Tauranga Port posts $73.5m profit

Port of Tauranga has ridden the waves of recession to post a record profit of $73.5 million, with three out of every four major New Zealand exporters opting to use Tauranga over Auckland.

Fresh from being named as one of the world's top 10 ports for its speed of handling containers, the port's latest annual result showed it was going from strength to strength.

The country's biggest export port has defied difficult international trading conditions since the recession started to bite. The volume of cargo handled across the wharves reached 18.5 million tonnes - an increase of nearly 52 per cent on the boom days of 2006.

Port CEO Mark Cairns paid a tribute to the "can-do culture at the heart of our business" for the strong result, driven by the container trade growing by a third to reach nearly 800,000 units.

The result underlined the huge importance of the port on the regional and national economy, employing about 1180 people inside the port gates. Flow-on employment from people who benefited from the spending power of the port and its employees multiplied to a total of 2900 jobs.

The latest University of Waikato update of the port's economic impact said that business activities associated with the port comprised 51 per cent of the Bay of Plenty's economic activity.

Its impact on the Bay of Plenty totalled nearly $14 billion, when revenue earned from port operations was added to the value of imports and exports handled across the wharves.

Dr Warren Hughes, of Waikato University, then added the impact of the port on the rest of New Zealand and found it totalled $27.7 billion. The added value generated by the port totalled $10.8 billion or nearly 6 per cent of New Zealand's gross domestic product (GDP). His report published in November 2010 found that the Port of Tauranga's exports were almost three times those of its closest competitor, the Ports of Auckland.

"Major exporters already favour the Port of Tauranga over Ports of Auckland by a three-to-one margin. Accordingly, any constraint on the port's development also puts at risk cost-effective exporting by New Zealand's most important exporters," he said.

Mr Cairns said group net profit had increased by 87 per cent since the global financial crisis began in July 2007. Freight diverted to the port from industrial action at the Ports of Auckland contributed less than a third of the increase in containers. Industrial action saw volumes peak at 82,000 containers in March - 80 per cent up on a year earlier.

He said container volumes had eased since March to just under 70,000 units in June - still nearly a third more than June 2011.

Mr Cairns said the way the port and KiwiRail handled the pressure generated by Auckland's problems gave him even more confidence that the $180 million port expansion over the next years would prepare the port for its next period of growth. The expansion focused on dredging to handle the next generation of container ships and the expansion of the terminal including buying two new cranes at $13 million to $15 million each.

The record result coincided with the two 20th anniversaries for the port - its listing as a publicly listed company and the establishment of Sulphur Point.

Highlights of the Port of Tauranga's Annual Result (for the year to June 30):

• 
  Net profit after tax $73.5 m (up 26 per cent).
• 
  Containers 796,024 (up 35 per cent).
• 
  Volume of all goods 18.5 m tonnes (up 20 per cent).
• 
  Log volumes 4.9 m tonnes (up 11 per cent).
• 
  Dairy volumes 1.3 m tonnes (up 126 per cent).
• 
  Export containers transhipped to Tauranga 2.5 m tonnes (up 92 per cent).
• 
  Full year share dividend 39c (up 26 per cent).