Trade volumes drop

Port of Tauranga has reported a $47.2 million profit for the six months ending December 2023.

Earnings were impacted by lower overall trade volumes, especially in imported and transhipped containers, and higher operating costs including rail charges.

Total trade volumes reduced by 8.5 per cent compared with the first half of the 2023 financial year to 11.6 million tonnes – down from 12.7m. Container numbers reduced 15.8 per cent to 536,930 20-foot equivalents (TEUs).

However, log exports were boosted by the early harvesting and export of cyclone-damaged trees.

Julia Hoare, chairperson of Port of Tauranga, says the first half of 2022/23 saw a return to more normal operating conditions following a period of extreme supply-chain congestion since late 2020.

“Since March 2023, we have managed to eliminate delays at the container terminal with the gradual return to shipping schedule adherence after a long period of unreliability.

“While we were impacted by delays caused by strike action in some Australian ports during the reporting period, service delivery to our customers continues to improve with productivity rates returning to pre-Covid levels.

“Although operating revenue was affected by the reduction in storage charges, a more stable shipping schedule allows us to be much more efficient with a five per cent increase in container productivity against the previous comparable period.”

Operating revenue for the half-year was $200m for 5.6 per cent decrease from $211.9m during the previous corresponding period. Operating expenses increased by two per cent to $106.3m.

Challenging trading conditions across the broader economy impacted the port’s joint-venture and subsidiary earnings, which dropped by 34.2 per cent to $4.8m.

Capacity & capability

Port of Tauranga has received an interim decision from the Environment Court to provisionally grant resource consent for stage one of its planned Sulphur Point wharf extension. 

This involves constructing 285 metres of additional berth to the south of the port’s existing container berths and associated dredging.

The consent is subject to further matters being addressed to the satisfaction of the court, including the provision of further environmental evidence and engagement with tangata whenua.

Chief executive Leonard Sampson says the port remains committed to working closely with tangata whenua and meeting the court’s directions to provide environmental information.

“The project is a critical piece of national infrastructure to meet the needs of New Zealand importers and exporters,” he adds. “Construction will commence as soon as resource consent is obtained.”

As part of its decarbonisation strategy, Port of Tauranga has taken delivery of four more hybrid straddle carriers, which are about 25 per cent more fuel efficient than the port’s diesel-electric models. Its oldest ship-to-shore container crane has been dismantled and the components for a new crane have been delivered for assembly.

In August 2023, the port and Tainui Group Holdings officially opened stage one of the Ruakura Inland Port near Hamilton, which is linked to Auckland and Tauranga via rail.

It has unlocked efficient and lower carbon pathways to international markets for Waikato-based importers and exporters.

Looking forward

The group’s outlook for the second half of the 2024 financial year is expected to be “mixed”. Domestic economic conditions remain challenging, and international conflicts are causing shipping delays and increases in freight costs.

However, the company expects shipping schedule reliability to continue to improve and a “more consistent operating environment provides opportunities to further enhance service levels to customers, systems and processes, productivity and cargo throughput”.

Kiwifruit exports are forecast to rebound after a “challenging” 2023 season and new business opportunities created by Ruakura’s opening are “promising”.

Based on its first-half performance, the company’s guidance remains unchanged and full-year earnings are expected to be between $95m and $107m compared with $117m for 2022/23.

Highlights & challenges

• Port of Tauranga’s group net profit after tax for the six months ending December 31, 2023, were $47.2m for a 24.7 per cent decrease from $62.7m.

• Total trade: 11.6m tonnes, an 8.5 per cent drop from 12.7m tonnes.

• Container volumes: 536,930 TEUs, down by 15.8 per cent from 637,729. 

• Transhipped containers: 119,848 TEUs for a 25.1 per cent decrease due to changes in coastal shipping rotations.

• Imports: 3.9m tonnes, a 22.7 per cent decrease from 4.9m.

• Exports: 7.8m tonnes, a 0.6 per cent increase from 7.7m.

• Log exports: 3.6m tonnes, a 19.2 per cent jump from three million.

• Direct dairy exports: 949,687 tonnes, a 4.4 per cent decrease from 993,360t.

• Subsidiary and joint-venture company earnings decreased by 34.2 per cent to $4.8m.

The interim dividend was six cents per share for the half-year and ship visits came in at 674 for a 3.9 per cent decrease from 701. Container productivity increased by five per cent to an average of 30.5 moves per hour.