23 Feb 2005
Port of Tauranga has solid first half despite weaker forestry exports
The Port of Tauranga today announced a 7.1% higher net profit of $15.8 million for the six months to December 31. This was despite a continued slowdown in log exports affecting the port's own operations and those of its associated companies, the Owens Cargo Company (now Toll Owens) and Northport.
Port Chairman John Parker says the result reflects higher volumes of bulk imports (including coal), further gains in container traffic and increased non-forestry exports.
Container volumes for the half rose 19.4%, with December the second-highest month on record and 29% ahead of December 2003 with increasing volumes of containers passing through the company's MetroPort operation in Auckland.
"Total trade through the port was a record 6.6 million tonnes. Container volume, at 222,000 TEUs (20ft equivalent units), was also a record."
Business highlights for the half year included:
Mr Parker says the final result is excellent given that log exports for the half were 30% lower and wood chip exports 61% lower, pushing total exports through the port down by 7% to 3.8 million tonnes.
"Imports on the other hand were up 31% in total with oil products and fertilisers up by 21% and 38% respectively and cement also up by 38%.
"Coal imports were 54% higher at 455,000 tonnes. With our new coal handling facility now on stream we expect this higher level of imports to continue under the 15-year contract we have with Genesis Energy to handle up to 1 million tonnes of coal a year.
"The increase in imports and the lower level of exports mean imports accounted for 42% of the port's total bulk volume, bringing imports and exports nearer to a balance. In terms of containers, imports made up 48% of the total volume."
Revenue for the year was 8.8% higher at $78.4 million and EBITDA for the latest period was 5.5% higher at $36.3 million. Depreciation for the period was $630,000 higher at $6.4 million. Interim dividend has been held at 7c a share and is payable on 18 March 2005.
Mr Parker says the result and the investments made during the half are consistent with the port's long-term planned approach to the business.
"We have always invested for the medium and long-term and are confident that in the forestry area there will be a return to higher volumes.
"Our present approach in this area is to reduce our costs and lift our efficiencies. We will continue to work with the forestry sector to ensure we are well placed to benefit when export volumes and demand returns to more normal levels."
He says that prospects for the current half are good, but unknowns included decisions on where future exports of dairy product will be shipped.
Mr Parker says the other significant development has been the decision by the port's Chief Executive, Jon Mayson, to retire late in the calendar year at a mutually agreeable date.
"Jon has been with the port for 33 years and our chief executive since January 1997. He has created a strong and proven management team. His successor will inherit an organisation in solid shape with the strategic direction and partnerships necessary for its continued success and profitable growth."
Mr Parker says there will be a smooth and planned succession to the new Chief Executive and a full and rigorous selection process will take place before a new appointment is made.
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