Port of Tauranga reaps $77.3m in profit

Port of Tauranga has recorded a $77m profit this year. Photo/file

Port of Tauranga has declared a net profit after tax (NPAT) of $77.3 million for the year ending June 2016, down 2.4 per cent on the previous corresponding period.

The port also announced it would be returning $140 million to shareholders over the next four years in special dividends, and a five-to-one share split in response to market demands for increased liquidity.

Earnings before interest, tax, depreciation and amortisation (EBTDA) rose 2.2 per cent to $125.7 million, with container traffic up 12.1 per cent to a record 954,000 TEUs (20 foot equivalent units), but were offset by the decline in bulk cargoes. Notably, log exports fell more than 1 million tonnes with declines also in imported stock feed and fertiliser, reflecting challenges in key agricultural sectors.

The port's largely completed $350 million five year investment programme also impacted results, with higher depreciation charges, which were up $2.7 million in the current year alone. In addition, reported revenues fell to $245.5 million from $268.5 million, due to a $32 million decrease in revenue as a result of having to equity account Tapper Transport as an associate company within the port's new Coda logistics partnership.

However, Port of Tauranga chairman David Pilkington said $140 million would be returned to shareholders over the next four years, with a first tranche of $34 million by way of a special fully imputed dividend of 25 cents per share. Directors also declared a 30 cent fully imputed final dividend, which combined with the special dividend lifts total payments to shareholders for the 2016 financial year to 78 cents per share.

"We are very pleased with the progress that has been made against our long-term strategy to extend our freight catchment to become the country's leading freight gateway and to prepare to welcome the arrival of the large ships into New Zealand waters," said Mr Pilkington.

"We have capacity to continue to grow freight volumes for the foreseeable future, and importantly, relieve constraints now emerging elsewhere in the country's port infrastructure."

Mr Pilkington added that it was clear port capacity in Auckland was becoming constrained.
"We are willing to engage in a rigorous economic study to examine the optimal port capacity solution for the upper North Island," he said.

"However, we are optimistic that ultimately, the market will drive any rationalisation required. The arrival of bigger ships - and the efficiencies they can bring - will be a game changer."

Port of Tauranga chief executive Mark Cairns said the arrival of the first large ships in October - when a 9,600 TEU vessel is scheduled to call - would usher in a new era of sea-borne freight transport in New Zealand.

"And it is not just larger container ships that are calling... the 200-m long 35,000 tonne SBI Maia, chartered by TPT Forests, the world's largest log carrier, has also started calling and we will host Royal Caribbean International's mega cruise ship Ovation of the Seas this summer.

"Port of Tauranga is the first New Zealand port able to berth ships this size. The efficiencies they will bring and the potential costs savings for New Zealand importers and exporters are significant. We have achieved this result through careful cultivation of strategic partnerships with major exporters."

Port of Tauranga - June 2016 financial year cargo trends

• Total trade decreased 0.3% to 20.1 million tonnes.

• Exports decreased by 1.2% to 13.1 million tonnes, while imports increased by 1.4% to 7 million tonnes.

• Container throughput increased 12.1% to 954,006 TEUs. The largest increase was in imports, which increased by 34,260 TEUs.

• Milk powder exports increased 21.5% in volume, to just over 2 million tonnes.

• Kiwifruit volumes increased 21.1% and are expected to continue growing at this rate.

• Log exports decreased 18.2% in volume to 4.6 million tonnes.