Port Otago has reported an improved dividend of $7.3 million to its parent Otago Regional Council for the year to end June 2016.
Group profit was recorded as $34.1 million compared to $52.4 million for 2015, though last year’s results included $27.9 million from the sale of the port’s strategic investment in the Lyttelton Port Company.
The performance came on the back of a 6% increase in export container volumes and higher investment property valuations. It wasn’t all plain sailing however, with reduced containerised imports, less cruise vessels and lower log volumes impacting the result.
“Our improved export full container volume is a very good outcome considering that one of our most important exports, dairy, was down by 5%,” said Port Otago chairman David Faulkner.
He said that it was exciting to have 87 cruise vessels confirmed for the upcoming season, including the 348 metre Ovation of the Seas which would arrive this December. “It will be a busy time for the port but also for the greater economy of the region.”
He added that a clear highlight of the year had been progress made across the $45 million ‘Next Generation’ infrastructural upgrade. “This programme will have massive benefits for our business and for exporters, allowing new generation vessels more flexibility to add more cargo and improve their efficiency because they can arrive deeper at Port Chalmers and then sail deeper too.
“Port Otago is bang on target with the other elements of this programme, including extensions to the warehouse storage capacity at both Port Chalmers and Sawyers Bay, delivery of both the tug Arihi and barge Hapuka and work now commencing on dredging to the next stage 14-metre channel depth, which should be completed by this time next year.”
Port Otago also recently announced a $15 million, 135m extension to the existing 300m multipurpose wharf at Port Chalmers.
Faulkner confirmed that tenders for that work would go out next month with construction due to start from May next year.
Port operations capital expenditure of $30.7 million, funded through cash and a $1.1 million increase in borrowings, reflected the cost of the next generation infrastructural work including channel and berth deepening of $4.7 million, warehouse expansions of $12.6 million and the purchase of the tug Arihi and barge Hapuka for a combined $8.2 million.
The company’s container throughput of 172,400 teu was slightly off prior year’s volumes, log exports from both Dunedin and Port Chalmers were at 813,000 tonnes from last year’s record 840,000 tonnes and cruise ship visits were down six from last season to 70 vessels.
Rental income from Port Otago’s property investment subsidiary Chalmers Properties Limited (CPL) contributed $14 million to revenue of $77.8 million. CPL’s portfolio was valued at $296 million, an increase of $32 million from the previous year largely as a result of a 24% increase in the Auckland portfolio to $112 million. Half the value of the portfolio, however, remains in Dunedin.
Presenting the results to the ORC yesterday Faulkner said the results had been gratifying in light of some challenging economic circumstances during the year.
“Driving all of this has been our executive management team, led by port CEO Geoff Plunket. Recently we announced Geoff’s intention to retire at the end of 2017, providing enough to time to recruit a new CEO. The board is well advanced in that process and would expect to make an announcement by November.
“Ahead of his retirement, I would like to take this opportunity on behalf of the board to thank Geoff for his leadership of the company over the past 12 years. Board member Ross Black also retired during the year, following a 21-year involvement with the company. Ross’s leadership was instrumental to the ongoing success of the port and the board wishes him well.”
