Highlights
• Net Profit After Tax of $39.3 million for the six months to December 2013, compared to underlying profit1 of $39.2 million for the six months to December 2012
• Group EBITDA increased 5.5% to $71.5 million
• Overall trade increased 5.8% to 9.9 million tonnes
• Exports increased 6.6% to 6.8 million tonnes
• Imports increased 4.1% to 3.1 million tonnes
• Major expansion into the South Island announced
• Interim dividend increased 5% to 21 cents per share.
Port of Tauranga (NZX.POT), New Zealand’s largest port, today reported good progress reinforcing its position as New Zealand’s pre-eminent freight gateway and a financial result for the six months to 31 December 2013 in line with the same period in the prior year.
Port of Tauranga Chairman David Pilkington said “Port of Tauranga is very well positioned for its next phase of growth. We have again delivered a strong first half result, while our acquisition of a half share in PrimePort Timaru and our development of a freight hub in Rolleston, southwest of Christchurch, opens a new frontier of opportunities.”
“These investments coupled with the emerging strength of the New Zealand economy and strong international demand for the country’s agricultural and forestry exports will continue to drive increases in cargo volumes across our wharves.”
Reflecting this confidence, the Board has resolved to pay an interim dividend of 21 cents per share, up 5%, on the prior comparative period. The record date for entitlement to the interim dividend is 7 March and it will be paid 21 March 2014.
Group EBITDA for the period grew 5.5% to $71.5 million, from $67.7 million in the same period last year. Net Profit After Tax (NPAT) of $39.3 million was slightly ahead of the prior year’s underlying profit1 of $39.2 million. NPAT for the six months to 31 December 2012 of $74.2 million included a one-off $35.3 million gain on the sale of our stake in cargo handling group C3 Limited.
Overall trade volumes rose 5.8% to 9.9 million tonnes from 9.4 million tonnes in the prior year. The Port achieved this growth due to increases in bulk exports such as logs and bulk imports of dairy feed supplements and fertiliser, balanced by an 11.8% decrease in the number of containers handled to 381,038 TEUs (twenty foot equivalent units) from 431,878 TEUs in the comparative period. This decline reflected a 17.5% fall in dairy exports over the comparative period, however dairy volumes are expected to be greater than last year for the full year ended 30 June 2014.
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Port of Tauranga Chief Executive Mark Cairns said “Port of Tauranga has turned in another strong performance notwithstanding the loss of a major import call whilst continuing to invest in significant further infrastructure and strategic acquisitions to extend our freight catchment nationwide.”
Total imports increased by 4.1% to nearly 3.1 million tonnes from 3.0 million tonnes in the prior year. Total exports rose 6.6% to 6.8 million tonnes from 6.4 million tonnes in the comparative period.
Strategic Investment
Port of Tauranga has established a South Island presence acquiring a 50% share of PrimePort Timaru and taking over their Container Terminal operations.
“By developing Timaru into a feeder port, South Island importers and exporters will benefit from the freight savings and efficiencies offered by larger ships and the greater number of services calling at the Port of Tauranga” Mr Cairns said.
In addition to the South Island investment, Port of Tauranga continues to make significant investment in infrastructure and assets to accommodate cargo growth and the trend towards larger vessels.
A new Liebherr gantry crane, the seventh in the Tauranga Container Terminal fleet, is currently being assembled and will be commissioned in March. The Terminal set an Australasian record in productivity in the three months to 30 September 2013 (as measured by the Ministry of Transport), achieving an average net crane rate of 37.1 moves per hour, well ahead of the national average of 33.7 moves per hour. This improvement in productivity has continued into 2014 with a record average net crane of 39.4 moves per hour being achieved over January 2014.
Port of Tauranga has ordered two new 74 tonne bollard pull tug boats for delivery early in 2015. Meanwhile, our dredging project, to widen and deepen the shipping channels in Tauranga Harbour for larger ships, is in the final planning stages and work is expected to commence in the next financial year.
Subsidiaries and Associates
Whilst Quality Marshalling’s loss of the Mount log marshalling contract represents a setback, the Company remains confident in the ability of this business to contribute satisfactorily in the future and sees several areas where innovation can play a key role in delivering benefits to customers.
Northport had another solid first half with earnings up 4% on trade volumes increasing 7.6%.
Port of Tauranga subsidiary Tapper Transport Limited purchased the assets of Priority Logistics Group, a transport and logistics company based in Mount Maunganui. The acquisition was completed in July 2013 and enables Tapper Transport to expand into the Bay of Plenty market.
MetroBox, the Group’s Auckland-based container storage, handling and maintenance company, is expanding its operations and has established a new business partnership with Specialised Container Services, which operates an 11 hectare site in Mangere. The facility will now be run jointly with MetroBox’s Southdown site, adjacent to the MetroPort inland port.
The MetroPort site has also been significantly expanded with the purchase of the adjacent 6.8 hectare Gateside Industrial Park. The property includes three large industrial warehouses, an office building and more than two hectares of land.
Outlook
Overall, the Group is well positioned to capitalise on the ongoing trends of growing cargo volumes and increasing average size of vessels. Trade volumes are expected to improve over the second half of the year and provided there are no significant market changes, we expect to achieve full year earnings for the 12 months ended 30 June 2014 in the region of $77 million to $81 million.
The key difference between underlying profit and the reported profit in 2012 relates to the sale of the investment in C3 Limited, and the derivative contracts closed out that related to debt repaid from consideration received from the sale.
