NIWA exceeds budget projections: meets science and financial targets

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The Crown-owned National Institute of Water and Atmospheric Research Ltd (NIWA) exceeded budget projections by recording a pre-tax profit of $5.29 million in the 1997-98 year to June 30.

"NIWA continues to operate very successfully, meeting both its science goals and its financial performance targets," he said.

Return on shareholder equity for NIWA as a whole was 9 percent and for NIWA Science rose to 11.18 percent when the company’s vessel owning subsidiary was separated.

"The lowered result against the previous year was a consequence of a further reduction in research contract work from the Ministry of Fisheries and a fall in vessel commercial revenue," Mr Sollitt said.

"This marks the third year that NIWA has been involved in fisheries stock assessment work, in which time we have retained a substantial share of the market for research in this area in a fully contestible environment.

"From a financial point of view NIWA has managed the reduction in revenue from this source by restructuring the research vessel operations in 1996 and by solid growth in the rest of the business."

The results show that NIWA has been able to fund its capital programme from strong cash flows.

Net profit after tax was $3.586 million ($4.208 million the previous year) and gross revenue from research activities and commercial contracts totalled $58.458 million ($58.921 million).

Shareholder’s funds were $41.656 million ($38.070 million) and assets totalled $52.214 million ($50.241 million). Term debt of $1.900 million was fully repaid.

Mr Sollitt said NIWA had outstanding success in the latest Public Good Science Fund bidding round and was now well set up with a range of new contracts, extending out as far as six years.

"We have maintained our levels of commercial consulting revenue, which we regard as a mark of the relevance of our PGSF funded work in environmental sciences. A wide range of customers throughout New Zealand depend on NIWA’s unique skills and knowledge and we have maintained our commitment to strategic capital expenditure to advance the boundaries of our science."

Mr Sollitt said it was the view of the board that if NIWA is to continue to succeed as an effective environmental science organisation it must succeed at the financial level.

"It is only through this that we are able to make the investments needed to advance our science and reward our people for their continued dedicated commitment."

Chief Executive Paul Hargreaves said the revenue shortfalls experienced during the year were more than compensated for by effective cost control throughout the company and strong emphasis on completing projects on time and within budget.

He said NIWA had maintained its commitment for the fourth successive year to invest significantly in strategic assets to advance its atmospheric and environmental sciences.

Among research items purchased were a seafloor camera and sledge to improve NIWA’s ability to describe and understand coastal and shelf ecosystems and equipment to better monitor and assess urban air quality, aquatic and marine sediments and atmospheric pressure, temperature, humidity and wind.

Mr Hargreaves said that at a time when companies are endlessly restructuring to achieve better performance, NIWA can claim that its original reorganisation in 1994, which saw the removal of internal divisions, had stood the test of four successive years.

"Our project-driven structure has helped us to deliver results consistently on time and on budget. Research strategies can be applied across the whole of the organisation, allowing different skills and knowledge to be brought together where needed. At the same time it has permitted a very flat management structure with minimal head office costs."

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