Port surfs strong economy

By PAM GRAHAM

Ports of Auckland yesterday posted a $21.2 million interim profit, threequarters of which will be passed on to its local body and minority shareholders.

Chief executive Geoff Vazey was giving little away on the issues of the moment - the sale of the Westhaven Marina or possible deals with a Toll Holdings-controlled Tranz Rail.

The nation's busiest port has been riding a strong economy but has signalled a more subdued year in which it has to make up for business lost to Port of Tauranga.

The profit in the six months to December 31 was up 4 per cent on the same period last year and achieved on a 3 per cent increase in container volumes.

Vazey said the port was coming off 9 per cent growth in container volumes and had not expected it to continue.

"But we're certainly not pessimistic about the future; we think there is still growth in the economy, and for us."

The port counted boxes, not the value of what was in them, so it could not measure the full impact of the high NZ dollar on the economy.

It was seeing flat export volumes and rising imports. Container imports last month were unusually strong and pushed total container volumes for the month 12 per cent ahead of last year.

New-car imports were continuing to increase the volume of break bulk cargo.

The loss of a "shoot-out" with Port of Tauranga for the New Zealand Asia Express service, which takes effect this month, showed port competition was strong and would cut income in the rest of the year by $1 million.

"We have faced this situation before and we can overcome it," said Vazey.

The company was seeking to reduce costs and find new business, and not all volume moved with a change in shipping service.

Port of Tauranga uses rail to access the Auckland market. Ports of Auckland wants to go hunting for export business from a Palmerston North base, using rail to get freight north, but has been unable to strike a deal with Tranz Rail.

Vazey said Tranz Rail's new Australian shareholder was a long-term player in New Zealand and approachable, but it was early days.

About 60,000 containers a year arrive at the port by rail, down from 80,000 four to five years ago.

A third of all container movements by truck are now outside busy commuter times.

The company declared a 15c a share interim dividend, equal to 75 per cent of after-tax profit.

The annualised return on shareholders' equity was 11.7 per cent, on a par with last year.

Operating earnings from investment property and marinas rose 27 per cent from last year compared to a 3 per cent rise in port operations. Total earnings before interest and tax were $37.7 million.

Public access to the Westhaven and the Hobson West Marinas had been secured and information memorandums sent out.

"Our agents, Bayleys, report that they are receiving active interest from a number of local parties and we expect a sale within this financial year, as planned."

Vazey said the port did not have to take the highest price but would do the best for the company. Some proceeds would be paid to shareholders.