Port of Tauranga CEO Mark Cairns wins Leadership Award

Port of Tauranga’s outstanding returns to shareholders were highlighted last night when Chief Executive Mark Cairns received the prestigious Caldwell Partners Leadership Award at the 2019 INFINZ Awards.

The INFINZ (Institute of Finance Professionals) Awards recognise innovation and excellence in the financial and capital markets sector (https://www.infinz.com/Site/INFINZAwards/​).

The expert judging panel noted Port of Tauranga’s excellent productivity rates, industry-leading safety record, increasing cargo volumes and shareholder returns that have compounded by an average 20.4 per cent since Mr Cairns took the helm. The company’s market capitalisation has grown more than six-fold to $4 billion since Mr Cairns was appointed Chief Executive in 2005.

Mr Cairns said the accolade was one to be shared by the entire Port of Tauranga team.

“It recognises the extraordinary efforts of a fantastic bunch of people working at Port of Tauranga. I am proud to accept this award on their behalf and I am privileged to lead a company that has achieved so much,” he said.

Upper North Island Supply Chain Strategy

Port of Tauranga today responded to the interim progress report on the Upper North Island Supply Chain Strategy released on Saturday.

The Chief Executive of New Zealand’s largest port (handling 43 per cent of New Zealand’s total export volumes), Mark Cairns, said the progress report raised a number of themes and issues in the port industry and New Zealand freight network.

“The progress report identifies well-known issues such as the need for increased investment in road and rail networks and the historic financial under-performance and inconsistent reporting by some ports,” he said.

“We challenge some of the facts, assumptions and implications in the interim report, and we’re hopeful these will be addressed before the next report due in June. For example, the report states that the Bay of Plenty and Waikato have benefitted from rail infrastructure and investment provided by the Government at no capital cost to the end user. This ignores the $267 million in rail costs paid by Port of Tauranga since 2010.”

“We look forward to hosting the working group on their first visit to Port of Tauranga in the coming months,” said Mr Cairns.

For further details, contact:

Mark Cairns

Chief Executive

Port of Tauranga Limited

Ph: 07 572 8829

 

http://www.port-tauranga.co.nz/category/current-news/

Port of Tauranga Posts Strong First Half Performance

18 February 2019

Port of Tauranga Posts Strong First Half Performance

FINANCIAL RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2018

Port of Tauranga (NZX.POT), New Zealand’s largest port, today reported a strong start to the 2019 financial year, with increased cargo volumes contributing to a 4.0% increase in Group Net Profit After Tax to $49.0 million.

Highlights

  • Total trade increased 8.8% to nearly 13.6 million tonnes
  • Container volumes grew 5.1% to 621,117 TEUs
  • Group Net Profit After Tax increased 4.0%, to $49.0 million for the six months to 31 December 2018
  • Transhipment growth continued, with volumes increasing 18.9% to 174,983 TEUs
  • Imports increased 5.7% from 4.7 million tonnes to almost 5.0 million tonnes
  • Exports increased 10.8% from 7.7 million tonnes to 8.6 million tonnes, with a significant increase in log exports (up 11.7%)
  • Interim dividend of 6 cents per share, up 5.3% on the previous period’s dividend.

Half year trade volumes at the country’s busiest cargo gateway grew by 8.8% overall.

Transhipment volumes, where containers are transferred from one service to another at Tauranga, continue to rise as the Port solidifies its role as an international hub.  It allows shippers from all over New Zealand to access fast and frequent connections to North Asia and South America.  Transhipments made up more than a fifth of containers handled over the six month period.

Port of Tauranga Chair, David Pilkington, said the results were very pleasing.

“Group operating profit grew 4.0% in the first half of the financial year. Tauranga is working very well as an international hub port for shippers looking to quickly and efficiently access large ship container services.

“Tauranga is the only New Zealand port that can easily accommodate these big ships and we are very pleased by the amount of transhipment occurring from other New Zealand locations as well as Australia,” said Mr Pilkington.

Bulk cargo volumes also continued to grow, driven largely by the increase in log exports but also increases in kiwifruit, meat and apple exports.

Port of Tauranga’s inland freight hub, MetroPort Auckland, handled a 3.8% increase in containers to set a new record in cargo transferred by rail to and from Auckland during the seasonal peak between October and December.

Port of Tauranga Chief Executive, Mark Cairns, said it was pleasing that KiwiRail had been able to gear up quickly to transfer shipments diverted to Tauranga due to operational issues in Auckland.

He said Port of Tauranga was continually assessing the future needs of importers and exporters to ensure we invest in a timely manner the meet the anticipated growth.

“It has been two and a half years since the successful completion of our expansion programme to accommodate larger ships,” he said.

“All evidence points to a continuing trend to larger vessels. Our strategy to create long term value for our shareholders is clearly working and we are now planning for the next stage of cargo growth,” said Mr Cairns.

A ninth container crane has been ordered for delivery in 2020 and preparations are under way to extend the container terminal quay by up to 385 metres by converting port-owned land south of the existing 770-metre quay. The Company is assessing options for increasing container storage and handling capacity.

Reconfiguration of existing wharf space is under way on both sides of the harbour to ensure efficient cargo handling.

“We also have the capacity to increase train frequency in future as required,” said Mr Cairns.

Rail is Port of Tauranga’s preferred mode of cargo transfer due to its environmental benefits and to avoid contributing to road congestion, which is an ongoing concern for Tauranga residents due to the massive population growth in the region.

“Long term value creation for our shareholders is only possible if we keep up our efforts to enhance our environmental performance, our relationships with our employees, our suppliers and our community,” said Mr Cairns.

In the six months to 31 January 2019, the Port’s use of rail avoided the equivalent of more than 300,000 truck movements.

Port of Tauranga has renewed its long-term operating agreement with Oji Fibre Solutions, New Zealand’s major manufacturer of market kraft pulps, container board and packaging products. Oji has committed to consolidating the majority of its import and export cargo volumes through Port of Tauranga for the next decade.

Cargo trends

Log exports remain buoyant on the back of strong demand from China and record international prices. Log volumes increased 11.7% to 3.7 million tonnes for the six month period, while sawn timber volumes increased 9.0%.

Kiwifruit volumes increased 30.2% compared with the previous corresponding period, with the trend continuing towards refrigerated containerisation of kiwifruit exports.

Other produce exports also grew substantially, with volumes of frozen meat increasing 17.3% and apples increasing 64.9% compared with the same period last year.

Dairy product exports remained steady, with the volumes the same as the first half of the last financial year.

Imported oil products, fertilisers, chemicals and bulk liquids remained steady or decreased slightly. Salt and grain imports increased 15.5% and 7.3% respectively.

Ship visits decreased 5.4% to 842 in the six month period but their average length continues to increase.

Subsidiary/Associate Companies

Quality Marshalling, which is 100% owned by Port of Tauranga, continues to perform well with a refreshed portfolio of cargo and service contracts. Its earnings increased 36.4% compared with the previous corresponding period.

Our Associate Companies’ earnings declined compared with the previous six month period.

Industry environment

Mr Pilkington said Port of Tauranga was pleased the Government have preserved the opt-out provisions of Multi Employer Collective Agreements (MECA) in proposed employment legislation.

“However, we are concerned about the potential impacts of the recommendations from the Fair Pay Agreement Working Group and we will be watching developments closely,” he said.

Mr Pilkington said that the likely outcome of the Government’s Upper North Island Supply Chain Study was unclear at this stage.

“We have had brief contact with the working group to date and we await their report with interest,” he said.

Outlook

Port of Tauranga is on track to deliver a strong result for the full financial year, subject to any significant change in the global trading environment and the usual cyclical fluctuations in commodity cargo volumes.

We expect our earnings to be at the upper end of the previous guidance of $96 to $101 million given at our Annual Meeting in October.

For further details, please contact:

Mark Cairns, Chief Executive                                                 David Pilkington, Chair
Port of Tauranga Limited                                                        Port of Tauranga Limited
Mob: 021 978 887                                                                   Mob:  021 609 635

2018 Interim Report
Presentation to Analysts

Oji Fibre Solutions & Port of Tauranga Renew Long Term Operating Agreement

Oji Fibre Solutions and Port of Tauranga have today confirmed their long term relationship has been extended with the renewal of their Operating Agreement for a further 10 years.

Oji Fibre Solutions is New Zealand’s major manufacturer of market kraft pulps, container board and packaging products. The company has committed to consolidating the majority of its import and export cargo volumes through Port of Tauranga for the next decade.

The agreement reflects the long and productive relationship between the two companies, dating back to the 1950s.

Murray Horne, General Manager of Oji Fibre Solutions’ logistics arm Lodestar, says the renewed agreement enables the continuation of operational synergies across the export supply chain for Oji and their associated forest products export customers.

“We continue to focus on facilitating an optimal supply chain solution for our pulp and paper mills based in the central North Island and Eastern Bay of Plenty. By utilising the infrastructure at the port, and the rail and road links to our production facilities, we deliver the most logical solution for our business” he says.

Oji leases a purpose-built, 22,000 m2 warehouse at Port of Tauranga’s container terminal. The shed was constructed by Port of Tauranga for Oji in 2017 to enable improvements in quality and greater flexibility around product storage, handling and packing.

Port of Tauranga Chief Executive, Mark Cairns, says the agreement strengthens a mutually beneficial strategic partnership and assists both companies to continue building their businesses.

“Partnerships of this nature allow both parties to plan rationally for the long-term. We value the faith that Oji continues to place in Port of Tauranga as its port for the future,” said Mr Cairns.

For further information, please contact:

Mark Cairns
Chief Executive
Port of Tauranga Limited
Ph 07 572 8829

 

Philip Millichamp
Group Manager – Environment & External relations
Oji Fibre Solutions (NZ) LimitedSwir
Ph 07 885 5629

Nga Matarae Scholarship 2019

The Trustees of Ngā Mātarae Charitable Trust are pleased to offer the Ngā Mātarae Scholarship Programme.

The Trust is a partnership between the Port and Tauranga Iwi with the primary purpose to promote the wellbeing of Te Awanui Tauranga Harbour.

Applicants intending to undertake study in a discipline that will benefit the wellbeing of the harbour and who are descendants of Tauranga Moana iwi (Ngāti Ranginui, Ngāi Te Rangi and Ngāti Pūkenga) are invited to apply.

Applications closed at midday on Wednesday 23 January 2019.

 

Port of Tauranga Investor Day – 13 November 2018

The attached presentation was prepared for the Port of Tauranga Investor Day held in Tauranga on Tuesday 13 November 2018.

Investor Day Presentation

New Zealand’s International Hub Port Sees Strong Cargo Growth in First Quarter of Financial Year

Port of Tauranga today reported first quarter trade volumes grew 8.3% on the same period last year.

From 1 July 2018 to 30 September 2018, the Port handled more than 6.6 million tonnes of cargo.

The increase was driven by log exports, which were 14.7% higher compared with the previous corresponding period, and transhipped containers, which increased 11.4% in volume.

Dairy exports decreased due to seasonal fluctuations and were 7.1% less than the same time last year.

Overall container numbers increased 0.7% for the three month period, to just under 296,000 TEU (twenty foot equivalent units).

Port of Tauranga Chief Executive, Mark Cairns, told the Company’s Annual Meeting of Shareholders today that the unaudited Group Net Profit After Tax for the first quarter was up 4.6% on the previous corresponding period.

“Based on the first quarter’s performance, and notwithstanding any significant market changes, we expect full year earnings to be between $96 million and $101 million,” said Mr Cairns. This compares with a record Net Profit After Tax of $93.4 million for the year ended June 2018.

Mr Cairns says the Port is now looking to the next stage of cargo growth and has ordered a ninth container crane for delivery in 2020. It also intends to extend its container berths south of the existing wharves on existing port-owned land.

Of its 190 hectares in landholdings, Port of Tauranga has approximately 40 hectares of land still available to accommodate cargo growth.

For further details, contact:

Mark Cairns
Chief Executive
Port of Tauranga Limited
Ph: 07 572 8829
http://www.port-tauranga.co.nz/category/current-news/

 

Chair Review
Chief Executive Review
Presentation
Meeting Results

 

 

Cargo Growth Produces Record Year for Port of Tauranga

FINANCIAL RESULTS FOR THE YEAR TO 30 JUNE 2018

Port of Tauranga’s hub port strategy is gaining momentum, with growing cargo volumes and increased transhipment driving record results in the year to 30 June 2018.

New Zealand’s largest, fastest growing and most productive port saw container volumes increase 8.9% to nearly 1.2 million TEUs[1], while overall cargo volumes increased 10.2% to almost 24.5 million tonnes.

Highlights:

  • Group Net Profit After Tax increases 13.0% to $94.3 million
  • Annual container throughput increases 8.9% to almost 1.2 million TEUs
  • Transhipment increases 23.3%, making up a quarter of all container traffic
  • Log volumes increase 14.3% to 6.3 million tonnes
  • Exports increase 8.2% to 15.4 million tonnes, while imports grow 13.7% to 9 million tonnes
  • Subsidiary and Associate earnings increase 11.9% to $16.4 million
  • Annual revenue increases 10.9% to $283.7 million
  • Asset valuation increases by $226.0 million
  • Final dividend of 7.0 cents per share brings the total ordinary dividend to 12.7 cents per share, an increase of 13.4% on the previous year. In addition, a special dividend of 5.0 cents per share will be paid.

 New Zealand’s busiest port, Port of Tauranga Limited (NZX:POT) today announced record annual earnings as freight volumes continue to increase and shippers utilise its hub port status.

Group Net Profit After Tax for the year to 30 June 2018 increased 13.0% to $94.3 million.

Good performance from our subsidiary and associate companies saw earnings lift 11.9% to $16.4 million.

The results were lifted by increased volumes across all major cargo categories, including export logs (up 14.3% in volume) and dairy products (up 4.0%).

Transhipment, where containers are transferred from one service to another at Tauranga, has grown 23.3% in the past year, demonstrating the entrenchment of the ‘hub and feeder port’ model in New Zealand.

“This growth is a direct result of Port of Tauranga’s six year investment in building capacity to accommodate larger vessels,” says Port of Tauranga’s Chair, David Pilkington.

“We completed our capacity expansion programme in 2016 and the effects were almost immediate. We are seeing larger container vessels, as well as larger bulk cargo and passenger ships,” he said.

With the fast container service connections between Tauranga and North Asia, North America and South America, shippers in Australia and New Zealand have increasingly been using Tauranga as a hub port. Containers transhipped from other New Zealand ports grew 54.7% compared with the previous year. The Port now handles 40% of all containers in New Zealand.

New Zealand’s importers and exporters are within easy reach of Port of Tauranga’s national network of ports, inland freight hubs and logistics services. The Group has interests in Northport in Whangarei and PrimePort Timaru, as well as operating inland ports at Auckland and Rolleston near Christchurch.

Dividends

The Company today announced a further special dividend of 5.0 cents per share as part of its ongoing plan to return up to $140 million to shareholders. This is the third year of a four-year capital restructure plan.

Directors have also declared a final ordinary dividend of 7.0 cents per share, taking total ordinary dividends to 12.7 cents per share, a 13.4% increase on the previous year. The record date for entitlements is 21 September 2018 and the payment date is 5 October 2018.

Shareholders have received an annual equivalent return of 22.4% since the Company listed in May 1992.

Cargo trends

Imports increased 13.7% to 9.0 million tonnes and exports increased 8.2% to 15.4 million tonnes for the year ended 30 June 2018. Total ship visits increased 5.8%.

Log exports increased 14.3% to 6.3 million tonnes. Sawn timber exports also increased 10.3% in volume. Forestry products are still fetching record prices internationally.

Dairy product exports increased 4.0% to 2.3 million tonnes. Imports of dairy industry food supplements increased 18.2%, and fertiliser imports increased 16.4%, reflecting a strong sector.

Other primary product sectors also fared well, with frozen meat exports increasing 11.3%, and apples increasing 20.9%.

Cement imports increased 18.9% while steel exports increased 25%.

Oil product imports increased 9.3% and other bulk liquids increased 39.9%.

The number of cars and other vehicles imported at Port of Tauranga doubled compared with the previous year.

Whilst kiwifruit volumes were down 5.8% due to a seasonal drop in green kiwifruit, an increasing proportion of kiwifruit are being shipped via refrigerated container. The number of TEUs increased 27.6% compared with the previous year.

Operational developments

Port of Tauranga Chief Executive, Mark Cairns, said a ninth container crane had been ordered for delivery in 2020.

Port of Tauranga’s container terminal now has 2,634 refrigerated container (reefer) connection points, which are supplemented in the peak season with 12 generators each supplying power to 35 containers.

“We believe we have the largest reefer capacity in Australasia demonstrating the significance of the volumes we are handling,” said Mr Cairns.

The Port also opened a new purpose-built coolstore at Mount Maunganui to handle kiwifruit and other chilled cargoes.

The Port maintained its industry-leading record for productivity, with a net crane rate for the year to 30 June 2018 of 35.5 moves per hour (compared with the reported national average of 33.5 moves per hour and Australian rate of 28.9 moves per hour).

Our people and their safety

Mr Cairns said the injury frequency rate among the Company’s staff reduced by 2% to 5.6 per million hours worked, whilst the Company’s contractor injury frequency rate reduced nearly 70% to 9.3 per million hours worked.

The Company has launched a wellbeing programme for all Port of Tauranga employees.

Care for the environment

Port of Tauranga has appointed an Environmental Manager and is making use of technology to reduce carbon emissions and improve energy efficiency, including introducing electric vehicles where possible.

Stormwater management is a current priority, and infrastructure improvements continue as a long-running resource consent application for the Mount Maunganui wharves is dealt with via an independent commissioner.

The Company has also undertaken a comprehensive, independent carbon emissions audit to set targets for future reductions in emissions.

We continue to support forestry industry efforts to reduce the amount of methyl bromide used at the port ahead of the 2020 deadline for 100% recapture of the fumigant. We are encouraging exporters to de-bark logs prior to arrival at the wharves to reduce the need for fumigation.

Sector and industrial relations issues

Port of Tauranga is proud of its industrial relations track record and works hard to maintain productive employment relationships with our staff and unions.  It is salient that more than 90% of our staff are shareholders in the Company.

The Company has made a submission opposing certain aspects of the Employment Relations Amendment Bill.

“Specifically, we believe the repeal of the ability for employers to opt out of Multi Employer Collective Agreement (MECA) negotiations breaches international conventions,” said Mr Cairns.

“We believe this aspect of the Bill will see a lowest common denominator outcome and will most certainly decrease productivity in the Port sector.”

Port of Tauranga continues to be concerned about the impact on New Zealand’s land transport network of further sub-economic investments being made or contemplated by other New Zealand Ports. This is not just an issue for the sector, but the economy as a whole.

capital investments are properly justified.  Port of Tauranga seeks a minimum return of 8.5% after tax on major capital investments;” said Mr Cairns.

Outlook

Port of Tauranga has commenced planning for the next stage of capacity expansion.

The Company has approximately 40 hectares of undeveloped, port-zoned land available for future expansion. There are options to extend the quay length on both sides of the harbour, using Port-owned land south of the existing berths.

Port of Tauranga operates in a complex environment with many factors outside its immediate control.

“We have implemented the policies, processes and practices we need to deliver superior customer service, economic benefit to our communities and strong returns to our shareholders,” said Mr Cairns.

“We expect cargo growth to continue in the next year across most categories, and particularly containerised cargo,” he said.

Guidance on full year earnings will be provided at the Annual Shareholder Meeting on 17 October 2018.

 For further details, please contact:

Mark Cairns, Chief Executive
Port of Tauranga Limited
Mob: 021 978 887

David Pilkington, Chair
Port of Tauranga Limited
Mob: 021 609 635

 

[1] Twenty Foot Equivalent Units, a standard measure of shipping containers

Presentation to Analysts

Tauranga Container Terminal Re-opens After Fire

Port of Tauranga’s container terminal at Sulphur Point has reopened following a large fire in a workshop and adjacent offices.

Fire and Emergency New Zealand crews were called to the port late this morning after the fire broke out. Crews quickly contained the fire to the two buildings. The terminal was temporarily closed to traffic to allow firefighters to work.

No one was injured in the blaze but the buildings were extensively damaged. The cause at this stage is undetermined, and investigations are under way.

Port of Tauranga Chief Executive, Mark Cairns, says the emergency crews and port staff involved did an outstanding job of containing the large fire.

“We are very relieved that no one was hurt.”

Port of Tauranga Announces Change to the Board of Directors

The Chair of Port of Tauranga Limited, David Pilkington, today announced the appointment of a new Director, Alison Andrew, effective 1 April 2018.

Alison is currently Chief Executive of Transpower, having joined in 2014. She has held a number of senior executive roles across various industry sectors, most recently as Global Head of Chemicals for Orica PLC. She has also been a Director for Genesis Energy. Prior to those roles, she held a number of senior roles at Fonterra Cooperative Group and across the Fletcher Challenge Group in Energy, Forests and Paper. Alison has a MBA from Warwick University, and studied Engineering (Chemicals and Materials) at Auckland University.

David Pilkington said “We are extremely pleased to welcome Alison to the Board and believe her vast range of business expertise will add strength to our Board.”

Alison Andrew replaces Bill Baylis who retired on 19 December 2017.