Announcement
INTERIM: POT: Port of Tauranga Posts Strong First Half Performance
08:31am
POT
18/02/2019 08:31
INTERIM
PRICE SENSITIVE
REL: 0831 HRS Port of Tauranga Limited (NS)
INTERIM: POT: Port of Tauranga Posts Strong First Half Performance
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
o Total trade increased 8.8% to nearly 13.6 million tonnes
o Container volumes grew 5.1% to 621,117 TEUs
o Group Net Profit After Tax increased 4.0%, to $49.0 million for the six
months to 31 December 2018
o Transhipment growth continued, with volumes increasing 18.9% to 174,983
TEUs
o Imports increased 5.7% from 4.7 million tonnes to almost 5.0 million tonnes
o Exports increased 10.8% from 7.7 million tonnes to 8.6 million tonnes, with
a significant increase in log exports (up 11.7%)
o 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
About Port of Tauranga:
Port of Tauranga, headquartered in the Bay of Plenty, is New Zealand's
largest port and international freight gateway. It operates wharves in
Tauranga, Mount Maunganui and Timaru, as well as MetroPort Auckland, a
rail-linked inland port in South Auckland and MetroPort Christchurch, an
intermodal freight hub in Rolleston. The Port of Tauranga Group includes:
Quality Marshalling (100% ownership), a cargo services company; Coda (50%
ownership), a freight logistics group; Northport (50% ownership), the deep
water commercial port in Whangarei; PrimePort Timaru (50% ownership), the
commercial port in Timaru; Timaru Container Terminal (50.1% ownership), which
leases and operates the terminal at Timaru; and PortConnect (50% ownership),
an online cargo management system. For more information, please visit
www.port-tauranga.co.nz
End CA:00330664 For:POT Type:INTERIM Time:2019-02-18 08:31:37
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