Announcement
FLLYR: POT: POT Financial Results for the Year to 30 June 2021
08:41am
POT
27/08/2021 08:41
FLLYR
PRICE SENSITIVE
REL: 0841 HRS Port of Tauranga Limited
FLLYR: POT: POT Financial Results for the Year to 30 June 2021
Port of Tauranga Result Boosted by
Increased Trade Volumes and Strong
Subsidiary and Associate Earnings
Financial results for the year to 30 June 2021
Port of Tauranga, New Zealand's largest port, today reported Group Net Profit
After Tax of $102.4 million, a 15.4% increase, on 25.7 million tonnes of
trade.
A 14.3% increase in log exports and a 46.0% increase in Subsidiary and
Associate Company earnings were balanced by increased costs and reduced
container volumes due to supply chain congestion.
Results summary:
o Total trade increased 3.8% to 25.7 million tonnes (up from 24.8 million
tonnes)
o Container volumes decreased 4.1% to 1,200,831 TEUs (down from 1,251,741
TEUs)
o Group Net Profit After Tax increased 15.4% to $102.4 million, up from an
adjusted $88.7 million the previous year
o Subsidiary and Associate Companies' earnings of $18.6 million, a 46.0%
increase
o Final dividend of 7.5 cents per share
o Total ordinary dividend of 13.5 cents per share
o Imports increased 4.0% to 9.4 million tonnes
o Exports increased 3.6% to 16.3 million tonnes
Port of Tauranga Chair, David Pilkington, says the results are very pleasing
considering the well-documented supply chain challenges of the past year.
"As the world continues to grapple with the devastating effects of the
Covid-19 pandemic, there has been major disruption in international supply
chains. Constrained capacity in parts of the New Zealand supply chain,
especially at Ports of Auckland, has exacerbated delays and restricted our
ability to adapt quickly to the needs of importers and exporters," says Mr
Pilkington.
"International shipping capacity is in hot demand and costs for shippers have
skyrocketed."
Within this context, he says Port of Tauranga has proven to be strong and
resilient.
"Our diversity of cargoes gives us some resilience in terms of revenue, and
our long-term freight agreements with key customers give us some certainty of
cargo volumes," he says.
"However, it is not efficient to run a container terminal at more than 100%
capacity and our costs, including straddle carrier diesel use and the related
carbon emissions, have grown as a result of the congestion we have had to
endure. In recent months, we have also experienced the labour shortages felt
by many other industries."
Temporary surcharges for long-stay containers, introduced in January to
discourage inefficient cargo flows and relieve yard congestion, helped Port
of Tauranga to recover a portion of the additional costs being experienced.
Parent Company revenue increased 8.9% to $323.5 million, while operating
costs increased more than 15%.
Port of Tauranga Chief Executive, Leonard Sampson, says the Port's team and
contractors have done an outstanding job in the face of the challenges.
"The evolving response to the Covid-19 pandemic has had a significant impact
on Port of Tauranga operations. Our team has really excelled and deserves
special acknowledgement.
"We saw 106 fewer container vessel visits between September 2020 and June
2021. However, the average cargo exchange increased 21.7% due to the reduced
vessel frequency and shippers maximising available capacity," he says.
Near record surges of container volumes in the months of October and
December, compounded by constrained rail capacity, caused significant
congestion, reduced productivity and weeks-long delays transferring import
containers by rail to Auckland.
Additional trains from KiwiRail since May have eased the pressure, however
container vessels are still arriving "off window" and are being processed in
the order they arrive.
Mr Sampson says Port of Tauranga is extremely grateful for the ongoing
support of its customers, who are experiencing extraordinary disruption and
uncertainty.
"I'm really pleased that the strength of our partnerships has shone through
in these testing times," he says.
Growing capacity to ease congestion
Mr Sampson says congestion is unlikely to be resolved permanently until
vessels can return to schedule and Ports of Auckland is back operating at
full capacity. This highlights the need for Port of Tauranga to expand its
capacity to cater for future demand.
"We have applied for resource consent to extend our container berths to the
south of the existing wharves, by converting existing cargo storage land.
This $68.5 million project is a vital piece of national infrastructure if we
are to meet future cargo demand and have a resilient supply chain," he says.
"We are also pursuing our plans to automate some of the container storage at
the terminal to increase our capacity within the current land footprint. Our
capability will be further extended with the opening of the inland port at
the Ruakura Superhub near Hamilton in mid-2022."
The inland port is being developed in a 50/50 partnership with Tainui Group
Holdings.
Cargo trends
Total trade increased 3.8% compared with the previous year, growing to 25.7
million tonnes, although container numbers were 4.1% fewer at 1.2 million
TEUs.
Imports increased 4.0% to 9.4 million tonnes, and exports increased 3.6% to
16.3 million tonnes.
Log export volumes bounced back from the 2020 lockdown, increasing 14.3% to
6.3 million tonnes. Sawn timber and wood panel exports decreased 12.4% in
volume.
Dairy product exports decreased 1.9% to just over 2.3 million tonnes,
reflecting a later-than-usual season and a reduction in tranship volumes.
Kiwifruit exports increased 10.1% in volume.
Oil product imports increased 11.6% in volume, and cement imports increased
42.4% in volume, reflecting the strength in the local economy.
Fertiliser imports decreased 16.9% in volume, grain volumes decreased 8.9%
and protein and stock feed imports decreased 10.4%.
Coal imports increased significantly as a result of lower hydro energy
production and declining gas production.
People and safety
Frontline workers are subject to regular Covid-19 testing and, with
legislation introduced mid-July, are now subject to mandatory vaccination.
They must receive their first dose by 30 September, and their second dose by
4 November. Only four of Port of Tauranga's 49 eligible employees have not
yet been fully vaccinated and redeployment options are being explored for any
who do not meet the September deadline.
Port of Tauranga treats all visiting vessels as if they have Covid-19 on
board and will continue to do so. The Company strongly recommends vaccination
as an additional measure to the existing Covid-19 precautions.
While productivity has decreased due to the congestion, the overriding
concern has been for port workers' safety.
"We have made it very clear that safety must be our number one priority and
that speed should not come at safety's expense," says Mr Sampson.
Sustainability
Air and water quality continues to be a major focus for the Port. The Port
expects de-barking of export logs to continue to increase, which has the dual
benefits of reducing the need for fumigation and minimising dust and debris.
While the Port continues to comply with all of its stormwater resource
consent conditions on both sides of the harbour, we are also investigating
options for additional stormwater treatment at the Mount Maunganui wharves.
Port of Tauranga has decided, after consultation with stakeholders, to insist
that recapture technology is applied to 100% of methyl bromide fumigations on
log stacks from 1 January 2022. This is over and above any current regional
or national requirements.
Congestion in the container terminal also resulted in increased diesel
consumption from straddle carrier movements, causing a 7.0% increase in
overall carbon emissions. However, emissions intensity (emissions per cargo
tonne) increased only slightly.
Outlook
The outlook for the next financial year remains uncertain.
Mr Sampson says he is confident that Port of Tauranga has resolved land-side
congestion issues for now.
"However, the disruption to the international supply chain remains, and the
challenges in Auckland are unlikely to be resolved soon," he says.
Covid-19 precautions will continue to impact efficiency and costs as we
continue to prioritise the health and safety of our team members, their
whanau and the community. In recent months, we have witnessed a worsening
sector-wide labour shortage that could potentially have an impact on
operations.
Port of Tauranga will provide earnings guidance for the 2022 financial year
at its Annual Shareholders' Meeting on 29 October 2021.
For more information, please contact:
David Pilkington
Chair
Ph: 021 609 635
Leonard Sampson
Chief Executive
Ph: 021 281 2377
http://www.port-tauranga.co.nz/category/current-news/
End CA:00378055 For:POT Type:FLLYR Time:2021-08-27 08:41:04
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