Drought a boon for port
Bulk stock feed being shipped in to alleviate drought stricken farmers has given Port Taranaki’s bottom line a massive boost.
The port company announced a $6.1 million after tax profit, up 34 per cent, in the half yearly report to December 31.
‘‘This summer, as well as being hot, it has been very dry,’’ Port Taranaki chief executive Guy Roper said.
‘‘Farmers in Taranaki and surrounding regions have needed greater amounts of feed to support their stock, which has resulted in a rise in stock feed volume coming through the port.’’
‘‘The rural sector is incredibly important to the economic wellbeing of Taranaki and we are supporting their needs further by developing more storage space onsite.’’
The strong result allowed the company to pay a bigger interim dividend of $2.73m in September to sole shareholder, Taranaki Regional Council, and offset regional rates, Roper said.
A second interim payment of $2.73m is due at the end of February.
Much of the profit increase was down to total trade through the port lifting 6 per cent, to 2.85 million tonnes, from increased dry bulk, up 53 per cent, and logs, up 63 per cent.
Roper said the log sector continued to grow and develop as favourable market conditions and overseas demand for New Zealand wood remained strong.
‘‘We expect this demand to continue and are stacking logs higher and developing more storage space to accommodate this growth,’’ he said.
Total revenue was up 14 per cent, to $24.3m, on the back of a 19 per cent increase in ship visits, compared to 2016.
The port reported another record year of log volumes as market conditions and overseas demand favoured New Zealand log exports, Roper said.
However lower petrochemical production resulted in a 5 per cent drop, down 99,000 tonnes, in bulk liquid trade.
Volumes would be lower in the second half as petrochemical customers planned outages, Roper said.
Port Taranaki chairman Peter Dryden said the longer term outlook for Port Taranaki’s trade was one of more challenging conditions, with commodity prices and the weather influencing the port’s activity.
The port’s business, like farming, was often tied to the weather and recent events had contributed to increased costs, he said.
A pick-up in oil and gas exploration activity in the next financial year, with a number of companies in the advanced stages of planning, although having made no firm commitments, was a positive sign, he said.
Cost rises had been driven by increased insurance costs following damage to other ports as a result of the Kaikoura earthquake in November 2016.
Added costs were also incurred when sub tropical storms lashed the Taranaki coastline in January and February and damaged the lee breakwater and car park area.
Both areas were quickly repaired and reopened to the public, but the increased maintenance would add to costs in the second half of the year, Dryden said.
Recent progress in the port’s businesss activities during the past six months also included refurbishment of the Centennial Dr tank farm, ownership of the new tug Kinaki due to begin operating in mid 2018, third phase of a four year wharf maintenance programme, and the closure of the port’s container transfer station.