UPDATE: Port of Tauranga lifts annual profit 6.7%

UPDATE: Port of Tauranga lifts annual profit 6.7% on record cargo volumes

(Updates with special dividend details from 6th paragraph and details of cargo trends from 9th paragraph)

By Jenny Ruth

Aug. 28 (BusinessDesk) - Port of Tauranga lifted annual net profit 6.7 percent on record cargo volumes with sales rising 10.4 percent.

Net profit for the year ended June was $100.6 million compared with $94.3 million the previous year on sales of $313.3 million.

The port, which is 54 percent owned by the investment arm of the Bay of Plenty Regional Council, handled more than 26.9 million tonnes of cargo, up 10.2 percent, with container volumes growing 4.3 percent to more than 1.2 million twenty-foot equivalents (TEUs).

The port’s earnings before interest, tax, depreciation and amortisation rose 12.4 percent to $168.8 million.

The port will pay a 7.3 cents per share final dividend taking the annual payout to 13.3 cents, 4.7 percent higher than the previous year. The dividend will be paid on Oct. 4 to those on the share register at Sept. 20.

It will also pay the last of four special 5 cents per share dividends. The board decided to extend the capital return programme to annual special dividends of 2.5 cents per share for another four years, subject to certain conditions.

The port says earnings from associate companies fell 27.5 percent after a “very disappointing” result from Coda Group, the port’s joint venture with Kotahi, but says it is confident Coda will return to profitability in the next financial year after an extensive change programme.

The port’s 100 percent-owned subsidiary Quality Marshalling lifted profit 15.1 percent and its PrimePort Timaru joint venture increased its contribution by 36.6 percent.

Exports through the port rose 11.2 percent to 17.1 million tonnes in the latest year while imports rose 8.4 percent to 9.8 million tonnes.

Log exports were up 12.5 percent at 7.1 million tonnes but the port says that trend isn't expected to continue in the short-term because of falling log prices in June following a drop in demand from China, New Zealand's biggest log export market.

Sawn timber exports rose 5.4 percent by volume and overall forestry-related exports rose 10 percent.

Dairy products exports were steady at just over 2.3 million tonnes while imports of dairy food supplements and fertiliser fell 11.8 percent and 9.2 percent respectively.

Kiwifruit exports rose 15.2 percent while other primary produce exports also rose with frozen meat up 18.8 percent by volume and apples up 54.3 percent.

Cement imports fell 17.1 percent by volume while steel imports were down 7.7 percent but salt imports rose 26.8 percent by volume.

Oil product imports rose almost 2 percent with dry chemical imports up nearly 9 percent.

Ship visits fell 3.9 percent to 1,678 for the year but the average size of vessels continues to increase.

Port chair David Pilkington says an 11.2 percent increase in transhipments points to the company’s “success in becoming New Zealand’s major international port.”

Transhipments, where containers are transferred from one service to another, have been growing significantly since 2016 when Port of Tauranga completed its $350 million capacity expansion programme to accommodate bigger container ships. They now account for 32.1 percent of containers handled.

“Port of Tauranga’s long-term agreements with key customers give it the assurance to plan ahead for increases in cargo growth,” Pilkington says.

The larger ships only New Zealand call is into Tauranga and then use sea links between the port and Timaru, Napier, Nelson or Wellington to ship goods around New Zealand.

“Having the necessary infrastructure is one thing but it is also vital to have the relationships to ensure we have the freight volume to attract the big ship services,” Pilkington says.

Port of Tauranga shares last traded at $6.12 and have gained more than 24 percent in the last 12 months compared to the benchmark S&P/NZX 50 Index’s 14 percent gain.

(BusinessDesk)

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