Port’s profits increase

Port of Tauranga has seen its group net profit after tax climb to $49.4 million for the six months to December 2020, a 2.3 increase on the same period the previous year.

The company says the improved performance comes despite volatile cargo volumes and supply chain congestion issues at Auckland.

Total trade volumes for the first half of the 2021 financial year fell to 13.1m tonnes, a 1.3 per cent drop from the previous year. Container numbers fell 4.6 per cent over the same time frame to 612,988 TEUs.

Imports climbed five per cent to 4.9m tonnes, while exports tumbled 4.8 per cent to 8.2m tonnes.

Revenue hit $159,5m, an increase of three per cent, due to higher income from the container terminal and 22.3 per cent rise in the earnings of subsidiaries and associate companies.

The company will pay an interim dividend of six cents per share, the same as last year’s.

David Pilkington, chairman, says the mid-year financial results are pleasing considering the volatility in cargo volumes and claims the result reflects the stability offered by the diverse companies in the group.

“We have managed to maintain income throughout a challenging six months,” he explains. 

“Port of Tauranga handled near record volumes of containers in the months of October and December. However, lower-than-previous demand from June to August, and vessel delays in November, dragged down the year-to-date container volumes.

“It’s a similar story when we look at overall cargo tonnes. Volumes decreased 1.3 per cent for the six-month period, yet volumes in December 2020 were 15.1 per cent higher than the same month in 2019.”

Congestion woes

Pilkington, pictured, notes vessel delays out of Auckland since September had flow-on impacts for Port of Tauranga.

“We have done our best to accommodate diverted import and export cargoes from Auckland,” he says. 

“However, we have had to limit our assistance as we have been constrained by the lack of availability of additional rolling stock and train drivers for the rail link between Tauranga and Auckland.”

The port reports the average cargo exchange per container vessel was 21 per cent higher in December 2020 compared with December 2019, due to the cargo bypassing Auckland.

It adds late-arriving vessels have been slow to pick up exports, adding to container yard congestion.

Mark Cairns, chief executive, warns the threat of congestion is unlikely to dissipate until Ports of Auckland “sorts out its operational problems”.

He says all parts of the supply chain need to play their part in improving terminal productivity.

“New Zealand’s ability to absorb the worldwide disruption caused by Covid-19 has been severely constrained,” adds Cairns.

Extra capacity

Port of Tauranga is seeking to boost its capacity and has applied for the Covid-19 recovery fast-track resource consenting process for a proposed berth extension at the Tauranga Container Terminal. 

Adding a fourth berth will cost $68.5m and create an estimated 368 jobs through the construction phase and more than 81 permanent jobs after completion, the port says. 

The port expects full-year earnings to be between $94m and $100m, but Cairns adds the outlook for the second half of the financial year remains uncertain.

“We are confident we are managing any congestion challenges at our locations,” he says. “However, the situation in other parts of the supply chain is far from resolved.

“Covid-19 precautions continue to have a big impact on our costs … There is still much uncertainty as to what the second six months of the year will bring, but we are confident we are in a strong position to tackle any challenges.”