CentrePort 2021 Annual Result

CentrePort has recorded a positive financial result despite ongoing COVID-19 related impacts and incurring residual 2016 earthquake-related costs, Chairman Lachie Johnstone announced.

CentrePort recorded an underlying net profit after tax (NPAT) of $7.2m (this is before Kaikoura earthquake-related items, Changes in Fair Value, Abnormal Items and the tax impact of these items) compared to $14.7 million in FY20.

Operating revenue of $80.2m compared with $84.9 million the previous year reflected the absence of Cruise due to the ongoing COVID-related ban on international cruise ship visits. These visits are not anticipated to resume in FY22.

Effective cost management saw significant reductions in operating expenses from $87.5m to $73.9m, with more to be achieved in the coming year. CentrePort received the final earthquake related insurance settlement in FY20, however quake-related costs continued during the year such as road-bridging until March, and machine hire and generator costs. Cost savings less increased depreciation charges in these areas, of $2.7m will be achieved next year.

Dividends of $5m were paid to the shareholders – Greater Wellington Regional Council and Horizons Regional Council - (FY20 $5m) as well as a special dividend of $15m.

“CentrePort’s strong balance sheet and having successfully finalised the Kaikoura Earthquake claims in 2019, meant the company was in the position to pay the special dividend.

"This restores the dividend pay-out to 50 percent of underlying NPAT over the financial years spanning 2017-2020,” said Mr Johnstone.

During the year CentrePort applied for a private binding ruling from Inland Revenue to confirm the tax treatment of the Kaikoura Earthquake insurance settlement payments received in prior years. Inland Revenue has indicated that it disagrees with some tax positions taken in the Group’s 30 June 2020 financial statements. This has resulted in a prior period adjustment to income tax expense of $23.5m recognised in the current year.

CEO Derek Nind thanked CentrePort’s people for navigating another challenging year and achieving continued improvements in health and safety.

“Health and safety is a primary focus and all staff continued to take greater leadership in achieving good results in this area.

“The COVID pandemic has also created uncertainty for our people, and wellness programmes are helping support them during these difficult times.”

Mr Nind said all trade volumes were up with log exports particularly strong.

“The more than 1.8m JAS of logs exported was the highest in CentrePort’s history and a 21 percent increase on the previous year. The 194,000 JAS exported in June was the largest volume for a single month.”

Vehicles was another area of strong growth, up 21 percent on FY20, with more than 24,000 units processed through the port.

Mr Nind said despite the global logistics supply chain disruptions CentrePort maintained container volume levels.

“CentrePort worked closely with importers/exporters and shipping lines to minimise disruption for customers,” he said.

CentrePort’s regeneration continued to gather pace with a range of major initiatives achieved and/or underway.

Good progress was made on the $38.6 million Thorndon Container Wharf reinstatement project, which will increase the operational length of the gantry cranes from 126 metres to 261 metres. The project is due for completion in early 2022.

Ground-resilience improvements throughout the port continued while damaged and redundant structures were removed, creating thousands of square metres of additional operational space.

Mr Nind said implementation of the port’s carbon emissions reduction strategy finalised in August 2020 was well underway.

“We are focused on meeting our targets of reducing emissions by 30 percent by 2030 and the port being a net zero emitter by 2040,” Mr Nind said.

The partnership with New Zealand Green Investment Finance (NZGIF) enabled the procurement and roll out of seven 100 percent electric container-transfer vehicles – a first for any port in New Zealand. These units assist with lowering carbon emissions and improving operational efficiency.

The ‘enhanced rail onto port’ project, also assisted by the NZGIF facility, was competed in FY21.

Other carbon reduction activity included the introduction of electric forklifts and LED lighting.

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