Port of Auckland says it has performed strongly in a rough economic environment. Photo / Michael Craig
Port of Auckland will pay its council owner $40 million this year, up by $10m after reporting a “stronger than expected” result.
The Auckland City-owned company today reported an underlying after tax profit of $55.2m in the 12 months to June 30, also up $10m on last year.
The port said results reflected the strong operational performance of the port in a tough economic environment.
“At a time where volumes across the industry have been significantly lower, the results highlight the port’s improvement in the container terminal, market share growth and well-controlled costs,” said Port of Auckland (POAL) chairwoman Jan Dawson.
The port has been under intense scrutiny by Auckland Mayor Wayne Brown during his term but in May he ditched plans for its sale and long-term lease with port land, assets and operations retained under council ownership.
Then, the council set out ambitious targets of $1.1 billion in profits over the next 10 years, exceeding the projected net returns from investing the proceeds of a port lease by $172m.
Dawson said this year’s dividend was $5m more than committed in the port’s Statement of Corporate Intent.
“We take our role as a council-owned organisation seriously and are proud to deliver more for Aucklanders,” she said.
“We were pleased to work collaboratively with the Mayor, Auckland Council and unions on Auckland Council’s long-term plan, ensuring positive outcomes for Aucklanders whilst securing the port’s future, providing certainty to customers and employees.”
While there had been some softening in the bulk and breakbulk volumes, there had been 133 cruise ship calls, and the container terminal performance had improved with volume in laden imports and exports lifting by 7% on volumes of 3%.
Revenue increased to $339m, up from $320m in the 2023 financial year. Net debt levels were cut from $407.5m to $375.8m and return on equity increased from 4.6% to 5.6% in 2024.
New container handling charges would come in January.
Cruise ship companies are deploying ships elsewhere because of the cost of operating here. POAL chief executive Roger Gray said Auckland expected 110 visits this summer.
He said the port had outlined a pathway of price increases per passenger from $15 to $60 over the next five years. While the charge will increase to $20 in October the pathway was under review because of other costs cruise lines were facing. The industry was critical to the company and to the city, said Gray.
The port plans to move cruise berths capable of handling some of the world’s biggest cruise ships eastward towards its cargo operations. A new cruise ship terminal is planned and the move over the next few years will reduce congestion around commuter ferry wharves.
Pre-pandemic, POAL paid a dividend of $18.6m in the 2018-2019 year. But that payment was hit by its disastrous $65m automation project started by previous leadership and later ditched. In the 2017-18 year it paid Auckland Council $51.1m.
POAL has previously been under fire for its safety record but Dawson said she was “particularly pleased” with the safety improvements.
“We’ve been through a significant safety culture turnaround over the past couple of years and the results are a testament to the hard work and engagement by staff. In the 12 months to June 2024, we saw a 56% reduction in time lost due to injury.”
Gray said he was proud of the improvement in safety. Two years ago the company set out a three-year “Regaining our Mana” strategy.
“We have largely achieved this in two years and are now focused on the next phase in our turnaround - Strengthening our Mana.”
During the year ports across the country moved to have Maritime New Zealand (MNZ) as the sole regulator.
“We have worked closely with MNZ on this transition and were delighted that they quickly adopted a national code of practice for stevedoring which is being rolled out,” said Gray.
Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.