Port of Tauranga keeps ship steady in turbulent year

Our customers are facing the prospect of continued supply chain disruption . . . with little relief in sight. Julia Hoare, Port of Tauranga

Port of Tauranga has ridden out another year of supply chain upheaval and ships not arriving on time to deliver an 8.7 per cent lift in group net profit after tax to $111.3 million.

The company beat its earlier earning guidance of $103m-$110m.

Profit before tax was $150.3m, compared to $137m last financial year. Operating revenue rose 10.9 per cent to $375.3m.

New Zealand’s biggest port said the disruption had a “massive” impact on its ability to deliver an efficient service, and financial results for the year to June 30 reflected its allout effort to incentivise smooth cargo flows.

New chair Julia Hoare said about 65 per cent of vessels still arrived off-schedule, while operational delays continued globally and in the New Zealand supply chain, and labour shortages remained challenging.

“Our customers are facing the prospect of continued supply chain disruption and deteriorating service levels with little relief in sight,” said Hoare, who succeeded David Pilkington as chair in July.

She said the situation was made worse by berth capacity at the container terminal, and it was “incredibly frustrating” the port company was still waiting for the chance to seek a resource consent for a berth extension after nearly four years of detailed planning and consultation.

The port wants a resource consent through the Environment Court. A delayed hearing is now proposed for early March next year.

The NZX-listed port will pay a final dividend of 8.2c a share, bringing its total dividend for the FY22 year to 14.7c a share, compared to 13.5c the previous year.

Chief executive Leonard Sampson attributed the port’s diversity of cargo and longterm freight agreements with key customers to giving some certainty through “extremely challenging times”.

Container volumes increased 3.4 per cent to 1241 TEUs (twenty foot equivalents).

Imports were up 3 per cent at 9.7m tonnes while exports dipped 2.5 per cent to 15.9m tonnes. Subsidiary and associate companies’ earnings fell 16.2 per cent to $15m.

Total ship visits increased for the first time in four years, lifting by 62 or 4.7 per cent to 1369 calls.

But 26 fewer ships called at the container terminal. Volume exchanged per container vessel rose by 10.7 per cent on the prior year.

Cruise ships are scheduled to return to Tauranga mid-October after a two year absence due to the pandemic.

Log export volumes were down 4.4 per cent at 6.1m tonnes, and there were sizeable falls in dairy product and meat exports.

Dairy exports including transhipped cargo decreased 5.5 per cent and meat departures were down 9.1 per cent.

Direct kiwifruit export volumes were up 8.8 per cent, while total volumes handled, including transhipment, rose 7.9 per cent.

MetroPort container volumes increased 10.2 per cent, reflecting import cargo diverted to Tauranga to avoid delays in Auckland, the port company said.

The company hoped vessel schedule reliability would regain some consistency in the second half of FY23.

“However the pandemic hangover of high costs, increasing interest rates and reduced consumer demand is likely to temporarily impact some cargo volumes,” said Sampson.

Geopolitical pressures would also continue to affect the global supply chain.

The company would provide earnings guidance for the 2023 financial year at its annual meeting on October 28.