Ports of Auckland announces $24.9m profit

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Ports of Auckland announces $24.9m profit

Ports of Auckland today announced an increased normalised profit for the 2010/11 year of $24.9m (after tax), up 2.1% on the previous year's result of $24.4m.

Port operations EBIT was up 5.3% on increased revenue, up by 7.0%. Ports of Auckland Chief Executive Tony Gibson said he was pleased with the result, which reflected the improving New Zealand economy.

Break bulk (non-containerised) cargo volumes were up 24% to 3.5m tonnes and container volumes up 27,015 or 3.1% to a new record high of 894,383 TEU (twenty-foot equivalent units).

The large increase in break bulk cargo reflected an 11.4% increase in motor vehicle volumes and a 36% increase in other commodities.

"We have seen a good recovery of volumes across all break bulk categories and have also benefited from gaining additional project cargo," Mr Gibson said. Assisted by a strong dollar, the port's container division recorded 5.9% growth in full import TEUs.

"What is particularly pleasing is that we have been able to cater for this import growth while delivering record turn times for our customers and improvements in crane rates. Dwell times of less than 1.7 days underpin the attractiveness of the Auckland port's location for importers," said Mr Gibson. Mr Gibson said the company was also delighted to see 5.3% growth in full export TEUs through its container division, off the back of a strong dairy season. The trend in recent years towards greater hubbing and trans-shipment of cargo through Ports of Auckland continued, with volumes up by 7.7% on 2009/10. Mr Gibson said the consolidation of lines services into Vessel Sharing Arrangements, thus enabling greater 'inter-service' connectivity, was a key driver of the trend.

Mr Gibson said container volumes would have been higher had a number of out-of-window ships not bypassed Auckland due to scheduling clashes. Total ship calls finished the year 13 higher than the prior year.

"The mix was quite different, with 17 additional passenger vessels, 14 additional calls to Multi-Cargo and Onehunga, and a reduction of 18 calls to the container terminals despite overall container volumes increasing," Mr Gibson said.

The cruise business continued to go from strength to strength with 79 calls over the financial year and a record high of 97 booked for the upcoming 2011/12 season, with extra business generated by the Rugby World Cup in September. Mr Gibson said the cruise handling facilities at Princes Wharf were operating near capacity with more than 200,000 cruise passengers and nearly 65,000 crew members expected over the next season.

"We are working closely with Waterfront Auckland on the development of Queens Wharf into the city's premier cruise terminal and a long-term cruise strategy for the region."

Port operating costs excluding depreciation increased compared to last year by $8.9m (9.5%). This increase was due to the consolidation of the CONLINXX accounts into Ports of Auckland's. CONLINXX commenced operation in February 2010.

Transport of containers via rail increased by 9% over 2009/10, with rail moves now representing 15% (13% in 2009/10) of total land-side moves, and further growth anticipated.

Debt levels reduced $19.1m, to $240.3m as at 30 June 2011 compared with $259.4m for 30 June 2010. Net finance costs were down on the previous year by $0.5m in line with a reduced debt level.

After a challenging year, all time best crane rates were recorded over the June quarter, contributing to an annual result up 2.4% on the previous year. June quarter rates were 4.1% up on the previous best quarter. Crane rates benefited from a substantial increase in the proportion of containers being twin-lifted and the recruitment of additional straddle drivers and lashers. Other key factors included the freeing up of space by the demolition of the SeaPack shed and expansion of the Fergusson empty container depot.

An $8.0m project to deepen and extend the northern berth at the Fergusson Container Terminal is on schedule for completion by the end of 2011. The project will allow for two ships between 3500 and 5500 TEU capacity to be worked simultaneously at the terminal, providing greater berth flexibility and capacity.

Mr Gibson said the company was currently engaged in a review of its end-to-end processes in the context of its strategic objectives.

"This analysis will take place over the next four months, and is intended to identify process improvements as well as highlight under-utilised and untapped revenue streams. The review is expected to result in increased revenues, reduced costs and further productivity gains.

Looking forward, Mr Gibson said he expected the vehicle trade to have a challenging year, as a result of the Japanese tsunami and new emissions rule. Following recent shipping line changes, the port expects overall container volumes for the new financial year to be down on 2010/11's record high. However, Mr Gibson anticipated being able to maintain revenue levels, and said container volumes for July and August 2011 were tracking ahead of expectations. "Over the next few months our focus is firmly on further enhancing productivity, lifting returns, and achieving improved labour flexibility and utilisation. Longer term, we will continue to focus on achieving earnings growth in order to provide a platform for further investment and expansion." Mr Gibson said the Ports' new company vision 'Working for Auckland' provided strong motivation for staff. A final dividend of $7.628m was paid to Auckland Council Investments on 24 August 2011.

ENDS

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