Ports of Auckland Lifts Net Profit to $13.9m

Ports of Auckland Lifts Net Profit to $13.9m

• Port operations EBIT up 4.6% despite difficult trading environment

• Interim dividend of $9.9m

Ports of Auckland has today announced a net profit after tax of $13.9m for the six months ended 31 December 2009 – up on last year’s result of $9.3m.

“The improved result is particularly pleasing because it was achieved during a period of lower trade volumes as a result of the global economic recession,” said Managing Director Jens Madsen.

“A number of long-term initiatives are beginning to pay off.”

“Over the last six months we have successfully contained costs, improved productivity and increased our upper North Island container market share, reinforcing our position as New Zealand’s leading container port.”

Mr Madsen said the period was also notable for progress on a number of strategic initiatives, including the consolidation of the port’s container operations, construction of the Wiri Inland Port rail link and transfer of the Golden Bay cement facility from Wynyard Wharf to the eastern port.

“The new Seafuels-owned Awanuia fuel tanker is also performing well, with sales of bunker fuel ahead of expectations.”

Port operations EBIT was up 4.6% despite revenue declining by 6.8% to $82m.

Operating costs (excluding depreciation) were down $6.6m or 12.9%.

At 438,438 TEU (twenty-foot equivalent units), container volumes were down 3.7% on 2008’s record high of 455,083. Mr Madsen said the global downturn had negatively impacted volumes at most ports around the world.

Vehicle imports were 62,751, up 42.4% on the first half of the calendar year, but slightly (5.6%) down on the July-December 2008 period.

Key productivity measures continued to improve, with average crane rate up 1.2% and staff hours per container down 10.6%, compared to 2008.

“The period was also notable for a continued trend to larger but fewer vessels, with shipping lines also deploying one-off ‘extra-loaders’ to cater for additional demand,” said Mr Madsen.

“We were delighted to welcome the 5,000 TEU Maersk Detroit ‘extra-loader’ in December, the largest container vessel to ever visit the country.”

Cruise ship calls over the six months, traditionally a quieter period, totaled 15. “Cruise bookings are picking up with 62 ships visiting over the financial year. With confirmation that the Pacific Pearl will be based in Auckland from late this year, calls are projected to reach a record high of 73 in 2010/11.”

Finance costs were $9.2m compared to $15.2m in 2008, primarily as a result of lower interest rates, the restructuring of the company’s balance sheet and funds generated by the sale of Queens Wharf.

Net debt levels as at 31 December 2009 were $266.3m, compared to $349.2 for 31 December 2008.

Capital expenditure was down to $5.6m compared to $7.4m during the same period in 2008.

An interim dividend of $9.9m will be paid to the shareholder Auckland Regional Holdings today, 17 February. No interim dividend was paid last year.

“While we are pleased with Ports of Auckland’s improved performance over the last six months, the company can and must do better,” said Mr Madsen.

“Further improvements to customer service, productivity and profitability are needed.”

“Fewer ship calls, larger vessels and more extra-loaders have created a trend to more intense peaks and troughs in demand, presenting the company with some service challenges. We are working with staff to improve our customer value proposition in today’s competitive market.”

The company will launch a revamped ‘track-and-trace’ container management system in March, in what it says will be an industry-leading initiative.

March will also see the formal opening of the Wiri Inland Port’s new rail link. Since 1 February the Wiri Inland Port has been operated by Ports of Auckland and NZL Group new subsidiary company, CONLINXX, and the company is pleased with customer take-up of the rail link between Wiri and the Auckland seaport.

“Rail will become an increasingly important part of the freight mix and optimising its use alongside road transport is central to the creation of a lower cost and greener supply chain.”

Overall, Mr Madsen said 2010 had begun promisingly, with January container terminal volumes up 7% on 2009, and bulk, breakbulk and vehicle volumes improving.

Chairman John Lindsay said the staff and management team of Ports of Auckland deserved congratulations for their focused performance in challenging times.

“Actions taken last year, including the restructuring of Ports of Auckland’s balance sheet and funding arrangements, have had a significant, positive impact on the company’s performance.”

“It is pleasing to see a range of operational initiatives successfully completed. We look forward to a continued drive for further improved performance and profitability in 2010.”

ENDS

© Scoop Media