MetOcean buy puts dent in MetService bottom line

Photo / NZME.

The Meteorological Service, the state-owned weather bureau, reported a 5.6 per cent drop in annual profit as a bigger tax bill and higher costs from its new acquisition muted earnings.

Profit fell to $2.6 million in the year to June 30, from $2.7 million a year earlier, according to Wellington-based MetService's annual report.

Sales rose 7.9 per cent to $45.6 million, its third-highest since becoming a state-owned enterprise in 1992. Profit before tax increased 13 per cent to $4.3 million.

In the financial year, the company spent $3 million on a 49 per cent stake in MetOcean Solutions, a New Zealand-based oceanographic business, to further its international commercial subsidiary MetraWeather, which provides weather content in a variety of mediums around the globe.

During the year it formalised its "weather as a service" unit and expanded its digital output, providing an online content, graphics and clips site for media outlets.

"To remain competitive, we will continue to focus on growth while responding to the rapidly evolving technological requirements of our customers," chairman Sarah Smith and chief executive Peter Lennox said in the report.

"Exporting meteorological expertise to the world under the MetraWeather brand enables us to maintain one of the best blue-chip client lists of any Kiwi company, thereby creating wealth for our stakeholders and ensuring a continuity of investment to keep New Zealanders safe."

Annual costs rose 7.6 per cent to $40.6 million as the firm spent more on staff and booked about $867,000 more in depreciation charges, largely on its software.

MetService reported a tax expense of $1.77 million, up from $1.02 million a year earlier. It has a dividend policy of paying 35 per cent of profit. In the 12 months to June 30 it paid the Government $2.28 million, or 45c a share, in dividends relating to the previous year. A final 2014 dividend is to be announced.