Ports of Auckland ramps up spending to boost capacity

Container volume in the half year was 508,262 twenty-foot equivalent units, up 3 per cent on the year-earlier figure. Picture / Brett Phibbs

Ports of Auckland has signalled a "significant" increase in capital expenditure after reporting a steady first-half net profit of $29.2 million.

The Auckland Council-owned ports company said its group revenue came to $120.6m in the six months to December 31, up 9.1 per cent on the prior corresponding period.

The dividend payable to the council came to $23.8m, down from $25.3m a year earlier. Capital expenditure in the six months increased to $70.7m from $44.9m.

Ports of Auckland said there would be significant capital expenditure to increase capacity at the Waitemata seaport and to develop Ports of Auckland's freight hubs in South Auckland and Waikato, and a corresponding increase in debt.

In the six months, container volume - in twenty-foot equivalent units - came to 508,262, up 3 per cent on the year-earlier figure.

Total general cargo volume was 3.412m tonnes, up 4.7 per cent, due to continued strong demand for vehicles, and materials to support infrastructure demand in the Auckland region.

Car volume came to 148,879 units, up 2.1 per cent.

There were 42 cruise ship calls, up 50 per cent on the year-ago figure, the rise reflecting an increase in 'spring' cruises in September and October.

Ports of Auckland chief executive Tony Gibson said the first half was one of growth.

"Ongoing growth in the Auckland region's economy and population has led to steady growth in all the cargo types we handle," Gibson said.

"This growth looks set to continue into the second half of the year, with a strong result in January and good volumes forecast for February."

The first-half profit was down a touch from $29.27m reported in the previous corresponding period as the company embarked on an investment programme to become a "future-fit" port.

"We are focussed on smart growth, with a heavy focus on technology, innovation and sustainability in addition to more traditional infrastructure investments like wharves and cranes," Gibson said.

"Auckland is growing by around 50,000 people a year and is expected to have a population of two million people by 2028," he said.

"While Auckland Council and the Government are looking at relocating Auckland's port over the next few decades, in the interim additional investment is needed so the port can handle the increased demand for freight that will come from this population growth," he said.

Since balance data, the discovery of brown marmorated stink bugs on some car carrying ships had created logistical problems at the port.

Spokesman Matt Ball said increased precautions for those ships that had berthed meant they were in the port for 30 days, compared with the normal turnaround time of 12 to 24 hours.

"So we are having to do some juggling around the berths," he said.

In the meantime, the supply of new and used cars, plus heavy machinery, was banking up on wharves in Japan, which meant still more congestion was likely in the coming weeks and months.

While the port itself was not badly affected, Ball said companies further down the supply chain were feeling the effects of disrupted supply.

This week, a fourth cargo ship was ordered to leave New Zealand waters following the discovery of stink bugs onboard.

The Glovis Caravel was ordered to leave New Zealand after the crew reported finding nearly 600 stink bugs, 12 of them alive, while the vessel was anchored near Auckland, the Ministry for Primary Industries said.

Stink bugs are a big threat to the horticulture industry, and NZIER said this week that a successful incursion could shave billions off New Zealand's GDP in the years ahead.