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Home / Business

Port of Tauranga lifts mid-year profit in turbulent supply chain

By Andrea Fox
Herald business writer·NZ Herald·
24 Feb, 2022 08:31 PM4 mins to read

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Mid-year results attributed to Port of Tauranga's resilience in challenging supply chain times. Photo / Supplied

Mid-year results attributed to Port of Tauranga's resilience in challenging supply chain times. Photo / Supplied

Port of Tauranga has posted a 15.6 per cent lift in group net profit on steady cargo volumes in a half year of continuing supply chain upheaval.

New Zealand's biggest port and main export gateway said group net profit after tax for the six months to December 31 was $56.3 million compared to $48.7m in the same period last year.

Operating revenue increased 16.7 per cent to $186m due to changes in container mix and higher container revenue. However operating expenses also rose, by 17.5 per cent, swelled by increased rail, labour, fuel and electricity costs.

The company will pay an interim dividend of 6.5c per share, up 8.3 per cent on the same period last year.

Based on first-half performance, the NZX-listed company expects full-year earnings in the range of $103m-$110m, compared with $102.4m in the 2021 financial year.

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Subsidiary and associate company earnings fell by 11.2 per cent on the previous same period, partly due to changes in the group's accounting for the Timaru container terminal.

Associate logistics company Coda Group's performance improved significantly from the previous year and Quality Marshalling produced strong financial results, said the company.

Total trade decreased by just under 3 per cent with a 2.7 per cent increase in imports to 5m tonnes offsetting a 2 per cent fall in exports to 8m tonnes.

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Container volumes increased 1.5 per cent to 622,271 TEUs (twenty-foot equivalents).
Log exports were down 6.1 per cent at close to 3.1m tonnes. Direct dairy exports increased 2.3 per cent to just over 1m tonnes and direct kiwifruit exports were up 16 per cent on the same period last year. Oil product imports fell 10.4 per cent in volume while fertiliser imports were up nearly 12 per cent. Grain and feed imports increased 22.1 per cent.

Outgoing chair David Pilkington said the mid-year results reflected the resilience of the port's diverse portfolio of cargoes and income streams along with changes to the container mix.

Disruption across the supply chain would be exacerbated by the Omicron outbreak, he said.

Pilkington, who this week announced his July retirement after 17 years on the board, nine as chair, gave the RMA process and the Government a serve over lack of progress in getting the regulatory green light for a "critical" container ship berth extension.

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The "glacial pace" of the regulatory process was "extremely frustrating", he said.

"The Resource Management Act processes fail to recognise the critical nature of this infrastructure project and the Government's unwillingness to expedite the resource consent is very disappointing."

The port has said with freight volumes ballooning, it risks running out of capacity in 2024-2025 if it doesn't get the all-clear for a start soon on the berth extension, planned since 2018.

The application for a resource consent is now awaiting a hearing date in the Environment Court, after being declined for the Government's shovel-ready and Covid fast track infrastructure project programmes in 2020 and 2021 respectively.

The project has lost a year through these unsuccessful processes, the port has said. The berth will take up to 2.5 years to build.

Chief executive Leonard Sampson said the port had continued to grapple with global supply chain disruption caused by the pandemic, while preparing for more operational issues should Omicron spread in the Bay of Plenty.

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Congestion during the traditional busy December month had been considerably less than in 2020, in part because KiwiRail had reinstated the number of trains destined for the port's Auckland inland MetroPort to 92 per week from 72 the previous year.

Import demand remained elevated with the number of containers transferred by rail to and from Auckland increasing nearly 21 per cent, Sampson said.

Ship visits were up 3.5 per cent at 684 vessels.

Transshipments however continued to be suppressed due to limited shipping options, changes to vessel rotations, delays and congestion.

The outlook for the second half of the year was uncertain, Sampson said.

"We believe we have done everything we can to prepare for the inevitable disruption of a large Covid outbreak. However, the upheaval of widespread illness and employee isolation requirements is being felt worldwide, not just in New Zealand."

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