Port trades coal for logs

By PAM GRAHAM

Port of Tauranga, the port most exposed to a downturn in the forestry sector, yesterday posted a record annual profit, achieved on a 32 per cent increase in revenue.

The $31.2 million bottom-line profit in the year to June 30 was 20 per cent higher than last year, but it included a $2.2 million gain on the sale of assets to the North Tugz venture in Northland.

The profit allowed the port to declare a 12c a share final dividend, taking the total payout to shareholders for the year to $24.1 million, up 9.1 per cent.

But the nation's biggest export port must focus on how tough trading in the forestry sector will affect it next year. Logs accounted for 44 per cent of the port's exports last year.

Chief executive Jon Mayson said total volumes through the port in July were the second- or third-best recorded for the month, but the port would feel the pain its customers were experiencing care of the high New Zealand dollar and low commodity prices.

Carter Holt Harvey is reducing its harvest and told the port yesterday how much lower the volume would be. Mayson said an expected increase in coal imports would offset to a large degree reductions in log exports, once infrastructure to handle the coal was in place.

Genesis Power is testing the use of imported coal to supply Huntly. The company and port have discussed bringing in up to a million tonnes a year.

"While the financial year we are currently in may be impacted to some degree, over the short to medium term we should more than recover that [reduced log exports] from the coal business," Mayson said.

Markets for forest products would change, but overall he was "not too pessimistic".

The port also confirmed its management services contract with Port of Marlborough yesterday.

"It effectively positions Port of Tauranga to be involved with Marlborough, should they be looking for external equity in any project they may be considering," he said.

Shakespeare Bay, near Picton, could be an appropriate deepwater port for coal exports.

Port of Tauranga increased revenue 32 per cent to $146 million in the year to June 30.

Container volumes rose 8.5 per cent overall and they were up 26 per cent at Metroport, the company's site in South Auckland. During the year it secured the route into the Auckland market by negotiating a new contract with Tranz Rail that runs until 2013.

The port is buying a fourth crane for its container terminal.