016 Annual Report, as well as other supporting AGM material. Please click here.

Listen to Radio Ngati Porou's Hui A Tau interviews with TRONPnui representatives

TRONPnui representatives have been interviewed on RNP's Nga Take o te Wa current affairs show, in the lead up to the Hui a Tau. Radio Ngati Porou have made the interviews available on their SoundCloud account for those who were unable to listen to the live interviews.

Matanuku Mahuika ( Ngati Porou Holding Company Chair)