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On behalf of the Auditor-General, Tauranga, New Zealand
I am very pleased to report on another outstanding result for the Port of Tauranga, 20 years since becoming a publicly listed company.
Strong growth across the Company, and in all major cargo categories, has seen Group net profit grow by 26% to $73.5 million for the year ended 30 June 2012.
This year has not been without its significant challenges. Events beyond our control - the grounding of the container ship MV Rena off the Bay of Plenty coast and the protracted industrial action in Auckland - at times stretched our existing resources to their limit.
Our staff and service providers have met the challenges head-on, and this year's results are a tribute to them.
Group net profit after tax was $73.5 million for the year ended 30 June 2012, up from last year's underlying profit of $57.9 million. This year's result includes $1.3 million impairment to buildings which are to be relocated in the short term to create more space and increase productivity at both the Sulphur Point and Mount Maunganui wharves.
A revaluation of land, buildings, wharves, harbour improvements and hardstanding as at 30 June 2012, resulted in values increasing by $13.2 million.
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 18% to $128.9 million for the Group.
Our balance sheet remains very strong with debt to debt + equity at 29%.
Our associate companies again performed solidly, with excellent results reported by Northport Limited.
Total trade increased 20% to 18.5 million tonnes in the year to June 2012. The Port handled 35% more containers than the previous year, and export log volumes increased to a record 4.9 million tonnes.
Overall, imports increased by 20% and exports increased by 20%.
The Chief Executive's review will explore trade categories in more detail.
Directors have declared a final dividend of 27 cents per share, on top of the interim dividend of 12 cents per share, bringing the total dividend to 39 cents per share. This is an increase of 26% on last year's dividend distribution.
Messrs Baylis and Cronin retire at the Annual Meeting in accordance with the Company's Constitution and offer themselves for re-election.
The Port of Tauranga team has again outperformed our expectations in rising to the challenges of the past year. The Senior Management Team possesses an outstanding ability to drive a future-focussed strategy, while maintaining the day-to-day focus on customer needs. Their response to acute issues is much appreciated by customers, partners and the community in which they operate.
Volatility in the worldwide container cargo environment continues to have a trickledown effect on the New Zealand market, with shipping line mergers and rationalisations still a feature.
With its reputation for operational efficiency and high container crane productivity, Port of Tauranga has managed to attract new services as well as increased business from existing lines.
Forestry exports continue to be buoyant despite the strength of the New Zealand dollar. All forecasts show continued demand from China and India, with the usual seasonal fluctuations in price.
The need for New Zealand to prepare itself for the introduction of bigger ships has not lessened and Port of Tauranga's preparations are well advanced.
Our extensive capital expenditure programme, much of it at the Sulphur Point Container Terminal, is under way. The Company spent $39 million on capital works in the 2012 financial year, and we have a capital expenditure programme of $180 million over the next three years.
The congestion challenges that the container terminal faced earlier this year with diverted cargoes from Auckland were unexpected and unplanned for. While it is impossible to predict if such an event will happen again, Port of Tauranga has moved to provide capacity headroom with our current capital expenditure programme and prioritising investments to further maximise productivity gains.
I can offer little hope that the global economic outlook will improve significantly over the next year. However, we believe that earnings growth for the Company will continue, based on the soundness of our diversification strategy and the success in attracting new business to the Port.