Reorganised Auckland port back on track

Photo / Brett Phibbs

Profits up 70 per cent and dividend almost doubled as transformed Auckland company benefits from change.

Ports of Auckland chief executive Tony Gibson says the company is starting to reap the benefits of a reorganisation plan started in 2011.

The company, which that year suffered a series of setbacks that included industrial action, the withdrawal of shipping giant Maersk, and Fonterra's decision to make the Port of Tauranga its main upper North Island port, reported a first half net profit of $26.4 million, up 70 per cent compared with the same period a year earlier.

Ratepayer-owned Ports of Auckland set an interim dividend of $20.96m, up from $11.56m a year earlier.

Ports of Auckland aims to provide a 12 per cent return on equity and Gibson said it was not far from it, although he did not expect the second half to be as strong as the first.

He said the company was back on track after a rocky ride.

"We entered 2011 with a plan to change the organisation," Gibson said. "We wanted to redefine what the company looked like and to improve our processes, our technical platforms and to deliver better productivity," he said.

One aspect of that was to change the way the company managed and worked the ships, which involved introducing a controversial shift and roster system. About 60 per cent of its stevedores now work under the new system.

"The industrial side was one element, but the entire organisation has been tipped on its head. Now we are starting to reap the benefits of that reorganisation," he said.

Gibson said the pressure was on ports to become more efficient because supply and demand imbalances were driving down freight rates and hurting the big shipping companies, who in turn were always looking to pare back costs.

Compared with 2010, the port's cranes are 30 per cent faster, he said. The port can now turn around a large, 2200-container ship in 24 hours - a job that would have taken 40 hours in 2010.

Gibson said the next phase of the port's development would be a new terminal management system to be implemented in July, which will involve optical container recognition technology that will identify each container at the port's gate, and at crane level.

Highlights of the first half result included:

Total container volumes for the six-month period were up 15.1 per cent to 476,333 20ft equivalent units.

Break-bulk (non-containerised, including vehicles) cargo volumes were up 41.9 per cent to 2.87 million tonnes compared to 2.02 million tonnes in the same period last year. Car import numbers were up 29.3 per cent to 99,710 units, from 77,122 units in the same period last year.

Gibson said 2014 has started well, with volumes holding up.

Payout

$20.96m dividend this year
$11.56m dividend last year