P&O worries shadow CentrePort profit

Wellington's CentrePort has posted a "best ever" profit of $7.36 million for the year to June 30, but the outlook will not be so rosy if it loses shipping giant P&O Nedlloyd as a customer.

Chief executive Ken Harris said P&O Nedlloyd was introducing bigger container ships and cutting back the number of port calls it would make in New Zealand.

The shipping line was one of CentrePort's biggest customers, bringing more than $3 million in revenue a year.

Harris said trade in the first two months of this financial year had been strong, particularly with container volumes up 18 per cent compared with the same period a year ago.

But it would be a "huge blow" to lose the P&O Nedlloyd business this year, because ports had high fixed costs and volumes were important to their profitability.

CentrePort would know in the next couple of months if P&O Nedlloyd would still be calling at Wellington after the rationalisation of its North American and European services.

Harris said the line's moves were against the trend of increasing port calls in New Zealand because New Zealand ports were efficient and reasonably low cost, and cargo volumes had been growing.

But the margins per tonne of cargo had been falling, making the volume of cargo through the port even more important.

The Wellington port's revenue grew 5 per cent to $40.4 million in the June year, from $38.4 million. After-tax profit rose 6.6 per cent to $7.36 million, from $6.9 million.

Harris said the result was pleasing given the intense competition in the port industry and came on top of strong growth of around 7 per cent a year during the past five years.

Cargo volumes hit a record 9.33 million manifest tonnes - growth of 7 per cent from the previous year's 8.69 million manifest tonnes.

More containers, cars and bulk cargoes, including logs, were put through the port in the June year.

Vehicle imports increased 24 per cent, log volumes 26 per cent, bulk liquids 10 per cent, dry bulk cargoes 5 per cent and volumes from coastal shipping grew 9 per cent.

- NZPA