Auckland port defies gloom

By PAM GRAHAM

The economy is lifting, not softening, if container movements at Ports of Auckland in July are anything to go by.

The port, which yesterday reported a 20 per cent rise in annual profit to $57.2 million, including a $15 million gain from the sale of its marinas, said its new financial year had started strongly.

It handled 20 per cent more containers in July than a year ago.

Chairman Neville Darrow cautioned against reading too much into one month's figures but chief executive Geoff Vazey said the July figures were "big numbers".

The port handles two-thirds of the country's imports by value and one-third of exports by value.

Its July month was its second biggest ever, although volume was boosted by the seasonal movement of empty containers.

Imports of full containers rose 12 per cent on last year and exports of full containers were up 14 per cent.

"It is indicating to us a little bit of a lift," Vazey said.

The economy is widely expected to soften as higher interest rates and fuel prices impact on consumers.

Excluding unusual items, the port's earnings rose 4 per cent to $44.3 million. Operating earnings were down 1 per cent at $75 million, reflecting the loss of an Asian service to Port of Tauranga and a smaller marina berth sale programme this year.

The company did not pay a special dividend from the marina sale, opting to raise its final dividend to 25.5c a share, making the annual payout 19 per cent higher than last year.

It paid out 75 per cent of its aftertax profit including the marina sales. The port is considering the makeup of its balance sheet, how to counter the Port of Tauranga's encroachment on its market and how to go hunting for exports further afield. But it is not giving out any details.

"The company is analysing opportunities in its port activities and property portfolio," Darrow said.

"These may result in investment opportunities and a capital restructure which will be value enhancing to shareholders."

On July 1, the 80 per cent stake in the port held by Infrastructure Auckland passed to Auckland Regional Holdings, which can seek two directorships.

The port rejected the suggestion that it was looking to sell more property. It was trying to get parts of its western end rezoned for mixed use but said it would not become a property developer.

Auckland is the country's biggest port but it faces competition from Port of Tauranga, which accesses the Auckland market by rail and an inland hub at Southdown.

Ports of Auckland handles the ships everyone wants: P&O Nedlloyd's fleet of big container ships, known as 4100s.

It is investing in dredging its channel to accommodate ever larger ships at as many points of a tide as possible.

It said its customers rated its service among the best in Australasia and ship hours in port reduced by 20 per cent at its main container terminal.

Ports of Auckland would like to use rail to haul containers to a new inland site in Wiri it is developing and to bring exports from further afield within its reach. It also has an inland site at East Tamaki.

The port blamed the under-use of its railhead on Tranz Rail and has been in talks with new owners Toll Holdings.

"There are a number of opportunities that we are talking to Ports of Auckland about," Toll NZ chief executive David Jackson said.

Auckland, like any other of the ports, would be taken into consideration in Toll's capital investment plans.

Vazey said Auckland had spare capacity and was the best equipped port to handle big ships.

"Several initiatives are under way to regain ground" he said. The Ports of Auckland share price dropped 14c yesterday to $6.96.