Ports of Auckland Half Year Results

Monday 22 February 2016
Media Release
Ports of Auckland Half Year Results

Highlights
1. Financials

• Reported unaudited net profit after tax (NPAT) of $31.6 million, up 9.5% over last year.

• Declared dividend of $25.9 million for the half year, up 1.79%. This represents 81.9% of after tax profit for the period.

• Revenue down 2.2% to $106.1 million, compared to the same period last year.

2. Volumes

• Container volumes down 3.3% to 474,613 TEU.

• Breakbulk and bulk volumes (including cars) down 2.8% to 2.995 tonnes.

• Car volumes up 4.4% to 124,009 units.

3. Container Handling Productivity

• Crane rate up 10% to 36.4 moves per hour.

4. Strategic Initiatives

• Developing a North Island supply chain network to support future growth.

• Investigating partial automation of our container terminal.

• Investing in container terminal infrastructure, wharves and cranes.

Ports of Auckland Chief Executive Tony Gibson has announced a ‘solid’ half year result for the company today, achieved despite a fall in volumes and revenue.

“The first half of the year has been anything but plain sailing. Global trade trends and shipping changes have affected container volumes, while China’s slowdown has impacted bulk volumes, particularly iron sand exports,” said Mr Gibson. As a result revenue has fallen slightly, but profit is up due to lower costs, largely as a result of the timing of repairs and maintenance.”

“Container shipping lines have been subject to intense competition in the New Zealand market with significant over capacity resulting in unsustainable freight rates. There has been some route rationalisation with some lines deciding to depart the New Zealand trade. This has contributed to a decline in volume.

“This situation is expected to continue into the second half and beyond, and will affect our full-year result. Our strategy is to ensure we offer the best service possible and keep our costs low. To that end we are looking at automation to help increase capacity and reduce on-port costs and we are building a freight hub network to squeeze costs out of the supply chain.

“We have started a second round of consultation on the proposal to partially automate our container terminal. Automation is expected enable us to handle more containers on the same land area, at lower cost. Consultation will take around six weeks and a decision on whether or not to proceed is expected to be made in April 2016.

“We have continued to build our North Island freight hub network, with development at our Wiri, South Auckland hub and the establishment of a new Bay of Plenty freight hub. In January 2016 we signed a conditional agreement to purchase land for a Waikato freight hub.

“Our freight hub network will be used to balance freight flows and eliminate unnecessary movement of empty containers. By driving out waste from the supply chain we can lower the cost to importers and exporters. All our hubs are linked by rail, which supports one of our sustainability targets to move more containers by rail.

“We now intend to consider whether there would be benefits to extending our network to the South Island, whether it would strengthen our position and benefit New Zealand importers and exporters through more competitive supply chain arrangements.

“The 20-year Fergusson Container Terminal expansion project is in its final stages. Construction of a new container wharf started in October 2015 and is due to be completed in early 2017. When complete it will give the container terminal a much needed third berth, with deep water, capable of taking the next generation of container ships expected to visit New Zealand.

Port location
“Over many years we have consolidated our operations to the eastern end of the Waitematā Harbour, releasing land for a variety of public uses. A further step in this process will be the shift of Holcim cement handling from Onehunga to Waitematā this year. We are now negotiating the sale of the Onehunga port to release further water side land.

“Auckland Council has set up a stakeholder group to consider the port’s long-term location. Our Board supports this work and management are taking an active part in the process.

“No matter where the port is located, our focus will remain on delivering operational excellence and maintaining our position as Australasia’s most efficient port, serving New Zealand’s importers and exporters and our largest city”, Mr Gibson added.

ENDS

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