Port of Tauranga turned in a mid-year 2.3 per cent increase in group net profit after tax, despite volatile cargo volumes and fallout from supply chain congestion and severe ship delays at Auckland.
Group net profit after tax for the first six months of the 2021 financial year to December was $49.4 million, achieved despite a 1.3 per cent decrease in total trade volumes to 13.1m tonnes.
Revenue was $159.5m, up 3 per cent on the same previous period, due to higher income from the container terminal and a 22.3 per cent rise in the earnings of subsidiaries and associate companies.
The company will pay an interim dividend of 6c per share, the same as last year's.
Against a backdrop of supply chain volatility, container volumes at New Zealand's biggest port and its main export gateway, were down 4.6 per cent to 612,988 TEUs, yet the port handled near record volumes of boxes in October and December.
But lower than previous demand from June to August, and vessel delays in November, dragged down year-to-date container volumes.
The port said 50 fewer container ships visited Tauranga between September last year and January this year because of port congestion.
It attributed the congestion to global supply chain congestion after Covid-19 lockdowns, industrial action at Australian ports resulting in ship delays into New Zealand and productivity issues at Ports of Auckland.
The Auckland port, main first call for imports, was only using around 31 per cent of its available crane capacity - two at night and three during the day, said Port of Tauranga.
Vessel delays of 7-14 days at Auckland carried to all other New Zealand ports.
Imports increased 5 per cent to 4.9m tonnes while exports fell 4.8 per cent to 8.2m tonnes, notably including dairy exports which were down 10.8 per cent to 1.1m tonnes.
The dairy volume fall was attributed to vessel delays resulting in higher than expected inventory levels. With the Global Dairy Trade (GDT) price index at levels not seen since May 2014, the port expected a stronger second half for dairy exports.
Log exports were 2.1 per cent lower than at the same period last year, at close to 3.3m tonnes. Log volumes were also expected to pick up in the second half.
Kiwifruit exports were up 5.4 per cent, and meat exports 1.6 per cent.
Fertiliser imports fell 17.1 per cent in volume in response to lower demand from farmers.
Transhipment of containers was down, by 5.1 per cent in TEUs.
Ship visits fell by 15.3 per cent to 661 in the six months. Although the port handled vessels which diverted from Auckland to avoid the congestion there, there were also delays and cancellations. The port hosted no cruise ships, compared to 34 at the same time last financial year.
Overall costs increased 5.2 per cent.
Chairman David Pilkington said the half year results were pleasing considering the cargo volumes volatility and reflected the stability offered by having diverse companies in the group.
He said the ups and downs of container volumes were echoed in overall cargo tonnage, which fell 1.3 per cent in the six months yet in December were 15.1 per cent higher than the same month in 2019.
"Severe" vessels delays out of the Ports of Auckland since September had significant flow-on effects for the Port of Tauranga, Pilkington said.
"We have done our best to accommodate diverted import and export cargoes from Auckland. However we have had to limit our assistance as we have been constrained by the lack of availability of additional rolling stock and train drivers for the rail link between Tauranga and Auckland."
The average cargo exchange per container ship was 21 per cent higher in December 2020 compared with December 2019, due to cargo bypassing Auckland's congested port, he said.
Late arriving vessels had been slow to pick up exports, creating worse container yard congestion.
Outgoing chief executive Mark Cairns, delivering his last financial results for the company he's headed for more than 15 years, said all parts of the supply chain needed to do their bit and the port was grateful to importers and exporters in improving terminal productivity in a difficult time.
"Unfortunately the threat of congestion remains and is unlikely to dissipate until Ports of Auckland sorts out its operational problems," he said.
Meanwhile, Port of Tauranga had applied for the Covid-19 recovery fast-track resource consenting process for its proposed berth extension at the container terminal, creating a fourth berth.
The $68.5m project could help ease congestion in the upper North Island supply chain, especially with the prospect of the Ruakura Super-hub and inland port at Hamilton coming on stream.
"No Government funding is sought for the project and it is frustrating the consent process takes so long," Cairns said.
Earnings for Northport, Tauranga's Northland joint venture with Marsden Maritime Holdings, were down 4.8 per cent to $4.5m, though trade was up 2.8 per cent on last year and log exports up 11.7 per cent. Container volumes at the deepwater port south of Whangarei were down 24.5 per cent to 5388 TEUs.
The outlook for the second half of the financial year remained uncertain, said Cairns, who leaves the company in June and will take up governance roles.
"We are confident we are managing any congestion challenges at our locations. However, the situation in other parts of the supply chain is far from resolved.
"Covid-19 precautions continue to have a big impact on our costs, as we continue to prioritise the safety of our team members and the community. There is still much uncertainty as to what the second six months of the year will bring, but we are confident we are in a strong position to tackle any challenges."
Port of Tauranga expects full year earnings to be between $94m and $100m.