Highlights:
• Total cargo up 1.2% to 10 million tonnes
• Container volumes rise 11.9% to 426,512 twenty foot equivalent container units (TEUs)
• Trans-shipped containers up 21.5% to 71,921 TEUs
• Maersk “Southern Star” service returns to Tauranga
• Parent EBITDa up 1% to $60.4 million
• Interim dividend of 22.0 cents per share up 4.8%
Port of Tauranga (NZX.POT) today reports continued consolidation of national freight traffic across its wharves, reinforcing its position as New Zealand’s pre-eminent freight gateway.
In the six months to 31 December 2014, Port of Tauranga handled 426,512 TEUs (up 11.9% on the prior year), while total cargo volumes increased 1.2% to 10 million tonnes. Meanwhile, trans-shipped containers (those transferred from one ship to another) increased by 28.9% to 71,921 TEUs at the Tauranga Container Terminal.
Revenue for the half year was $136.3 million, largely unchanged from last year’s $137.1 million, with growth in container volumes and dairy and meat exports for the most part off-setting the impact of a drop in log volumes.
Reported Net Profit for the half year rose 8.2% to $42.6 million from $39.3 million in the same period last year. Underlying profit, which excludes one-off items, fell slightly to $38.5 million from $39.3 million last year. During the period, Port of Tauranga made a $4.1 million gain relating largely to the sale of a 49.9% stake in Timaru Container Terminal to Kotahi.
Port of Tauranga Chairman, David Pilkington, said: “Port of Tauranga has delivered a strong result for the first half, despite the drop off in log volumes. The 2014 alliance we struck with Kotahi is already driving increased freight volumes through the port.
“We have also seen a strong increase in import volumes and we have new opportunities emerging on many fronts, particularly through our new South Island operations.
“Reflecting its confidence in Port of Tauranga’s prospects, the Board has today declared a fully-imputed dividend of 22.0 cents per share – up 4.8% on last year’s interim dividend of 21.0 cents per share,” Mr Pilkington said.
The record date for dividend entitlements is 6 March 2015 and the payment date is 20 March 2015
Parent EBITDA is up $0.656 million over the same period last year, demonstrating our strong cash flows. Our balance sheet is strong with a debt / debt+equity ratio of 31.4%.The Board intends to review the capital structure in FY17 once our major capital expenditure programme is completed.
Performance of Subsidiaries and Associates
Subsidiary and Associate income was $7.4 million for the six months, which is $0.2 million less than the corresponding period last year.
Cargo Trends
Imports increased 16.8% to 3.6 million tonnes compared with the same period in the prior year. Fertiliser imports grew by 19% to 325,000 tonnes, while stock feed supplements grew by 31.9% to 704,000 tonnes. Other significant increases included cement (up by 61.9% in volume to 93,000 tonnes) and dry chemicals (up 10.7% to 75,000 tonnes).
Container numbers handled grew from 381,107 TEUs to 426,512 TEUs.
Export volumes dropped by 5.9% overall to 6.4 million tonnes, largely due to a fall in log export volumes which were down 17% to 2,821,000 tonnes. Port of Tauranga expects log volumes to be similar in the six months to 30 June 2015.
Ship departures have decreased from 821 to 746, due to fewer log and container vessels.
Meanwhile, milk powder exports handled by the port increased 10.9% as new volume agreements with Kotahi took effect. Frozen meat exports increased 42.9% to 262,000 tonnes.
Kiwifruit volumes are recovering from the impact of PSA, and grew 2.9% to 336,000 tonnes compared with the previous comparative period.
Operational Developments
During the period, we made excellent progress reinforcing our position as New Zealand’s pre-eminent freight gateway.
Last year’s agreements with Kotahi are already delivering for Port of Tauranga shareholders. Following Kotahi’s container volume commitments, Maersk Line relocated its “Southern Star” service to Port of Tauranga, driving increased container traffic through the port.
Port of Tauranga’s expansion of its South Island operations continues with the granting of a resource consent to develop a 15 hectare intermodal freight hub at Rolleston, 12 kilometres south of Christchurch.
The hub will allow South Island importers and exporters to efficiently access Port of Tauranga’s container terminal at Timaru. It will enable the receipt, packing and distribution of containerised cargo and the provision of empty container depot services. Construction is underway and the facility is expected to be operational by May 2015.
Meanwhile, in March 2015, Port of Tauranga will put the dredging of the Tauranga harbour channels out to international tender. The work is scheduled to be completed by August 2016. The Port will also soon take delivery of two new tug boats capable of handling the larger vessels we expect to be regularly visiting Tauranga.
The Board today also approved the purchase of two new super post-panamax gantry cranes to provide the crane intensity needed to handle our projections of over one million TEUs once big ships commence calling in our 2017 financial year.
New Freight Alliance
Port of Tauranga today also announces the formation of a new logistics joint venture with freight and logistics management company Kotahi. Named Coda Group, the venture is designed to create leaner, more efficient pathways to and from distribution centres and key New Zealand ports. It combines Kotahi’s Dairy Transport Logistics with Port of Tauranga’s subsidiary Tapper Transport, its container packing and unpacking facility MetroPack and its 37.5% shareholding in empty container repair and storage business, MetroBox.
“Coda Group will deliver significant transport efficiencies across the supply chain by improving connectivity between freight hubs and driving freight consolidation,” Mr Cairns said.
Outlook
Port of Tauranga Group is well positioned to capitalise on the ongoing trends of larger cargo volumes being carried by increasingly larger vessels.
Trade volumes are expected to improve over the second half of the year. However, given the downturn in the forestry sector, we expect our full year underlying Group Net Profit After Tax to be in line with last year’s result.
