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Port of Tauranga has put its failed merger attempt with Ports of Auckland behind it to concentrate on a project it hopes will replicate the success of its inland port in South Auckland.
Announcing the company's annual result yesterday, chief executive Mark Cairns said the purchase of an 8ha site from Norwegian pulp and paper giant Norske Skog this week gave Port of Tauranga greater capacity for growth in its bulk business.
It also was a chance to replicate the successful MetroPort depot in South Auckland, which had driven the company's five-fold increase in container growth since it was set up in 1999.
The land was one of the last remaining large blocks close to the port and served by rail, and the acquisition created a 25.2ha block with direct access to the Mt Maunganui wharves.
Port of Tauranga had been working on negotiations to buy the site for months, Cairns said.
The company has also been investigating the widening and dredging of harbour channels to cater for a larger class of container ship, expected to be trading in New Zealand waters soon.
Cairns said the firm had spent $1.2 million evaluating the idea of merging with Ports of Auckland, which fizzled out in July. The company was not actively pursuing a merger with any port, but it believed rationalisation should happen and it would have to consider another one.
"[NZ has] to get real about ports infrastructure. We have a population the size of Sydney and as the vessels get larger we can't afford to have nine or 10 ports being container ports. [And] it's not just infrastructure in the ports, it's getting the road and rail connections into the ports."
The company yesterday announced that for the year to June 30 earnings before interest, tax and amortisation were up 14 per cent to $78 million and revenue increased 14.6 per cent to $140 million. The lift in earnings meant a 10 per cent increase in the final dividend to 14c an ordinary share, to be paid on October 5.
Net profit was up $7 million to $38m.
Dairy exports declined 65,000 tonnes or 6 per cent of total trade due to container shipping giant Maersk's November decision to put the bulk of its services through Auckland instead of Tauranga.
First New Zealand Capital analyst Rob Bode said the result was ahead of what he'd expected given the Maersk decision. The company had foreshadowed losses of up to $1 million a month in revenue from the loss of Maersk's business.
"[The result] illustrates that the company's not just a container business, it's got a very important and growing commodity business."
Trade for the year increased 3 per cent and container volume was up 10 per cent.
Log exports increased 5 per cent, sawn timber exports increased 16 and paper products increased 3. Fertiliser base imports were up 28 per cent on last year and palm kernel and grain imports were up 11. Oil product imports rose 6 per cent.
Cairns said the company had cut costs by stripping out lower-yielding cargoes, and had cut its own costs by $1 million.
Port of Tauranga chairman John Parker had a dig at Auckland Regional Holdings over the ports' aborted merger discussions, saying his company could be thankful its "enlightened" major shareholder Environment Bay of Plenty was "supportive of the port without political interference".
Port of Tauranga shares closed yesterday up 22c at $7.10.
