Port profit drops due to spend-up, as Peters wants it moved

Ports of Auckland's net after tax profit dropped. Photo/Richard Robinson

As Winston Peters wants to move Ports of Auckland to Northland, the business has just declared a drop in profit partly blamed on spending on its current site.

Rising operating expenses, including investments for the future, depressed the port's annual bottom line profit by $23.5 million - from $83.8m to $60.3m - but the Auckland Council-owned non-listed business said its results were still "in line with expectations".

Revenue rose from $211m to $222m, but operating expenses offset gains, spiralling from $103m to $119m although the business said last year's profit had been inflated by a $17.6m gain from an asset impairment reversal.

The result for the June 30 year "includes the cost of investments made in sustainability, a review of our business model, cyber security, innovation and automation", the port said.

The council's dividend fell from $54.3m last year to $51.3m this year although port chairwoman Liz Coutts said this "equates to 4.1 per cent of the average residential rates bill, a significant contribution the city can use for future investment while keeping rates down".

Chief executive Tony Gibson said: "Our trading profit and dividend are down slightly, reflecting the investments we are making to prepare for the future. This year, work started on our Waikato freight hub, we finished our third container berth and our automation project is well under way."

NZ First leader Winston Peters wants to move the port to Northport at Marsden Pt near Whangarei by the end of 2027, but Gibson emphasised investment at the current site.

"Our container terminal automation project is well under way and on track for completion in 2019. Innovation and automation will increase our container terminal capacity from 900,000 TEUs [twenty foot equivalent unit or container] a year to around 1.6 to 1.7 million. We estimate that on our existing land area we can handle up to 3 million TEUs, catering for an Auckland population of 5 million people," Gibson said, emphasising the benefits of automation.

However he also complained of rising costs.

"The year has not been without challenges. Auckland's construction boom and growth has driven significant increases in freight volumes, notably vehicles and building materials. Cement volumes are up almost 50 per cent in two years and cars are up almost 20 per cent in just one year. As a consequence we are experiencing capacity constraints on our general wharves, with some ships having to wait at anchor or at berth to unload," Gibson said.

The port handled 952,311 TEUs this year and 297,383 car and light commercial vehicles, up 19 per cent. That means 5718 vehicles arrived in Auckland every week in the June year, or 814 a day.

The company's annual report said 230,571 cruise ship passengers visited Auckland on 100 ships and the port handled 174,701 tonnes of wheat and grains and 13,616 tonnes of fresh fruit.

Coutts also emphasised spending on the current site, saying technology meant automation was no longer the exclusive preserve of larger ports and Ports of Auckland would be the first New Zealand port to become automated.

A council plan out today shows a scheme to reclaim the ferry basin, but Coutts spoke out against it, saying: "It is no longer acceptable for a port to reclaim more land every time in needs capacity."