Restructuring boosts earnings at Ports of Auckland

Container volumes recovered and the volume of non-containerised freight increased. Picture / Brett Phibbs

Ports of Auckland said it had reached its goal of achieving a 12 per cent return on equity two years ahead of schedule with a net profit of $74 million for the year to June 30, up 90 per cent on the previous year.

The Auckland Council-owned port said the result was driven by a buoyant economy and efficiency gains arising from a restructuring that started in 2011. The company's statement of corporate intent sets out a return on equity forecast of 12 per cent by 2016.

Ports of Auckland declared a dividend for the year of $66.6 million, up 126 per cent on the 2012/13 dividend.

Chief executive Tony Gibson said the port's container volumes recovered and the volume of non-containerised freight increased to record levels, thanks to a buoyant economy.

"Productivity has been increasing since restructuring started in 2011 and has hit new highs this year."

In 2011 members of the Maritime Union went on strike over the company's plan to introduce a flexible roster.

At the time Ports of Auckland said the changes needed to be made to the way the company operated if it was to provide an adequate financial return to the council.

Gibson said 60 per cent of the workforce was now on a flexible schedule but that the company faced challenges in the year ahead.

In June, the Port of Tauranga, shipping giant Maersk Line, and Fonterra-backed logistics company Kotahi announced that they had signed contracts that involved Kotahi taking a small stake in the port and Maersk putting more containers through its terminals over the next decade.

As it stands, about 90 per cent of Kotahi's business goes through the Port of Tauranga.

Gibson said the Kotahi deal could potentially deprive the port of up to 10 per cent of its container volume. But he said this year the company would make strategic capital investments which would help lift productivity and capacity further.

These included a new tug, straddles and crane, a longer container wharf and a new truck grid.

The company was building new supply chain partnerships that would deliver greater efficiency and cost savings for importers and exporters, he said, using the recently-announced joint venture with Napier Port and Icepak in an inland port at Palmerston North as an example.