Port of Tauranga is lowering its full-year profit guidance due to market uncertainty following the coronavirus outbreak.
The company says the full impact on trade from the coronavirus is yet to be determined but the logging sector has been hit the hardest.
It reduced full-year profit guidance from $96 – $101 million to $94 – $99 million as a result.
Communication with customers is ongoing and the flow-on effect is likely to vary considerably by cargo.
“Port of Tauranga continues to be well positioned to weather market fluctuations, as its customers are primarily large forest owners, who are less susceptible to commodity pricing volatility than smaller, at-wharf-gate log exporters.
“The trade outlook for the second half of the 2020 financial year remains uncertain and dependent on the duration of the market shutdown in China and any slowdown in the other countries taking extreme measures to manage the coronavirus risk,” the company says.
Meanwhile, the company has reported $48.3 million net profit after tax for the six months to December 31.
This was down 1.4% compared to the same period the previous year. It also saw cargo volumes down 4.2% to just under 13.3 million tonnes.
Log exports were down 8.4% to 3.4 million tonnes while dairy exports were up 6.3% to 1.2 million tonnes.
Imports were down by 6.7% to nearly 4.7 million tonnes and exports were down 2.6% to 8.6 million tonnes.
Container numbers increased 3.4% to 642,209 TEUs and transhipment, where cargo is transferred from one ship to another at Tauranga, increased 3.7%.
Port of Tauranga chair David Pilkington says the half-year result was a solid given the fluctuation of cargo volumes.
“Total trade was down 4.2%, but we managed to increase revenue 1.2% to $154.8 million for the six months.
“The longer-term outlook remains for cargo growth, particularly in containerised cargo, so our next stage of capacity expansion is already under way,” Pilkington says.
Port of Tauranga has also taken delivery of its ninth container crane and will extend its container terminal wharves by up to 220 metres by converting cargo storage land.
Future stages of expansion will be driven by cargo volume growth and will primarily involve rail-mounted electric stacking cranes and additional ship-to-shore cranes.
Port of Tauranga and Tainui Group Holdings plan to form a 50:50 joint venture to develop the Ruakura Inland Port at Hamilton over the next few years.
The joint venture will take a 50 year ground lease and aims to open the inland port to coincide with the completion of the nearby Hamilton section of the Waikato Expressway, currently scheduled for the end of 2021.
The 30-hectare Ruakura Inland Port is complemented by a 192 hectare logistics and industrial precinct. It follows the signing of a rail services agreement enabling Port of Tauranga cargo trains to call at the freight hub.
Port of Tauranga continues to work with the Ministry of Transport and other upper North Island ports on a report to Cabinet due in May which examines the recommendation by the Upper North Island Supply Chain Working Group that Ports of Auckland’s cargoes be shifted to Northport in Whangarei.
Port of Tauranga says it has the space and transport networks available to accommodate Auckland’s vehicle imports and other bulk cargoes. The port’s container terminal also has future capacity of up to 2.8 to 3 million TEUs with investment in stacking cranes and other technology.
