FINANCIAL RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2016
Half year net profit rises to $41.9 million from $38.6 million as the country’s premier freight gateway benefits from rising cargo volumes and continues to set standards for port productivity
Highlights:
- Revenue for the six months to 31 December 2016 rises 2.8% to $125.3 million and net profit rises 8.5% to $41.9 million
- Total trade increases 8% from 10.1 million tonnes to 11.0 million tonnes for the period
- Container volumes rise 8% to 510,074 TEUs, reinforcing Port of Tauranga’s position as New Zealand’s largest container terminal
- On track to handle more than one million TEUs in the 2017 financial year – a first for a New Zealand port
- Imports increase by 7% in volume while exports increased 9% as log volumes recover
- Interim dividend of 5 cents per share – up 8.7%[1] on the prior year’s figure
New Zealand’s largest freight gateway Port of Tauranga today announced it is on track to become the first port in the country to transport more than one million containers across its wharves in a single year.
It also announced a strong 8.5% improvement in Group half year net profit to $41.9 million from $38.6 million in the same period a year ago, as half year trade volumes grew 8% to 11.0 million tonnes and the Port continued to set new national standards for port productivity.
Half year Group revenue increased 2.8% to $125.3 million.
The Port of Tauranga Board has declared an interim dividend of five cents per share – up 8.7% on the prior year’s interim dividend1. The record date is 10 March and the payment date is 24 March 2017.
Chairman David Pilkington said: “Our results show the Port of Tauranga is continuing to reinforce its position as the country’s premier freight gateway. We have lifted revenue and earnings and moved record cargo volumes including more than 510,000 TEU containers.
“Exporters, importers and the shipping lines are increasingly recognising the benefits of our deep water port and our efficient freight handling and stevedoring operations.
“In the 2017 financial year, we expect to become the first New Zealand port to handle more than one million containers in a 12 month period. This achievement is the direct result of our now-completed five-year $350 million infrastructure investment programme, which has extended the Port’s freight hinter-
land across the country, prepared the port for large ships and provided importers and exporters with highly-efficient routes to the country’s most important markets.
“Our world-class infrastructure will benefit the New Zealand economy for years to come,” Mr Pilkington said.
Chief Executive Mark Cairns said: “We are consolidating our position as the port of choice for international shipping lines, with ship visits in the six-month period rising 4% to 774 from 741 in the same period last year.
“Following the completion of our harbour dredging programme in September 2016, Maersk introduced a large vessel service, with Tauranga as its only New Zealand call. The 9,500 TEU Aotea Maersk has been a regular visitor since October.
“Meanwhile, Hamburg Sud last month announced it will introduce in March a big ship, peak season weekly service, with Tauranga as its only New Zealand call. The largest cruise ship ever to visit the Bay of Plenty – the 4,700 passenger, 1,600 crew Ovation of the Seas – also made its maiden voyage to Tauranga on Boxing Day and has made a couple of further calls since.
“It is pleasing to see shipping lines take advantage of the possibilities created by the harbour dredging programme to bring in larger vessels. The economies of scale that come with larger ships drive transport efficiencies and ensure New Zealand exporters retain direct routes to international markets.
“With bigger ships calling at Tauranga, we are handling significantly larger volumes of cargo per shipment. We continue to lead the way in setting productivity standards for the New Zealand port industry and we strive to look at all aspects of the container terminal operations to ensure that we remain cost-effective.”
Ministry of Transport (MOT) figures from the fourth quarter of the 2016 calendar year show a crane rate for the quarter of 35.9 container transfers per hour, compared with the weighted national average of 33.7 moves per hour.
“Our ship service rate was 89.8 container exchanges per hour per ship, compared with the national weighted average of 76.9. Such strong results, which rank Port of Tauranga in the top tier of Australasia’s most productive ports, are not only good for our shareholders, they are also in the best interests of the New Zealand freight industry,” Mr Cairns said.
During the half year period, Port of Tauranga invested $43.9 million in new infrastructure to further increase storage capacity and productivity. The investments included final payments on the two new gantry cranes commissioned, thirteen new straddle carriers and several property developments at the container terminal.
A new purpose-built shed is nearing completion and will be used by Oji Fibre Solutions (formerly Carter Holt Harvey) as a distribution hub, clearing the way for Oji’s former facility to be demolished and new container slots established to further enhance container terminal efficiency.
Traffic from our inland hubs continues to grow, with the numbers of containers transferred by rail between Tauranga and our MetroPort facility in Auckland increasing 20% compared with the first half of the previous financial year.
Cargo trends
Export volumes increased 9% to 7.1 million tonnes and import volumes increased 7% to 3.9 million tonnes. Overall, trade increased 8% to 11 million tonnes. Containers handled increased 8% to 510,074 TEUs. Trans-shipped containers (containers transferred between vessels at Tauranga) increased 2% to 75,583 TEUs.
Log exports rebounded from the previous corresponding period, increasing 21% in volume to nearly three million tonnes. Other forest products had mixed results, with pulp volumes up slightly (3%) to 291,000 tonnes but paper products were down 8% to 273,000 tonnes.
Dairy product exports increased 4% to 1,088,000 tonnes. Kiwifruit volumes increased 16% to just over 477,000 tonnes, a trend which is expected to continue for the next few years as the industry recovers from the PSA virus.
Other produce varied in volumes, with frozen meat exports decreasing by 25%, apples increased by 6%, and onions decreased by 23%. Oil imports increased 10% in volume.
Fertiliser imports increased 10% and there was steady growth in other import categories, such as dry chemicals (up 13%), bulk liquids (up 13%), cement (up 5%) and salt (up 14%). Food supplement imports for the dairy industry decreased 10%, and grain volumes fell close to 20%.
Subsidiary/Associate Companies
Subsidiary and Associate profits were up slightly on last year to $8.04 million. In particular, Northport, and Coda had strong performances.
Outlook
Port of Tauranga is well positioned for the remainder of the financial year and beyond. The arrival of the Hamburg Sud service in March should provide a further boost to container volumes and ensure the Company reaches the milestone of handling more than one million TEUs annually by the end of the financial year in June.
Given the strong first half result, we expect earnings for the 12 months to 30 June 2017 to be at the upper end of our previous guidance of $79 million to $83 million, provided there are no significant changes to market conditions.
For more information, please contact:
Mark Cairns, Chief Executive David Pilkington, Chairman
Mob: 021 978 887 Mob: 021 609 635
Presentation to Analysts
Interim Accounts[1] Adjusted for 5:1 share split on 17 October 2016
