Port of Tauranga has reported full year net profit after tax of $90 million, down $10.6m compared to the previous year.
The result was based on 24.8 million tonnes of trade for the 12 months to June 30, down 7.8% year-on-year.
Despite COVID-19 disruptions, container volumes increased 1.5% to more than 1.2 million TEUs (twenty-foot equivalent units) for the period. Transhipped containers remained nearly a third of total containers handled.
Annual revenue was down 3.6% year-on-year to $302m and the board declared a final dividend of 6.4 cents per share.
Imports decreased 7.8% to 9 million tonnes and exports decreased 8% to 15.8 million tonnes.
Port of Tauranga chair David Pilkington says the results reflect the turbulent year and are a strong performance despite an almost 22% reduction in log exports.
“Some of our customers saw record export volumes, while others were unable to operate during the lockdown,” Pilkington says.
“Port of Tauranga is New Zealand’s major international hub port so it is not surprising that we have seen the effects of the global upheaval.
“Our diversity of cargo gives us some resilience in terms of revenue, while the strength of our people and processes has really shone through in keeping New Zealand’s most efficient port operating,” he says.
The port extended its strategic alliance with New Zealand’s biggest container exporter, Kotahi, through to 2031. It has also has long-term freight volume agreements in place with other key exporters such as Oji Fibre Solutions and Zespri International.
“These long-term partnerships give Port of Tauranga certainty to plan for the future, and to expand capacity in a way that matches customer demand rather than investing speculatively,” Pilkington says.
“It’s vital to have strong relationships with our customers to ensure we have the freight volume to attract the big ship services.”
The port also formed a joint venture with Tainui Group Holdings to develop the 30 hectare Ruakura Inland Port at Hamilton. The partnership will help Waikato-based importers and exporters to easily access the direct rail link to Tauranga.
Port chief executive Mark Cairns says the team worked hard to keep essential imports and exports flowing throughout the COVID-19 lockdown.
“Our team and partners managed a record cargo exchange on the Sally Maersk container vessel during lockdown. They transferred a total of 9367 TEUs in two and a half days, obliterating the previous record exchange of just under 7000 TEUs,” Cairns says.
“We also commissioned our ninth container crane, which arrived in pieces in February and was in service just 11 weeks later.”
The port is now planning for the next stage of cargo growth and plans to add another container vessel berth to the south of the existing Sulphur Point wharves.
“We take a long-term, strategic view of our infrastructure investment to ensure we can provide importers and exporters with the facilities they will need in the future,” Cairns says.
Cargo trends
In the first half of the financial year, log volumes were hit by lower international prices and demand. By March positive signs were emerging in China, New Zealand’s major log export market, as business there returned to normal and demand increased, the company says.
However, forestry was deemed a non-essential industry during New Zealand’s level 4 lockdown from late March. Log inventory stored at the Mount Maunganui wharves could be shipped to make way for essential cargoes, but cart-in did not resume through the port gates until early May.
Overall, log volumes decreased 21.5% compared with the previous year, to 5.5 million tonnes. Sawn timber exports decreased 10.4% in volume. Pulp and paper exports increased slightly over the full year.
Dairy product exports increased 1.7% to nearly 2.4 million tonnes. Meat products increased 15.4% in volume.
Kiwifruit export volumes remained steady, with a continuing trend towards containerisation.
Imported fertilisers remained steady in volume compared with the previous year, while protein and feed imports increased 20.1% in volume. Grain imports increased 26.1% in volume.
Oil product imports decreased 12.3% in volume, reflecting the economic conditions.
Transhipment volumes remained steady, despite the overall decline in cargo volumes.
Ship visits decreased by 9.7%, from 1678 to 1515 for the year.
Outlook
Cairns says the short and medium-term impacts of the COVID-19 pandemic are still uncertain.
“We expect cargo volumes to slowly recover over the next three years, with dairy product and kiwifruit exports likely to be the strongest performers in terms of growth.
“We are still confident of growth over the long-term and, given the lead time required for any investment, we continue to pursue capacity expansion,” he says.
“Our track record means we have a strong credit rating and we believe we are well placed to weather the COVID-19 storm.”
