Higher costs hit port’s profit
Taranaki reporters
A combination of increased costs and reduced trade volumes has impacted Port Taranaki’s profit result for the first half of the financial year.
For the six months to December 31, 2023, the Taranaki Regional Council wholly owned port recorded a net profit after tax of $4.26 million, down from the $6.53m recorded for the corresponding six months in 2022.
However, that result was inflated by an insurance payout related to Cyclone Dovi.
For the 2023-24 half-year, total operating expenditure was up $3.26m, or 17.2%, from $18.96m to $22.22m, while total trade volume was down 170,000 tonnes, or 7.7%, from 2.22 million tonnes to 2.05 million tonnes.
“It has been a challenging first six months of the year as inflation-driven costs impact our business and the business of our customers, while at the same time trade has reduced because of a range of reasons, including production and market conditions,” Port Taranaki chief executive Simon Craddock said.
While total revenue for the half-year of $27.43m was only marginally down on the $27.74m of the previous year, the increase in total operating expenditure impacted the overall result.
“Insurance costs were up because of an increase in asset values and a general increase in the cost of insurance, maintenance dredging costs were up, personnel costs rose, depreciation increased following the completion of our $16m firewater system, and finance and professional services costs were up,” Craddock said.
“All these significant cost increases are pushing us to look closely at our business and make adjustments to reduce costs. We’re not alone, with every business dealing with inflation-driven cost increases.”
With total trade volumes down, there were 15 fewer vessel visits for the period – 126 compared with 141 for the first six months of the 2022-23 year.
A final dividend of $4.50m for the 2022-23 financial year was paid to the regional council in October. An interim dividend of $3.50m has been approved for the 2023-24 financial year.
Craddock said trading in the second half of the financial year was forecast to be at a similar level to the first half.
“Economic conditions are still mixed, and bulk liquid trade is expected to be impacted by planned maintenance outages and lower than expected output. As a result, full-year trade is projected to be below that recorded in full year 2023.”