24 Feb 2006
The Port of Tauranga today advised that its net profit for the six months to 31 December 2005 was $13.62 million, a 13.8% decline on the previous first half.
On a comparative basis the operating revenue of $61.08 million was down $1.18 million on the previous first half. In the current period Toll Owens Limited was equity accounted for as a 50/50 joint venture company, whilst in the previous period as The Owens Cargo Company Limited, it was consolidated as a 100% owned subsidiary. As a result in the change in accounting treatment the revenue for Toll Owens was not recorded in the Port's Group accounts.
Total trade through the Port for the six months was 6.33 million tonnes compared with 6.56 million previously, a decrease of 3.5%. Container volume, at 210,000 TEU, was down 5.2%.
Imports were down from the same period last year, with fertiliser and oil products, in particular, lower. Against this, coal imports jumped a substantial 129,804 tonnes to 582,200 tonnes, an increase of 27.8%. Salt, grain and car imports were also up on the previous period.
Chairman John Parker says the major changes in shipping services, mergers and takeovers in recent months, in particular the merger of Maersk Sealand and P&O Nedlloyd, have created a challenging business environment for the Port.
"However, at this stage it appears there will be a positive outcome for the Port from these changes once final negotiations are concluded and the new services come on stream."
John Parker notes that during this time of change the management team will continue to focus on cost reduction to ensure the Company's operations are run in an efficient manner, while at the same time maintaining high levels of service to existing customers and continuing to work towards securing new business.
"As always, business in the second half of the year will be influenced by economic conditions and exchange rates, but the Company continues to be well placed in terms of its established infrastructure and systems.
"The challenge will be to utilise these investments by profitably growing the volume of imports and exports of bulk freight, commodities and containers that flow through the Port.
"In respect of this, management is currently progressing a number of proposals, which if successfully concluded, will attract further volume."
He says that the outlook for the Port continues to be extremely positive, given the quality of its assets, the focus of its management and staff and benefits of its land base, deep-water access and location.
Business highlights for the year included:
Exports for the six months were 3,699,300 tonnes, down slightly on the 3,776,300 tonnes recorded in the previous first half. This change reflected the absence of woodchip exports and significant decreases in sawn timber and wood panel shipments.
However, while the forestry industry continued to experience difficulties, export log volumes at 1.25 million tonnes were 5.2% higher and kiwifruit exports were up 8.4%.
Chief Executive Mark Cairns says that while it is early days in terms of the improving trend in log exports, forestry remains an important element in the future of the Port and any weakening of the New Zealand dollar and reduced freight rates will benefit this trade.
The Company expects an improvement on trading results in the second half as new shipping services consolidate in the fourth quarter.
The Company's interim dividend is unchanged from 2005 at a fully-imputed 7c a share, payable on 17 March 2006. The record date is 03 March 2006.
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