Port of Tauranga

Port of Tauranga Announces Robust Half Year Result, February 2010

Posted on 25th February 2010

Port of Tauranga has produced an improved net profit of $23.072 million for the second half of 2009.

The 2% increase in net profit on the corresponding period last year, which was itself a record, is very pleasing when tonnage through the port was down 5% to 6.5 million tonnes. Exports grew nearly 10%, but container volumes were down by 18%. The improved export tonnages were particularly in logs, up 31% and dairy up 44%. The recession in 2009 prompted the consolidation of shipping lines and while that gained Port of Tauranga increased exports, we lost imports, a situation currently being addressed by management.

With a market capitalisation of $945 million, net borrowings at the end of calendar 2009 of $206.3 million means that the balance sheet is particularly strong, with a debt to debt plus equity of 29%, and an interest cover of 6.2 times.

John Parker, Port of Tauranga Chairman, said "The 2009 year was an extremely challenging one for the business, with the global recession significantly affecting imports into New Zealand. Despite reduced trade, we achieved an increase in earnings, largely by cost reduction and without an increase in customer tariff rates. In the face of a 9% reduction in revenue, this is a very satisfactory result and a great credit to all staff."

Directors have maintained the interim dividend payment at nine cents per share, fully imputed and payable on 26 March 2010, to shareholders of record on 12 March 2010.

Chief Executive Mark Cairns said "despite a very tight focus on costs, customer service levels continued to improve over the past six months, with crane productivity up 3.5% over the last quarter of 2009, to 35.3 moves per hour. Truck turn times through our terminals are also industry leading, with an average of 10 minutes turn time at Sulphur Point, and nine minutes at MetroPort Auckland."

Mr Cairns said "Looking forward we believe the container market will remain volatile in the short term with approximately 10% of the global container capacity idle. The forestry market has been trading strongly over the second half of 2009, with export volumes up more than 30% on last year and market indications suggest this will continue into 2010. It is difficult to accurately forecast the remaining half of this financial year, but we anticipate a gradual improvement in economic growth and at this stage we maintain our previous guidance of achieving a full year earnings result similar to last year's, which was a record. Our business fundamentals and relative competitive advantages remain strong - the Company is well poised to be New Zealand's Port for the Future."

BUSINESS HIGHLIGHTS
• Log export growth of 31% and a 4% growth in other processed forestry exports on the prior corresponding period.
• Dairy export growth of 44% on the prior corresponding period.
• Improved performance by our two 50% owned associate companies, C3 Limited and Northport Limited boosted largely by increased log throughput.
• Commissioning of a new Liebherr super post-panamax gantry crane capable of serving larger vessels and lifting two 20 foot containers at once.
• Lodging of resource consent applications to dredge harbour channels to cater for the next generation vessels. A consent hearing date is scheduled for March 2010 and once these consents are secured, Tauranga will be the only New Zealand port capable of providing 14.5 metre draught at low tide. Dredging will commence in a timely manner, as and when required by market demand.
• Rollout of CargoConnect software offering our shipping customers, importers, exporters, and border agencies, access to a single web-based system to manage all cargo movements and information transfer to and from our terminals at Sulphur Point and MetroPort Auckland.
• Pacific Terminals importing seven new tanks from China to significantly expand their bulk liquids facility at the port.

Port of Tauranga is New Zealand's largest and most efficient port with an annual cargo throughput of more than 13 million tonnes.

 Accounts (pdf)
 Analysts Presentation (pdf)

For further details, contact:
John Parker
Chairman
Port of Tauranga Limited
Ph: 0274 421 854

Mark Cairns
Chief Executive
Port of Tauranga Limited
Ph: 07 572 8829 or 021 978 887