New Zealand: Successful Year for Port of Tauranga

Port of Tauranga, New Zealand’s pre-eminent freight gateway, has reported an improved financial result for the year to 30 June 2014 and a strong outlook following a successful year extending its freight catchment across the country.

Group EBITDa increased 5.5% to $142.5 million from $135.0 million as an increase in bulk cargo transported across the Company’s wharves offset a temporary decline in container volumes. Total cargo volumes rose 3.5% to more than 19.7 million tonnes from 19.1 million tonnes a year earlier.

Reported Net Profit After Tax fell 30.2% to $78.3 million from $112.1 million a year earlier as the prior year included a $34.9 million one off gain from the sale of an associate company.

Port of Tauranga Chairman, David Pilkington, said: “The 2014 financial year represents a watershed for Port of Tauranga. During the year, we took a 50% stake in PrimePort Timaru and took control of its container terminal, began the development of a new freight hub in Christchurch and struck an alliance with freight management and logistics provider Kotahi, which will deliver up to 1.8 million export TEUs to the port over the next ten years.

“These strategic initiatives, combined with the significant investments we have made in prior years, have put in place a platform for long term growth and will deliver significant gains for importers and exporters across the country.

“Reflecting our confidence in the Port’s prospects, and our certainty over forecast container volumes following the Kotahi alliance, the Board has today declared a final dividend of 29 cents per share, lifting the full-year, fully-imputed dividend to 50 cents per share, representing an 8.7% increase over the prior year’s 46 cents per share,” Mr Pilkington said.

Financial performance

Underlying Net Profit After Tax reached a new record, rising 1.3% to $78.3 million from $77.2 million in the prior period.

Subsidiary and associate companies generally delivered strong results despite some tough challenges. Northport reported a strong financial performance on the back of log export growth. Tapper Transport performed well in a very competitive environment, while successfully integrating a new subsidiary.

Quality Marshalling had a tough year following the loss of a major contract which was put to competitive tender. The company is now rebuilding, pursuing new lines of business to replace revenue.

Port of Tauranga’s balance sheet is strong with net debt at $255 million and gearing as measured by debt-to-debt plus equity steady at 29.7%, giving plenty of capacity to fund the $50 million expected to be required to dredge Port of Tauranga’s shipping channels. This dredging is due to commence in 2015 and the alliance with Kotahi will help ensure that an acceptable return is achieved on this investment.

In the 2014 financial year, $61.1 million was invested in property, plant and equipment.

Port of Tauranga Chief Executive, Mark Cairns, said: “Port of Tauranga seeks to profitably grow cargo volumes while providing an efficient and cost effective service to our customers.

“We successfully executed a number of further strategic building blocks during the year, and we are now reaping the benefits, most notably in the form of our long term alliance with freight and logistics management company Kotahi.

“We now have the certainty to invest in the infrastructure needed to accommodate the next generation of 6,500 TEU (twenty foot equivalent unit) ships and to do so in a way that will deliver efficiencies for New Zealand shippers and appropriate returns to shareholders.

“We expect cargo volumes to increase in the coming year; reflecting: the agreement with Kotahi; the investments we are making in our freight handling infrastructure across the country and the return of the Maersk Line’s Southern Star service to the Port of Tauranga this month.”

Press Release, August 21, 2014

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