Ports of Auckland 1H profit growth stalls as restructuring costs offset revenue gains
By Paul McBeth
March 2 (BusinessDesk) - Ports of Auckland reported flat first-half earnings and trimmed its interim dividend payment to the city as the cost of introducing greater automation offset a 9.1 percent increase in revenue.
Net profit slipped to $29.2 million in the six months ended Dec. 31 from $29.3 million a year earlier, the Auckland port operator said in a statement. The company paid a dividend of $23.8 million for the period, down from $25.3 million a year earlier.
Ports of Auckland embarked on a transformation programme in 2016 to prepare the transport hub for a more automated future and has developed a draft 30-year master plan to prepare the operations for the future. Capital expenditure rose to $70.7 million from $44.5 million a year earlier. It will start testing its first two automated straddle carriers and has started work on automating truck handling lanes which are scheduled to go live next year.
"Despite advances in container handling technology, in many ways shipping is still a traditional industry," chief executive Tony Gibson said. "The processes behind most shipping transactions could be described as archaic, but that is set to change rapidly with the advent of technologies such as blockchain."
The port's future will be considered in a government review of the Upper North Island Supply Chain study, with a rail extension to Whangarei's Northport under consideration as an option to relocate part of Auckland's port operations out of the central city.
That review has asked KiwiRail to put forward infrastructure proposals, and Ports of Auckland today said it was working with the state-owned rail operator to see how it can shift more freight on to the rail network and off roads.
Ports of Auckland's revenue rose to $120.6 million from $110.5 million a year earlier, with container volumes up 3 percent to 508,262 and total general cargo volumes rising 4.7 percent to 3.41 million tonnes.
Gibson said that volume will probably continue in the second half of the year "with a strong result in January and good volumes forecast for February."
The port's wage bill rose 18 percent to $33.3 million, while pension costs gained 8 percent to $1.1 million and restructuring costs climbed to $213,000 from $75,000 a year earlier. Contracted services costs jumped 71 percent to $15.4 million.