KEY POINTS:
Ports of Auckland significantly increased the amount of debt on its books last year, financial statements show.
The debt to debt plus equity ratio - a measure of how the business was being financed - was 52.8 per cent for the year ending June, compared to 35.9 per
cent the previous year.
Debt at the port for the year ending June was $362.2 million compared to $306.4 million the previous year.
Finance costs of $24.2 million were up from $15.2 million on the back of higher debt levels related to a roughly $150 million capital investment programme - of which $76 million was spent last year - and a $120 million special dividend which had been paid to owner Auckland Regional Holdings in December 2005.
Chief financial officer Wayne Thompson said: "We had a look at capital structure at the time [of the special dividend] and to be honest we thought [the] balance sheet was a little bit lazy and we could carry more debt so we adjusted [the] capital structure to something that we thought was appropriate."
The port was comfortable with the ratio, which was not considered too high, he said.
"Not given the nature of this industry and the strong cash flows and very strong asset base as well."
First quarter volumes at the port showed double digit growth on last year but it was too early to make any financial predictions, said managing director Jens Madsen.
"The volumes that have come through are pretty much in accordance with what we had expected," Madsen said. "I think give us another couple of months and we would feel more comfortable providing some comments on that [financial outlook]."
The handling of 773,160 twenty-foot equivalent container units in the year ending June 30 was up 12.7 per cent on the previous year, while revenue grew 2.4 per cent to $162.9 million.
The majority of volume growth occurred during the second half of the year, following an agreement with carrier Maersk.
Critics have accused the port of landing the Maersk deal at too low a price.
"There has been speculation in the market about that, obviously we cannot disclose the content of our contracts," Madsen said.
"But looking ahead we have invested a lot of money with the aim to improve our productivity quite dramatically," he said.
"With the three new cranes having been fully phased in we already now see some gains coming through."
Gains in productivity were the primary objective for the port, Madsen said.