Ports of Auckland posts small profit rise

UPDATE - Ports of Auckland today reported a small rise in net profit to $22 million from $21 million in the year ago period.

It will pay an unchanged, fully imputed dividend of 15cps on March 18. The company said it was buying a cornerstone shareholding in leading container depot business United Containers Ltd.

The 27.5 per cent stake, costing $3 million, is one of New Zealand's largest container depot businesses.

Chief executive Geoff Vazey said UCL was a good strategic fit.

It has container depot operations in Auckland at Panmure (two), Napier, Christchurch, and Tauranga.

It also has half ownership of container depot operations in Wellington and Christchurch, and 51 per cent of operations in Fiji.

"The acquisition moves the company into greater depth in the supply chain for containers within New Zealand," said Mr Vazey.

He said the movement of empty and full containers was inextricably linked.

"Empties are a significant part of supply chain costs. As the vast majority of imports come into Auckland the pool of empty containers originates here in Auckland and we have chosen to widen our focus to participate in this business," Mr Vazey said.

Chairman Neville Darrow said Ports of Auckland was trading soundly but faced a number of challenges, not the least of which was continuing strong competition in respect of shipping services.

Mr Vazey said that the recent shift of shipping trades to Auckland was "significant and very encouraging".

"If we lose some services we will attract others."


Revenue for the December half year dropped 6 per cent to $79.5m partly as a result of the sale of its marina division in May and pre-tax operating surplus fell slightly to $31.9m.


Earnings per share rose to 20.3cps from 20.0cps.


Total earnings before interest and tax (ebit) rose 1 per cent to $35.7m when marinas are excluded from the prior period.


Mr Darrow said that $31.8m ebit from port operations was "very encouraging" considering lower container volumes,.


He said three shipping line services had recently chosen Auckland and that was expected to boost container volumes by over 35,000 TEUs (twenty foot equivalent units) a year.


Maersk Sealand's Oceania Service would call at Auckland on its southbound leg from the US and Central America. Mediterranean Shipping Company announced a new two-ship service would call weekly at Auckland from March or April, which will enhance trans-Tasman services and CP Ships announced a restructure of its trans-Tasman roll-on roll-off service.


A loss of service to the US in November due to congestion was returning to normal.


Ports of Auckland shares rose 7c to $6.70 in a positive initial response to the result. The stock has traded between $6.45 and $7.70 in the last year.


- NZPA