POAL delivers another strong result

POAL delivers another strong result

Ports of Auckland has delivered another strong financial result, with a 4% rise in after-tax surplus to $21.2 million for the half year to December 2003.

Total earnings before interest and tax (EBIT) rose 3% to $37.7 million. Earnings per share were up 4% to 20 cents.

“Ports of Auckland is a strong company underpinned by sound fundamentals,” said Chief Executive Geoff Vazey.

“The business continues to deliver consistent profits. Our focus is on core business and the ongoing growth in containerisation. Our cash flows and balance sheet are very sound and our return to shareholders continues to show healthy growth over the long term.”

Increased volumes

Container volumes were up 3% to over 344,000 TEUs (20-foot equivalent units, or the size of a standard 20-foot container) compared with the first half last year.

Mr Vazey said that the Company had signalled at last year’s results announcement that a challenging year was expected in an initially subdued climate. The strong dollar had affected the country’s exports but overall container volumes had held up well.

Auckland containerised imports continued their growth path, up 4% to over 130,000 TEUs for the half year. Full export TEUs rose 1% to over 88,000.

Business units

Port Operations EBIT rose 3% to $31.5 million during the half year.

EBIT for Investment Property and Marinas was up 27% to $5.6 million. The sale of 19 berth units at Westhaven Marina during the period contributed to the result.

Interim dividend

Directors have declared an interim ordinary dividend of 15 cents per share, the same as last year. The dividend, payable to shareholders as at 19 March 2004, is fully imputed for tax and represents approximately 75% of after-tax profits.

Trading

Auckland is New Zealand’s most balanced port, with a 60:40 ratio of full import to full export containers. This makes Auckland’s metropolitan port an attractive choice for container shipping to balance cargo flows.

January container volumes were 12% ahead of January 2002.

“Imports kept on at a high level, which is unusual. Import cargoes have traditionally eased off in January but not this year,” Mr Vazey said.

At General Wharves, breakbulk (non-containerised cargoes) again totalled 2.2 million tonnes for the half year. Imported vehicle numbers continue to make an important contribution and this is expected to continue into the future.

Bumper cruise season

The current cruise ship season is another bumper one. Through careful preparation and enthusiastic marketing, Ports of Auckland’s Marine Services team won calls by the Star Princess, the largest luxury liner to visit New Zealand.

Reduction in peak hour container trucking

Container trucking outside peak traffic hours continues to increase. Ongoing work with road transport operators and the development of inland ports are working well both for the port and for Auckland.

Containers trucked at night and on the weekends rose 28%. The proportion of containers trucked after hours as a percentage of all containers moved by truck rose from 27% to 33% - that is, a third of all container trucking now occurs outside peak commuter hours.

“This is really good news for Auckland’s freight logistics because it is helping to achieve smooth container flows. It is also great news for the city’s commuters because it is getting port-related container trucks off streets during busy times,” Mr Vazey said.

Border security

Border security remains a key issue for New Zealand seaports. Ports are required to comply with various regulations that have been introduced internationally and are being introduced locally with tight timeframes.

“Systems and processes have been reviewed and are being modified as the authorities develop the standards to be met. Importantly, these changes will enable New Zealand to continue its trading partnerships with countries around the world without interruption,” he said.

Outlook

Looking ahead, Mr Vazey said that container volumes would be affected in the short term by the recent loss of a key contract but the Company returns would be maintained through cost control, growth in containerisation and renewed marketing efforts.

He emphasised that contracts had moved from port to port over the years. The current situation was a good example of robust inter-port competition.

Mr Vazey said that the long-term strategy was to remain focused on the core skills of container handling and marine services. The Company was committed to improving New Zealand container-freight logistics and to providing superior customer service.

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