Ports shareholders promised payday

By DANIEL RIORDAN transport writer

Ports of Auckland plans to return capital to shareholders and pay out more in dividends.

The capital repayment, scheduled for October, was announced yesterday as the company reported a slight rise in net profit and the death of its inland port joint venture with Tranz Rail at Palmerston North.

The company had some good news for Auckland's congested roads, outlining plans to establish a series of "microports" around the region.

Trucks will move goods between the port and microports overnight, reducing daytime congestion and cutting down on transport costs and time for customers.

The microports will cost less than $1 million each to set up, says managing director Geoff Vazey, with about four being initially planned - the first two in East Tamaki and South Auckland.

The inland port proposal, announced in March, was to feature a daily return rail service between Auckland and Palmerston North and was proposed after a fierce rival, the Port of Tauranga, set up the country's first inland port, South Auckland's Metroport, in June 1999.

But yesterday Ports of Auckland admitted the proposal was dead.

Chairman Neville Darrow said it had raised more complex issues for Tranz Rail than the companies had foreseen.

But he said the port company was interested in pursuing further partnerships with Tranz Rail and had hired a major financial consultant to explore ways of doing this.

That report should be finished by the end of the year.

Net profit for the June year was 3 per cent higher at $44.25 million, although total revenue dropped to $149.5 million from $154.2 million, reflecting lower marina revenue.

Revenue from port operations rose 1 per cent to $137.5 million.

Operating expenses increased 1 per cent to $82.2 million, while earnings before interest and tax, excluding a $2.8 million unusual gain from a legal dispute over Auckland City Council rates, rose 2 per cent to $55.3 million.

The unusual gain compared with a $2.5 million expense last year.

As expected, the property segment did not perform as well as in 1999-2000, when benefits flowed from the America's Cup.

Container volumes increased by 8 per cent to 567,000 TEUs (20-foot equivalent units).

In a change to dividend policy, ordinary dividends in future will represent 75 per cent of after-tax profits, subject to meeting the company's cash needs.

Since 1996 Ports of Auckland has paid steady ordinary dividends of 18cps each year, with additional special dividends paid from time to time from the company's reserves.

It now believes its investors would benefit more from the certainty of regular payments of interim and final dividends.

A review of the company's capital structure - aimed at establishing the optimal level of capital required - is due to be finished by the end of September.

Mr Darrow said a capital payment to shareholders should take place in October.

The level of repayment had yet to be determined, but the company had considerable room to move above its current debt to asset gearing of around 11 per cent, he said.

Infrastructure Auckland owns 80 per cent of the company's shares.

The company is also looking at selling much of its land west of Princes Wharf.

Ports of Auckland shares rose 3c yesterday to $5.56. Tranz Rail's rose 15c to $4.15.