Ports of Auckland geared for growth

MEDIA RELEASE
Tuesday 25 September 2007

Ports of Auckland geared for growth

Ports of Auckland, New Zealand's premier container port, is looking forward to a robust year on the back of steadily improving container volumes.

The Company has made substantial capital investments during the past three years, and with additional business coming from recent shipping service wins, it has achieved a 12.6 per cent increase in container volumes to 773,160 TEU (twenty-foot equivalent container units) for the year ended 30 June 2007.

The $150 million investment in infrastructure, plant and equipment further enhances the Port Company's international competitiveness as a hubbing port and ensures the port is well geared to service New Zealand's trade growth in the coming years.

Containerised export and import trade through Ports of Auckland has averaged 8% growth per annum over the past 15 years. 2006-07 has seen unprecedented growth with the world's largest shipping line choosing Auckland to hub more services over, while 2007-08 is predicted to be an even busier year.

Ports of Auckland Managing Director Jens Madsen said: "We remain strongly focused on the development of world class, cost-effective solutions for international shipping lines, importers and exporters. Through our long-term capacity and capability investment strategy and further productivity improvements, we can and will be the most efficient port providing the best service in Australasia."

To that end, the deepening of the harbour channel was completed this year; three new post-panamax twin-lifting container cranes were installed, 17 new straddle carriers were commissioned, with a further ten on order, and stage one (5.8 hectares) of the Axis Fergusson container terminal reclamation extension has moved to near completion.

Volumes
Total container volumes were 773,160 TEU (twenty-foot equivalent container units) for the year ended 30 June 2007 (a rise of 12.6%). Full import and export container volumes for the year increased 4.9% and 6.5%, while break-bulk (non-containerised) cargo volumes through the port were down 7% to 4.2 million tonnes, partly due to reduced car imports into Auckland. Ship calls were up to 1771 (2006: 1739), boosted by a bumper cruise season with 46 calls. The Auckland port will have another record cruise season this year, which started on 24 September, with 73 calls booked for the 2007-08 season.

Financial Results
The 30 June 2007 results are the first full year results reported under the new International Financial Reporting Standards (IFRS).
Port operating earnings before tax and interest (EBIT) was $52.2 million for the year ended 30 June 2007 compared with $62.3 million the previous year.

The 2007 result included a number of one-off costs totaling $7.0 million. These included $1.5 million related to repairs to the Fergusson Wharf, $1.3 million for the dismantling and disposal of older cranes, $0.6 million foreign exchange impact due to IFRS, (last year's result included an IFRS foreign exchange gain of $2.2 million) and various other costs and project costs related to the merger talks with Port of Tauranga Limited.

Investment property EBIT was $5.2 million for the June 2007 year compared with $6.0 million the previous year. The IFRS result also now includes the gain on the revaluation of investment property; this was $26.7 million for the year compared to $55.9 million last year. During the year the Western Reclamation (tank farm) property assets were transferred to Ports of Auckland's 100% shareholder Auckland Regional Holdings by way of an in-specie dividend.

Interest cost on higher debt levels as a result of the capital investment programme and a special $120 million dividend paid in December 2005 was $24.2 million, up $9 million on 2006. Taxation was $6.0 million compared to $15.5 million last year; the decrease was partly due to the impact on the deferred taxation liability of the distribution of the Western Reclamation property assets and the decrease in the corporate tax rate.

Net profit after taxation for the June 2007 year was $61.1 million compared to $93.8 million last year.
Total assets at 30th June 2007 were $755.9 million compared to $931.3 million at 30th June 2006.
During the year cash dividends of $19.9 million were paid to Auckland Regional Holdings.

Operating environment
Shipping lines continue to consolidate their services, using larger vessels on fewer main routes and consolidating cargoes onto larger hubbing ports. This trend will have direct implications for New Zealand's economy, which is dependent on maintaining and improving its transport supply chain links with world markets.

Jens Madsen said: "Ports of Auckland, located on the door-step of New Zealand's largest population and manufacturing centre is the natural choice and is well set up to be a central point in the Australasian port network.

Outlook
Looking to the year ahead, Madsen said productivity measures will further improve and the Company was expecting further gains as it built on the strong, established platform for growth.

ENDS

Note to editors:
Ports of Auckland, New Zealand's leading port company:
• Plays an integral role in servicing New Zealand's supply chain links with the world.
• Handles 50% of the North Island's container trade, and 37% of New Zealand's total container trade.
• Provides significant funding for the Auckland region to undertake major public infrastructure improvements, via dividends to its shareholder Auckland Regional Holdings. In the seven years to 30 June 2007, POAL has provided over $400 million in dividends.
• Owns and operates the international Port of Auckland on the Waitemata Harbour, the regional Port of Onehunga, which serves coastal ships using the Manukau Harbour and two inland ports, at East Tamaki and Wiri In South Auckland.
• Has a 19.9% stake in Northland Port Corporation (NZ) Ltd, which part-owns NorthPort Ltd, the Marsden Point deepwater port. POAL also owns 50% of North Tugz Ltd, which provides towage and pilotage services at Marsden Point; and 27.5% of United Containers Ltd, New Zealand's largest container depot operator.
• Offers premium crane intensity – operating eight portainer cranes, with five of them new-generation and twin-lift capable.
• Has the newest, most efficient and largest (43) straddle carrier fleet in the country.

* Hubbing is the concept of shipping cargo to a primary port, which is then transhipped to its final destination by sea, road or rail.

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