Port feels commodity chill

Port of Tauranga chief executive Mark Cairns says the company has diversified during the last decade. Photo / NZME.

Rise in container business offsets fall in log trade

Port of Tauranga felt the chill wind of a commodities downturn in its result for the year to June 30, posting a modest 1 per cent improvement in net profit to $79.1 million.

The result was in line with an earnings guidance given by the company in February.

Operating revenue rose to $268.5 million from $266.5 million.

"In terms of the commodities cycles, we certainly have been affected, particularly with an 11 per cent drop-off in log exports," said chief executive Mark Cairns.

However, 12 per cent growth in the company's container business more than compensated for the decline in the log trade.

"I would like to think that over the last decade the business has diversified a lot more into being more than just a bulk commodity port," he said.

"Bulk and breakbulk are always going to be a big part of our operations, so yes [we] will be exposed to those commodities cycles, but I think that we have got a growing role in the containerised business, and we are really pleased with growth of 12 per cent," he told the Herald.

Completion of a channel-deepening project by August next year will mark a turning point in the company's history and the last part of a $350 million capital expansion.

Port of Tauranga - New Zealand's biggest port for commodity exports such as dairy products and logs - has extended its reach across the nation, aiming to become the pre-eminent hub serving what is expected to be fewer visits by larger ships.

It has awarded the contract to deepen the Tauranga Harbour channel to allow the next generation of 6500 TEU (20-foot equivalent unit) ships and extended its relationship with Kotahi, the logistics group owned by Fonterra Co-operative Group and Silver Fern Farms, in a new joint venture called Coda that will move containers and bulk cargo to and from ports and freight hubs.

Ports of Auckland this week announced plans to open a freight hub in the Bay of Plenty, near its rival's centre of operations, in a deal with logistics firm Toll Holdings and land owner Triton Pacific.

Port of Tauranga's imports rose 8 per cent to 6.9 million tonnes, driven by a 55 per cent jump in cement to 165,503 tonnes.

The company will pay a fully imputed final dividend of 30c a share on October 2, bringing total payments for the year to 52c, up from 50c in 2014.

The port's shares closed down 23c yesterday at $17.40.

Port of Tauranga

• $79.1 million net profit, up 1% for the year to June.
• $268.5 million operating revenue, up from $266.5 million.
• 13.3 million tonnes of exports, unchanged.
• 6.9 million tonnes of imports, up 8%.

- Additional reporting: BusinessDesk