Port of Tauranga lifts profit on choppy trade waters

Port of Tauranga says approval of a container terminal extension is vital for the economy. Photo / Supplied

Port of Tauranga achieved an 11 per increase in group net profit for the first six months of the 2023 financial year, despite a fall in total cargo volumes, notably kiwifruit exports which fell by nearly 31 per cent.

Group net profit to December was $62.7m. Operating revenue was up 13.9 per cent on the previous period to $211.9m.

The country’s biggest port and main export gateway will pay an interim dividend of 6.8c per share, up 4.6 per cent on the previous period.

Chief executive Leonard Sampson said based on the first half year performance, full year earnings were expected to be between $117 million and $124m. Full year earnings in FY2022 were $111.3m.

Weighing on the second half was economic uncertainty with predictions of a recession and the war in Ukraine, which was causing widespread disruption.

A train derailment between Kawerau and the port during the late January storms could impact annual log export volumes, depending on how long repairs took.

Weather events were also expected to impact annual primary produce export volumes, including kiwifruit.

The port faced a significant lift in rail costs, after renegotiation of contracts with KiwiRail, Sampson said. However it was hoped an expected return to shipping schedule reliability would be positive for terminal efficiency and cargo throughput.

The return of cruise ships to the Bay of Plenty and an increase in container volumes fuelled the earnings result, the NZX-listed company said.

Container volumes increased 2.5 per cent to 637,728 TEU (twenty foot equivalent), while transshipped containers, those transferred from one vessel to another at the port, rose 21.7 per cent to 174,444 TEU.

Just under 100 cruise ships were expected over the summer.

Total cargo volumes were down 2.5 per cent from the previous period at 12.7m tonnes.

Imports at 5m tonnes showed a decrease of 0.9 per cent, while exports at 7.7m tonnes were down 3.5 per cent.

Log exports at 3m tonnes were down 2.7 per cent and direct dairy exports of 0.9m tonnes showed a fall of 3.2 per cent.

Subsidiary and associate company earnings were flat, showing a 0.6 per cent increase on the previous period.

Chair Julia Hoare said the port’s diverse cargoes and varied income streams allowed it to produce a good result despite cargo volumes starting to decrease.

The impacts of continued supply chain congestion, shipping schedule unreliability, and increased operating costs had been mitigated by surcharges to incentivise smoother cargo flows and avoid excess container dwell time at the terminal, she said.

Operating costs increased 17.6 per cent.

The port’s application for a resource consent to extend the container terminal berth starts at the Environment Court next week.

Hoare said without the long-planned extension, the country’s importers and exporters were facing “severe capacity constraints”.

The development was critical to the New Zealand economy, she said.