31 Oct 2005
The Port of Tauranga is in a solid position to benefit from any economic upturn in the next two to five years, retiring Chief Executive Jon Mayson told shareholders at the company's annual meeting in Tauranga today.
"The Port has no intention of dropping its alertness levels and allowing any opportunities to slip past," said Mr Mayson, who stepped aside at the meeting after leading the Port for the past nine years.
"Investments have been made in upgrading and improving the quality of the Port's working assets. Both financial and operational infrastructure issues have been addressed to ensure we are well positioned to take advantage of any improvement in market conditions."
He said these investments included a new $32 million coal handling facility that delivered financial and environmental benefits, a fourth container crane at Sulphur Point, the refurbishment of the Port's three gantry cranes and an upgrading of its straddle carrier fleet.
Other work included an extension of the rail interchange to handle 100 TEU trains, changes in the traffic management system and the purchase of new terminal tractors and trailers. On the financial side the company had successfully commissioned a new accounting and information system that provided higher-quality management information.
He said the Port's overall container traffic growth rose by 11.1% during the past year, to 438,214 TEUs and its market share continued, due in part to the success of the MetroPort operation in Auckland. Container shipments through MetroPort were 53% higher.
The slowing of the economy and the continuing struggle that exporters faced with the inflated value of the New Zealand dollar, meant the Port was now facing a plateau in growth, both in volume terms and financial performance.
This was not unique to the Port of Tauranga and all other ports were feeling the effects as well. But no port in New Zealand was better positioned across the board to grow its business when the climate changed than Tauranga.
"I remain very optimistic about our ability to remain at the forefront of New Zealand's ports industry. I am also pragmatic enough to recognise that the first three months' trading of this financial year does reflect a slowing economy and tighter trading conditions.
"Our group surplus after tax for the first quarter of the current year was 9.9% lower at $7.342 million, with trade through the port 5.6% lower at 3.2 million tonnes. Container volumes were down by 1.8% and log shipments by 2.6%.
"The group surplus for the period reflects again the impact of Northport and Toll Owens on our business but despite our current position, there are no trends in our trading that are cause for major concern."
At the meeting the company's chairman, John Parker, paid tribute to Jon Mayson on his stepping aside after 33 years with the Port, saying it was a reflection of his abilities and team approach that the company was able to find new chief executive, Mark Cairns, from within the Port's own ranks after conducting a global search for a new leader.
In the last full June year the Port earned a slightly higher net profit of $33.64 million, despite a 3.6% decline in revenue, its increased diversity of trade and import volume gains offsetting the continued downturn in forestry exports.
Mr Mayson said that the financial performances of the Port's subsidiaries were having a major impact on the overall performance of the Group.
Both Northport and Toll Owens were heavily dependent on the forestry sector at a time of difficult market conditions, ownership changes in the forestry sector, exchange rate challenges and a greatly reduced cut.
He said these subsidiaries were currently not achieving an appropriate return on investment, but both were well managed, cost-efficient operations, positioned to return to more acceptable levels of financial performance once the forestry sector rebounded, as it was expected to do over the next two to three years.
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