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Port of Tauranga delivers record result

1 18 August 2011

Port of Tauranga delivers record result, cementing position as New Zealand s leading port



Highlights:

Underlying Net Profit After Tax for the year to 30 June 2011 rises 17.2% to a record $57.9 million

Trade volumes increase 12.4% to 15.4 million tonnes from 13.7 million tonnes, despite patchy economic recovery

Container volumes rise 15% to 590,506 TEUs1 Container transhipment volumes rise 52%

Final dividend of 21 cents per share, (total dividend payout up 6.9%)

Port of Tauranga Limited, New Zealand s largest port, today posted record earnings for the year to 30 June 2011 on strong cargo growth, tight cost control and solid contributions from associate companies.

Underlying Group Net Profit After Tax rose to a record $57.9 million from $49.4 million in 2010. Port of Tauranga Chairman, John Parker, said: This excellent result underscores Port of Tauranga s position as the country s pre-eminent port. Despite the patchy economic recovery, we have enjoyed strong growth in trade volumes.

Trade volumes increased by 12% from 13.7 million tonnes to more than to 15.4 million tonnes. This trade included 78% more international volume and more than three times the export volume of Port of Tauranga s nearest competitor.

Container traffic rose 15% to 590,506 TEUs from 511,343 TEUs in 2010 and now represents 40.5% of total trade through the Port of Tauranga. Growth at MetroPort, the container handling facility located in the heart of Auckland's industrial belt, was particularly strong, rising 20% to 138,000 TEUs from 115,000 TEUs in 2010.

Strong demand for New Zealand s commodity exports, particularly from Asia, and rising confidence in the dairy sector boosted break-bulk cargo volumes. Log export volumes rose to 4.4 million tonnes from 3.8 million tonnes. Fertiliser import volumes rose 64% to 530,000 tonnes from 324,000 tonnes, while grain and dairy food supplement cargoes rose 26% to 1.1 million tonnes from 849,000 tonnes.

Mr Parker said strong volume growth was combined with cost containment. Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) a measure of cash operating earnings rose 16.6% to $109 million from $93 million in 2010.

1 Twenty foot Equivalent Units

Recent research by New Zealand s Ministry of Transport confirmed Port of Tauranga to be the most productive container port in Australasia, in the top 10% of the world s most productive ports. This highlights our ability to control costs while making improvements to customer service, Mr Parker said. Port of Tauranga s five associate companies and subsidiary Tapper Transport Limited, spanning activities as diverse as on-wharf logistics and container cleaning and traditional port operations, contributed a net $12.4 million to Group Net Profit After Tax, up from $8.5 million in 2010.

MetroPack is the new container packing and unpacking facility for Auckland-based importers and exporters, established in February. We have great confidence in this joint venture with our associate company C3 Limited and subsidiary Tapper Transport Limited as it is already delivering efficiency benefits to our customers, Mr Parker said.

Directors have declared a final dividend of 21 cents per share, on top of the interim dividend of 10 cents per share - an increase of 6.9% on last year s dividend payout. During the year, Port of Tauranga has cut net debt by $12.4 million to $186.1 million, after paying $40 million in dividends and investing $21.9 million back into the port. Group gearing, as measured by debt to debt plus equity, stands at 29.3% compared with 30.1% last year. We regard this level of debt to be a prudent position in the current economic climate. The Board s policy is to maintain a strong capital base to sustain the future business development of the Group and maintain market confidence, Mr Parker said.

Outlook

Port of Tauranga Chief Executive, Mark Cairns, said that although kiwifruit volumes held up during the year, the PSA bacterial vine disease is likely to weigh on export volumes as the disease begins to harm plant productivity.

However, log export volumes have continued to strengthen over the year and the demand for New Zealand commodities looks to be robust for the foreseeable future with increased demand primarily from China and growth also coming from India.

Port of Tauranga will continue to develop its Auckland freight village at MetroPort and work with its customers to create supply chain efficiencies utilising the expertise of its multiple business units. Mark Cairns says the Company is investing in the infrastructure necessary to accommodate larger vessels and increased traffic. Five new container services have been announced for Tauranga in the past few months and transhipment volumes (cargo moved ashore from one vessel then loaded onto another vessel) increased by 52% over the year as Tauranga is used more as a hub port. This will have a positive impact on future container volumes.

Work is underway on extending the Sulphur Point Container Terminal wharf length by 170 metres and to develop additional container storage land. A sixth Liebherr gantry crane has been ordered for delivery in early 2013, along with a further four additional straddle carriers. The Company is also pleased to have reached an out of court settlement with NZL regarding the Sulphur Point Container Terminal dispute.

We will be making significant capital investments over the next few years as we continue to ensure Port of Tauranga remains New Zealand s Port for the Future, says Mr Cairns.

About Port of Tauranga

Port of Tauranga is New Zealand s largest port, handling more than 15 million tonnes of imports and exports annually (78% more international cargo than our nearest competitor and more than three times the export volumes Statistics NZ data). It operates wharves at Sulphur Point and Mount Maunganui, as well as MetroPort, a rail-linked inland port in Auckland. The Port of Tauranga Group includes: Tapper Transport Limited New Zealand s largest wharf cartage company and operator of a container freight station adjacent to MetroPort Auckland C3 Limited a joint venture with Asciano Limited and New Zealand s largest on-wharf logistics company, operating in 13 ports Northport Limited a joint venture with Northland Port Corporation, which operates a deepwater commercial port at Marsden Point

MetroPack a container packing and unpacking facility established in partnership with C3 Limited and Tapper Transport Limited MetroBox a joint venture with Pinnacle Corporation which handles container cleaning, repair and storage at MetroPort

Cubic Transport Services Limited (37.5% ownership) which specialises in moving freight within New Zealand.

ends

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