Ports of Auckland result raises ownership question

AUCKLAND: Whether Auckland Council is the best owner of the city’s port in terms of promoting its financial health is again in question given Ports of Auckland’s annual performance across most markers.

Revenue for the 2020 financial year was down 6.7% at $231.4 million, reported net profit after tax fell from $53.9 million the previous year to $23 million and cargo volumes across all classes were down.

The $4.9 million dividend it pays the city this month will be 20% of aftertax profits instead of 80%, in order to fund its investment programme for growth. The council was aware the dividend would be significantly reduced.

The port company laid the blame for the results on the impact of Covid19, its chairwoman and chief executive highlighting ‘‘a year of two halves’’ in its annual report.

But for observers, including ratepayers, it was yet another disappointing result from a major New Zealand port.

Auckland Business Chamber chief executive Michael Barnett said he believed the revenue dip reflected a supply chain issue New Zealand would see more of because of Covid19. Mr Barnett said it was time Auckland Council, and other New Zealand councils, questioned whether they should be owning billions of dollars worth of assets.

He said all councils should have been considering the question anyway, but Covid19 had accelerated the need for a rethink. The need for a local authority to own assets was a 100yearold concept, he said.

Milford Asset Management director Brian Gaynor, who recently penned a highly critical comparison analysis of Ports of Auckland’s performance against partNZX listed, part local authorityowned Port of Tauranga, said the Auckland port ‘‘continues to underperform’’ and ‘‘consistently doesn’t perform’’.

The Auckland company was much better off when part of it was in listed on the NZX and subject to private investor scrutiny, he said.

‘‘Under the sharemarket it did very well. It was reasonably dynamic and seemed to be improving under mixed publicprivate ownership. It was a lot more transparent.

Then it went back into public [council] ownership. Now it only gets looked at for one or two days a year [at financial results time].’’

The Auckland port company’s financial result is in stark contrast to that of Port of Tauranga, which also took a big hit to volumes because of Covid19.

Port of Tauranga recently posted a group net profit of $90 million for the year to June 30, compared with $100.6 million the previous year.

Auckland Mayor Phil Goff was not available for comment. The council has been approached for comment separately. — The New Zealand Herald