We recorded an operating loss of $2.3 million in 2015-16. This was better than our forecast primarily due to the settlement of a pollution incident claim relating to the grounding of the Shen Neng 1 on Douglas Shoal, in the Great Barrier Reef Marine Park. We have strategies in place which are being formulated in future budgets to return us into surplus.
Our financial result for 2015-16 was influenced by the following significant activities.
A continued focus for us this year was the transition to full service delivery for the National System for Domestic Commercial Vessel Safety (National System) (p.35). We will be assuming full responsibility for service delivery and funding from 1 July 2017. Therefore our work to prepare for this has resulted in an increase in activity and staffing levels, as well as costs associated with the National System’s new IT system.
We commenced an organisational restructuring initiative aimed at delivering greater efficiencies through functional realignment and the removal of duplicated functions. This is due for completion in 2016-17.
The transition of our dedicated airborne search and rescue aircraft from our existing provider to our new service provider began this year (p.40). This involves development of the deployment program for aircraft, mission equipment, and crew. The final transition to the new service provider will occur in 2016-17.
We received lower than expected levy revenue due to continued slowing growth in shipping activity. However, we implemented savings strategies to mitigate this and achieved an operating result better than our forecast projections.
We achieved an operating loss of $2.3 million in 2015-16, compared with a $0.4 million surplus in 2014-15. The decrease in surplus of $2.7 million relates to decreased revenue of $0.3 million and increased expenditure of $2.4 million.
Our total revenue in 2015-16 decreased by $0.3 million (less than one per cent) from 2014-15. This was mainly due to a one-off funding increase in 2014-15 for the Malaysia Airlines MH370 incident and reduced revenue from government-funded projects. This was substantially offset by the settlement of a pollution incident claim relating to the grounding of the Shen Neng 1 on Douglas Shoal, in the Great Barrier Reef Marine Park.
In 2015-16, 57 per cent of our revenue was derived from levies and 30 per cent from government funding. The remainder came from rendering of services and other sources.
Revenue has remained steady with that from 2014-15, predominantly due to a decrease in government funding, offset by an increase in other revenue from a pollution incident settlement.
Our total expenditure in 2015-16 increased by $2.4 million compared to 2014-15.
The main drivers of our increased expenditure were one-off significant expenses for:
Employee costs also increased―driven by increased staffing needs to manage the implementation of the National System. Our expenses were offset by planned savings strategies.
In 2015-16, 61 per cent of our expenditure went to suppliers, 31 per cent to employee benefits, seven per cent to depreciation, and one per cent to other expenses.
Areas of expenditure, in percentage terms, remain broadly in line with that of last financial year except for other revenue which decreased due to a reduction in government-funded projects.