Port of Tauranga is reporting a net profit of $62.7 million for its half-year financial result, an increase of 11.3% year-on-year driven by an increase in container freight.
The result was on the back of 12.7 million tonnes of cargo volume for the six months to December 31 – a 2.5% decrease on the same period last year.
The port says its financial performance was driven by an increase in container volumes and transhipment, as well as the return of cruise ships to the Bay of Plenty.
Container volumes increased 2.5% to 637,728 TEUs for the six month period, with transhipped containers (transferred from one vessel to another at Tauranga) increasing 21.7%.
Imports were down 0.9% from the previous period to five million tonnes and exports down 3.5% to 7.7 million tonnes.
Log exports were down 2.6% to three million tonnes and direct dairy exports down 3.2% to 0.9 million tonnes.
It will pay an interim dividend of 6.8 cents per share (a 4.6% increase on the previous corresponding period).
Chief executive Leonard Sampson says intermittent delays and congestion “continued to plague” the container terminal as container vessels continue to arrive off schedule.
“Vessel bunching over the past few months has resulted in ships waiting at anchor and surges of container volumes, putting pressure on terminal capacity and efficiency.”
He said that a return to shipping schedule reliability over the coming months would alleviate terminal congestion and improve productivity.
“By reinstating adherence to proforma windows, we will be able to accurately predict container volumes and match resources accordingly. This will allow us to deliver improved efficiency and avoid delays for shipping lines and shippers,” he said.
“We have been working with other New Zealand ports to ensure that the entire network can get back on time and allow us to better plan capacity, including labour, rail and road transport,” he said.
In response to Cyclone Gabrielle, the port suspended operations for 36 hours but was fortunate to avoid any significant damage from the storm.
The port is also seeking to improve supply chain resilience by building a berth extension at the container terminal. The resource consent hearing at the Environment Court is due to begin on February 27.
The proposed container berth extension has been included in the Regional Coastal Environment Plan since 2003 and detailed planning began in 2019. It involves converting cargo storage land to the south of the existing wharves to create an additional berth.
Port chair Julia Hoare says without the development, New Zealand importers and exporters are facing severe capacity constraints.
“The development is critical to the New Zealand economy.
“The catastrophic weather events of the past few weeks have also demonstrated that New Zealand is in dire need of greater resilience and capacity in the national supply chain,” Hoare says.
Outlook for 2023
The port says the outlook for the second half of the 2023 financial year remains “uncertain”, with predictions of a recession and the ongoing conflict in Ukraine causing widespread disruption.
A derailment on the train line between Kawerau and Port of Tauranga (during the storms of late January) may have an impact on annual log export volumes, depending on the timeframe for repairs, it says. The recent weather events are also expected to impact annual volumes of primary produce, including kiwifruit.
“Compliance costs continue to rise and, following the renegotiation of contracts with KiwiRail, Port of Tauranga is facing a significant increase in rail costs.
“However, the expected return to shipping schedule reliability is expected to have a positive impact on terminal efficiency and cargo throughput,” it says.
Based on the first half performance, the company expects full year earnings to be between $117m and $124m (compared with $111.3m in the 2022 financial year).
