Port of Tauranga chief executive Mark Cairns. Photo / George Novak
Port of Tauranga has left market expectations in its wake with a profit increase of 13 per cent to $94.3 million and record annual earnings.
The Mount Maunganui-based company said in the year to June 30, container volumes increased 8.9 per cent to nudge 1.2 million, and overall cargo volumes rose 10.2 per cent to nearly 24.5 million tonnes.
Earnings from associates and subsidiaries lifted 11.9 per cent to $16.4m, boosted by increased volumes across all major cargoes including export logs and dairy products.
Revenue for the year increased 10.9 per cent to $283.7m. Group net profit after tax at $94.3m was 13 per cent up on the previous year.
Market expectations for profit were around $93.8m. The company's guidance at its strong first half year result was for $92m-$96m profit.
The company declared a final dividend of 7c per share, taking the total ordinary dividend to 12.7c per share - an increase of 13.4 per cent on the previous year.
A special dividend of 5c per share will also be paid in line with the company's plan to return up to $140m to shareholders in the third year of a four-year capital restructure plan.
Shareholders have received an annual equivalent return of 22.4 per cent since the company listed in May 1992, it said.
Transhipments increased 23.3 per cent during the year, accounting for a quarter of all container traffic through New Zealand's busiest port, which today handles 40 per cent of the country's port container traffic.
Log volumes rose 14.3 per cent to 6.3m tonnes in the year and exports in total increased 8.2 per cent to 15.4m tonnes.
Imports were up 13.7 per cent to 9m tonnes.
Asset valuation increased by $226m.
Craigs Investment Partners senior research analyst Mohandeep Singh said the result was in line with expectations. However the mix of container volumes differed from expectations with ongoing second half year transhipments growth and weaker second half growth from Metroport and via the terminal.
Total second half trade volumes were slightly weaker than forecast, Singh said.
"We view the growth in transhipments as a stepped change ... due to the move to hubbing and it is difficult to known how far through that process we are now. So this could continue to create growth into FY2019-2020.
"The weaker second half growth through Metroport and the terminal provides some concern."
Transhipments, where containers are transferred from one service to another at Tauranga, grew 23.3 per cent in the year.
Chairman David Pilkington said the growth was a direct result of the company's six-year investment in building capacity to accommodate larger vessels.
"We completed our capacity expansion programme in 2016 and the effects were almost immediate. We are seeing larger container vessels as well as larger bulk cargo and passenger ships," he said.
Chief executive Mark Cairns said a ninth container crane had been ordered for delivery in 2020.
The port's container terminal now had 2634 refrigerated container (reefer) connection points, supplemented in the peak season with 12 generators each supplying power to 35 containers, he said.
"We believe we have the largest reefer capacity in Australasia, demonstrating the significance of the volumes we are handling."
The port also opened a new purpose-built coolstore at Mount Maunganui to handle kiwifruit and other chilled cargoes.
The company had started planning the next stage of capacity expansion, Cairns said.
It had about 40 hectares of undeveloped, port-zoned land available for expansion.
"We expect cargo growth to continue in the next year across most categories, and particularly containerised cargo," said Cairns.
Guidance on full year earnings would be provided at the annual meeting on October 17.