Growth gets Ports back on target

The largest container ship to arrive in New Zealand was the Maersk Detroit, which visited the port in December.

Ports of Auckland faces further turbulence in container volumes despite signs of strong growth in the past two months.

The company reported a 50 per cent lift in profit to $13.9 million in the six months to December 31, and was able to return a $9.9 million dividend to its sole shareholder, the ratepayer-owned Auckland Regional Holdings. ARH stumped up $50 million last year to help it repay a bank loan in December.

Ports of Auckland chief executive Jens Madsen said there was no need to go back for more.

"We are comfortable with the debt ratio that we have now."

The company did not pay an interim dividend last year.

Madsen said that amid a slump in world container trade estimated at around 10 per cent, container volumes through Auckland slid 3.7 per cent on the same half-year in 2008. During the past two months container traffic - which accounts for about three-quarters of revenue - increased by up to 7 per cent.

"It's fair to say that over the next three to four months it looks pretty good [but] we don't take anything for granted because the situation is pretty volatile."

Schedules which had changed infrequently now seemed to change by the month, given the financial pressure shipping lines were under. There were signs of growing consumer confidence helping imports and the export season was to move into full swing around the middle of next month, Madsen said.

The port handled 438,438 TEU or twenty-foot equivalent units for the six months, down from the 2008 record high of 455,083.

The company was on track to meet targets of $5 million savings in costs during the year. Last month it told staff it was investigating outsourcing more of its container handling roles although no decisions had been made. During the period the port had consolidated its container business at Fergusson Wharf to better utilise cranes.

The company was still not satisfied with the level of customer service and said a focus would be better turnaround times for large container vessels.

Towards the end of the year the company had been surprised by the upturn and had to hire extra staff to cover gaps left by layoffs of more than 30 people.

"It's fair to say that maybe we could have done with slightly less," Madsen said.

Vehicle imports were 62,751, up 42.4 per cent on the previous six months but down 5.6 per cent on last year. Madsen said this was due to dealers replenishing stocks.

The port has been operating trains to an inland site at Wiri since the beginning of the month and he said it was pleased with customer take-up of the rail link.

There was a slow move to larger container ships visiting New Zealand although they would not start arriving for about three years. The largest container ship to arrive in New Zealand, the 5000 TEU Maersk Detroit, called at the port in December.

Cruise bookings had been hit by Americans taking holidays closer to home. Sixty-two will visit this yearbut this is scheduled to rise to 73in the 2020-11 financial year.

Goldman Sachs JBWere's head of research, Marcus Curley, said the result was encouraging for the port, particularly in cutting costs which was traditionally the company's Achilles heel. The upturn in container traffic was also a good sign for the wider economy.

"You'd have to assume a bit of that is inventory rebuild but you'd have to say that's better than in the second half of last year. It certainly is a positive sign."