Aurora Energy's Annual Report is out (and it's a shocker)

Friday, 27 September 2019

Aurora Energy's Annual Report is out (and it's a shocker)

Richard Healey

12 hrs

Aurora Energy's Annual Report is out.
Bet not many people out there can say this! I work for a company that just made a record loss - and breached Commerce Commision performance criteria by 300% - but our remuneration increased, on average, by 18.8% for the year!! Glad someone's doing well out of this trainwreck.
If you work for Aurora and didn't get an 18% pay rise you might be interested in this:
Although staff numbers only increased by 2 (to 137 )this year, 48 of you earned over $100,000. Richard Fletcher was rewarded to the tune of $510,000 for steering the company to a record breaking operating loss that was only matched by equally stunning outage figures . Total increase in staff remuneration was close to $2,200,000 - not bad split 137 ways.

I guess that puts you in the $300,000 bracket Glen Coates, congrats. At a time when reliability should be improving, because of the large renewal program, it is actually heading down the toilet. Unplanned outages alone this year were higher than ALL outages in years 2015 and 2017. Outage minutes exceded the Commerce Commision limits by close to 300%! That's going to look good on your CV.
It won't surprise you to find that Aurora is now one of the least reliable networks in New Zealand and has (once again) exceeded the reliability limits set by the commerce commision by a huge margin. They however pat themselves on the back for "achieving" the target that they set for themselves - while at the same time storing away $5,000,000 in anticipation of the fine they will be shortly paying as a result of their appalling performance!!
Wait for the next installment: How to turn a hundred years of profit into a multi-million dollar loss overnight.
You can read the whole sad saga for yourself here:
https://1drv.ms/b/s!AlwusqX1G1GsunhKKmJ2ZSerkL9J?e=iUHEsr

Comments

Pete Pete Rhodes Our forefathers would be turning in their grave - and yet train crash still is allowed to carry on with no accountability

Richard Healey Pete Pete Rhodes like me you will remember when the network had some of the best reliability figures not only in New Zealand, but in the world. How in hell do you spend hundreds of millions of dollars on renewal and consistently INCREASE unplanned outage minutes?

d
John Evans Owned by the ratepayers of Dunedin. Run by the appointees of the past council. Dunedins greatest financial disaster ever unravelling. What should have been a huge city asset, ruined by poor weak management and strident demands of the current and former councillors and Mayor to continue to forgo maintenance to pay down debt of the spendthrift council.

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Richard Healey John Evans in a nutshell - yes.

Alan Garrick Well done Cull and co!! Imagine what he could achieve in the DHB......they already pretty advanced in spending and not delivering....watch this space?

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Richard Healey Alan Garrick don't. If i think about that I'll end up using psych services and with Cull in charge that's not going to end well..

Lindsay Harris The DCC Electricitu Department used to have a brilliant maintenance programme my Dad designed, built and maintained many of the substations in Dunedin the last being South City , and also ran the workshops ALL on paper. He also helped design the data logger systems and built two of the Waipori dams ....such a shame when he retired he was replaced by two blokes with computers..

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Dave Hanan It is really important to get greater control over this company as a Council. We need substantially better value for money and accountability from Aurora. Aurora should be stacked with engineering expertise and be way less corporate. The board (which has no engineering expertise) and the CEO needs to go. The result is a disgrace. The company needs a comprehensive overhaul.

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Richard Healey Dave Hanan amen

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Chris Sargent OMG.
Russell Garbutt None of this is a surprise of course. The company is filled with corporate speaking be-suited people who could well fit into the Fonterra model. From a good profit making entity staffed by good engineers it has become nothing other than what many see as a huge fraud. Just why Dunedin ratepayers have not taken more direct action to force accountability is a puzzle. From DCC Councillors acting as directors to employees who gouged the business, it seems amazing to me that the real shareholders - the ratepayers - have not gone down the path of demanding accountability. All that remains now is a mountain of debt and a network that is becoming less valuable as an asset. And therein lies a problem. Even though a lines company is virtually a money making machine, in this case I can't think of anyone that would buy this liability. And yet no ratepayer revolt - or even questions asked by the ODT.

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Richard Healey Russell, the comparison with Fonterra is very apt. Christine Garey, when questioned about Aurora's first ever in more than 100 years of trading loss, said - well what do you expect, they have the huge cost of a rebuild to cover. I'm afraid she clearly can't read a balance sheet.

They have been convering those costs since 2016 - without making a loss. In fact they did LESS work on rebuild last year than in any of the previous three and they UNDERSPENT the capex budget. The losses are OPERATIONAL losses, the rebuild is funded out of CAPITAL EXPENDITURE .

The losses are the result of massive overspend to run the company NOT to replace the asset. $5M of the overrun is to go towards fines. The action the commerce commission is taking against the company relates to their failure to meet reliability targets many years ago. They have consistently failed to meet those targets, by much greater margins, in every year since that first breach. Nothing has been set aside for those years - clearly the Commission have come to a cosy understanding with Aurora.

New in this year's accounts are a couple of million dollars in lease costs. Where did they come from? What do they relate to? There are a few things that have become apparent from these accounts.... watch this space.