Port of Tauranga strategy leads to strong results

Port of Tauranga has left last year’s result in its wake, with a profit increase of 13 per cent to $94.3 million.

The Mount Maunganui-based company said in the year to June 30, container volumes increased 8.9 per cent to nudge 1.2 million, and overall cargo volumes rose 10.2 per cent to nearly 24.5 million tonnes.

Earnings from associates and subsidiaries lifted 11.9 per cent to $16.4m, boosted by increased volumes across all major cargoes. Revenue for the year increased 10.9 per cent to $283.7m. Group net profit after tax at $94.3m was 13 per cent up on the previous year.

Market expectations for profit were around $93.8m. The company’s guidance at its strong first half year result was for $92m-$96m profit.

The company declared a final dividend of 7c per share, taking the total ordinary dividend to 12.7c per share, an increase of 13.4 per cent on the previous year.

A special dividend of 5c per share will also be paid in line with the firm’s plan to return up to $140m to shareholders in the third year of a four-year capital restructure plan.

Transhipments increased 23.3 per cent during the year, accounting for a quarter of all container traffic through New Zealand’s busiest port, which handles 40 per cent of the country’s port container traffic.

Log volumes rose 14.3 per cent to

6.3m tonnes in the year and exports in total increased 8.2 per cent to

15.4m tonnes. Imports were up 13.7 per cent to 9m tonnes. Asset valuation increased by $226m.

Craigs Investment Partners senior research analyst Mohandeep Singh said the result was in line with expectations.

However the mix of container volumes differed from expectations with ongoing second half year transhipments growth and weaker second half growth from Metroport and via the terminal. Total second half trade volumes were weaker than forecast, Singh said.

Transhipments occur when containers are transferred from one service to another at Tauranga.

Chairman David Pilkington said the growth was a direct result of the company’s six-year investment in building capacity to accommodate larger vessels.

“We completed our capacity expansion programme in 2016 and the effects were almost immediate. We are seeing larger container vessels as well as larger bulk cargo and passenger ships,” he said.

Chief executive Mark Cairns said a ninth container crane had been ordered for delivery in 2020. The port’s container terminal now had 2634 refrigerated container (reefer) connection points, supplemented in the peak season with 12 generators each supplying power to 35 containers, he said.