Ports of Auckland profit up to $37.2m

Ports of Auckland profit up to $37.2m

Ports of Auckland Ltd today announced a net profit after tax (NPAT) of $37.2m for the financial year ended 30 June 2010, compared to $5.4m in the previous financial year.

Normalised earnings* after taxation were $24.4m, up 55% (2008/09: $15.7m) which represents a return on closing shareholders’ equity of 6.1% (4.6%).

Ports of Auckland has declared a final dividend of $7.197m payable to its shareholder Auckland Regional Holdings, a subsidiary of the Auckland Regional Council This follows an interim dividend of $9.913m paid earlier in the year. Over the past 5 years, Ports of Auckland has provided net returns of $436m through dividends and in-specie distributions to ARH.

Managing Director Jens Madsen said close management of costs (down 3.1% to $113.8m) and improved container volumes through the port contributed to the strong financial result. Overall container volumes reached a new high of 867,368 TEU (twenty foot equivalent units), up nearly 3%, while full import volumes were up 4.2%.

EBITDA for the Ports of Auckland’s container division, the largest part of the Port’s business, was up 8.8% on 2008/09.

“Ports of Auckland achieved some good market gains through the year but the operating environment remains very dynamic and competitive,” Mr Madsen said. “We are handling larger vessels making fewer calls.”

“To retain this volume and to grow further, Ports of Auckland has invested in leading plant and equipment and has in place a carefully planned berth and channel dredging programme to ensure it is ready for the next generation of larger container vessel.”

Ports of Auckland is employing more part time and full time stevedores to manage peaks in demand at its container terminals while it continues to work on productivity-related initiatives.

“Maintaining a growing and successful Port on the Auckland region’s doorstep is critical to an effective and efficient New Zealand supply chain.

“Our location at the door to New Zealand’s largest market, supported by our substantial capital investment since 2003 in new plant and equipment, means we are geared to deliver for our customers now and into the future,” Mr Madsen said.

The Port’s Multi Cargo division had a solid year. Vehicle unit volumes were strong, up 17.4%, after a weak 2008/09, with the last quarter being the strongest in some time. It remains difficult to tell if this represents an ongoing trend or simply a restocking after plant and stock was rundown through the recession, Mr Madsen said.

Overall breakbulk (non-containerised) volumes were up 6.7% to 2.8m tonnes.

Sixty-two cruise ship visits were managed by the port through the year compared to 69 last year – but forward bookings of 77 visits for 2010/11 point to better times for the cruise industry, enhancing Auckland’s position as a cruise ship hub.

“Ports of Auckland is committed to supporting the cruise industry because of the benefits to New Zealand and the region. The best way to accommodate expected growth is the establishment of a cruise ship terminal on Queens Wharf,” Mr Madsen said.

Mr Madsen highlighted a series of strategic milestones achieved during the year, including the completion of consolidating the Fergusson and Bledisloe container terminal operations, the introduction of the Seafuels bunkering service, the opening of the Wiri Freight Hub rail exchange and the establishment of the CONLINXX joint venture with NZL Group to manage the Freight Hub.

Wiri container volumes increased 48.5%, while the volume of freight handled by rail increased 30.8%.

The sale of Queens Wharf, to the Auckland Regional Council and the Government, combined with a recapitalisation completed during the year and a new bank funding arrangement contributed to a $90m reduction in net debt carried by the Port, and a consequent $5.5m reduction in interest charges.

“It has been an good year financially, but it comes off a very challenging 2008/09 and volatility remains the feature of the operating environment we are in As a result our outlook for 2010/11 remains cautious,” Mr Madsen concluded.

ENDS

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