Lack of cup sizzle means a steady result for Ports

By PAULA OLIVER

Ports of Auckland offset a fall in income from its marinas by increasing container volumes, the company said yesterday in revealing a steady half-year result.

The $20.9 million after-tax profit for the six months to December 31 was up 2 per cent on the previous year's $20.4 million for the half.

The result was in line with analysts' expectations.

The only blemish in an otherwise solid result was the 6 per cent fall in sales revenue to $75 million.

Chief executive Geoff Vazey blamed this on a drop in earnings from the company's marinas.

Including the exclusive Westhaven and Hobson West marinas, Ports of Auckland's property earnings fell from last year's America's Cup high of $6.9 million to $4.4 million.

Mr Vazey said the fall was countered by good growth in the core business of container services.

Volumes increased 9.5 per cent and operating costs were reduced.

Most of the company's focus is now on the long-awaited $100 million extension of its Fergusson terminal to accommodate larger ships.

Work is expected to begin next year.

The ships, a third bigger than those now docking at the port, will use an existing Fergusson berth while the extension is being built.

That berth will be dredged next year.

Although the ships are not large on a global scale, two large cranes have been bought, for $18.5 million, to handle them.

The cranes should be delivered early next year.Mr Vazey said the final part of the company's capital spending programme over the next five years was the $20 million dredging of Rangitoto Channel.

The dredging was required to allow larger ships to dock without wasting valuable time waiting for high tide.

The company said consent applications had been submitted for the project.

Mr Vazey said there was no indication that the larger ships might consider berthing at Tauranga, which also had problems with depth.

Ports chairman Neville Darrow said some market-watchers had doubted the company's plans in 1999, when one shipping line decided to move its container business out of Auckland.

But the shift towards bigger ships and fewer visits meant that some lines were now dropping regional ports.

The plan to establish Auckland as a shipping hub was still alive, said Mr Darrow.

The company was working hard to remove hurdles such as high domestic freight rates.

UBS Warburg analyst Dave Fraser said the result was "pretty positive overall and is as expected."

"They've got a strong balance sheet and are ready to go ahead with the Fergusson expansion."

Mr Fraser predicted full-year earnings of $42 million.

Ports of Auckland shares closed yesterday up 5c at $5.01.