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POAL delivers sound result

POAL delivers sound result

Ports of Auckland’s surplus after tax rose 2% to $21.5 million for the half year to December 2004.

“The increase in profitability is a good result in view of several factors that affected container volumes,” Chairman Neville Darrow said.

“It was achieved through the underlying strength of our container business, the growth in breakbulk volumes and careful management of costs.”

Total earnings before interest and tax (EBIT) were $35.7 million, up 1% when marinas are excluded from the prior period. The marinas were sold in May 2004.

Operational performance

Port Operations EBIT was $31.8 million. “This is very close to December 2003. Considering lower container volumes, this is an encouraging result and is evidence of the Company’s fundamental strengths,” Mr Darrow said.

Shareholder returns

Earnings per share were up 2% to 20.3 cents

An interim ordinary dividend of 15 cents per share was declared, the same as last year. The dividend is fully imputed for tax and represents approximately 75% of after-tax profits.

Acquisition of shareholding in United Containers Limited

A new initiative to benefit the supply chain in which Ports of Auckland operates was announced along with the half year results.

“The Company is acquiring a cornerstone shareholding of 27.5% in United Containers Limited, one of New Zealand’s largest container depot businesses, for approximately $3 million. We are committed to improving New Zealand logistics. This acquisition provides opportunities for better supply chain solutions for New Zealand’s importers and exporters, and for improved returns for Ports of Auckland shareholders,” Mr Darrow said.

Please see the accompanying media release on the acquisition for further information.

New shipping services to Auckland

“The Company’s commitment to service delivery and the development of key strategies has influenced three shipping lines to choose Auckland in recent months. These new services will boost our container volumes by over 35,000 TEUs a year,” Chief Executive Geoff Vazey said.

“Just before Christmas, Maersk Sealand announced that its Oceania Service would call at Auckland on its southbound leg from the US and Central America. That service is now under way.

“Then Mediterranean Shipping Company announced that a new two-ship service will call weekly at Auckland from March or April. This will enhance the trans Tasman services available via the Auckland Port. It involves 52 additional ship calls a year at Auckland,” Mr Vazey said.

“CP Ships then announced the restructure of its trans-Tasman roll-on roll-off service, which will result in the service leaving Tauranga to hub on Auckland from next month.

“Further to that, shipping services that were reconfigured to avoid congestion in the US, causing us to lose 1,000 TEU per month since November, are returning to normal,” Mr Vazey said.

Productivity

Mr Vazey said that the Company’s container terminals continued to achieve high productivity as a matter of course and repeatedly demonstrate their ability to handle peaks.

“A key global shipping line customer has recently provided us with data that proves once again that Auckland has the highest productivity levels among eight New Zealand ports. The second-highest port was 25% behind Auckland, which is a large gap,” he said.

Outlook

“In summary, the results confirm that Ports of Auckland is trading soundly and continues to achieve underlying growth,” Mr Darrow said.

“The Company faces a number of challenges, not the least of which is continuing strong competition in respect of shipping services. However, we are determined to be competitive and the Auckland Port will continue to have the necessary capacity, equipment, technology, attitude and performance to meet these challenges and to fulfil customers’ expectations.”

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. We are determined to succeed in our service offerings to customers and in our returns for shareholders,” he said.

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