Port of Tauranga breaks $100m profit mark with strong volume growth

Cargo volumes continue growing at Port of Tauranga.

Group profit for the Port of Tauranga cracked $100 million for the first time in the 2019 financial year, with shareholders set to enjoy the bounty through an extension to the capital repayment programme.

Group net profit was 6.7 per cent up on the previous year at $100.6m, fulfilling previous earnings guidance of delivering at the upper end of $96m to $101m.

Revenue increased 10.4 per cent to $313.3m.

The company will pay a final dividend of 7.3c per share, making the full year dividend 13.3c a share, up 4.7 per cent on 2018.

A special dividend of 5c per share will also be paid and the capital repayment programme that enabled it is to be extended for another four years through special dividends of 2.5c, subject to conditions.

The company has also announced that Standard & Poors has upgraded its long-term credit rating to 'A-' from 'BBB+. The agency also affirmed the company's 'A-2' short-term rating.

The port handled close to 27 million tonnes of cargo, an increase of 10.2 per cent in volume, with container cargo growing 4.3 per cent to more than 1.1 million TEUs, or twenty foot equivalents.

Exports increased 11.2 per cent to 17.1 million tonnes while imports rose 8.4 per cent to 9.8 million tonnes.

Transhipments, where containers are transferred from one service to another, increased 11.2 per cent, now making up 32.1 per cent of containers handled at Tauranga.

Chairman David Pilkington said the results were evidence of the port company's success in becoming New Zealand's major international hub port, after investing $350m in capacity expansion to accommodate some of the world's largest container ships.

New Zealand Inc. could access fast, big ship services that only call in Tauranga by utilising sea links between Tauranga and Timaru, Napier, Nelson or Wellington.

Chief executive Mark Cairns said the number of containers transferred by rail to and from the port company's inland freight hub, MetroPort Auckland, increased 4.3 per cent in the year. The inland hub was now the country's fourth largest container terminal by volume.

The company also expanded its Christchurch inland freight hub to handle dairy exports from Westland Milk, he said.

Parent company EBITDA increased 12.4 per cent to $168.6m.

Earnings from associate companies decreased 27.5 per cent after what Cairns called a very disappointing result from Coda Group, the port's 50:50 joint venture with Kotahi.

Cairns was confident Coda would return to profitability in the next financial year. Coda's new chief executive Gerard Morrison had started an extensive change programme.

The company's 100 per cent-owned subsidiary Quality Marshalling had an outstanding year with profits increasing 15.1 per cent, while South Island joint venture PrimePort Timaru increased its contribution by 36.6 per cent.