Port of Tauranga Delivers a Record Half Year Result

23 February 2011
Port of Tauranga Delivers a Record Half Year Result

and Expects Growth to Continue

Highlights:

Net profit after tax for the half year to 31 December 2011 rises 22% to a record $34.6 million

Total cargo and container volumes up by 9.6% and 17.1%

Continued improvement in safety performance. The Port has one of lowest ACC claims

history in New Zealand - less than half the New Zealand port average

First stage of Tauranga Container Terminal expansion on track for completion in 2013

Growing diversity in revenue streams protects port from fluctuations in specific cargo categories

Port of Tauranga today posted a record half-year result as it consolidates its position as the country s leading freight gateway.

Revenue for the six months to December rose 14% to $105.7 million, from $92.8 million in the same period last year, while Net Profit After Tax rose 22% to $34.6 from $28.4 million, reflecting strong growth in core port operations and solid contributions from Associate and subsidiary companies.

Port of Tauranga Chairman, John Parker, says: The results are a tribute to Port of Tauranga s staff and service providers, who have responded quickly to the growth in demand due to the ongoing recognition of our reliability, productivity and competiveness and also to the short-term increase in demand in the wake of the industrial dispute at Ports of Auckland.

Trade volumes across the port over the six month period increased 9.6% to 8,505,959 tonnes, of which 43% was containerised - up from 40% in the same period last year.

Container numbers increased 17.1% to 344,081 TEUs (twenty foot equivalent units) from the same period last year. Container traffic at the Tauranga Container Terminal increased 19.4% to 322,767 TEUs.

Container traffic at MetroPort Auckland, our inland port in the heart of Auckland s industrial sector, increased by 10.8% to 80,746 TEUs, from the same period last year. As this growth is expected to continue, Port of Tauranga and KiwiRail have increased train capacity to and from Auckland.

Auckland importers and exporters recognise that by using MetroPort Auckland they can transport containers to and from their market in a timely and cost-effective way, says Port of Tauranga s Chief Executive, Mark Cairns.

Mr Cairns said Port of Tauranga had continued to deliver improved financial results accompanied by world class service and efficiency. The recent draft Productivity Commission report on International Freight Transport (released in January) found Port of Tauranga to be the highest performing port in New Zealand in terms of container productivity, also noting the Port achieved upper decile container productivity when benchmarked internationally.

Port of Tauranga s on-going investment in infrastructure will help maintain and further enhance this record, Mr Cairns says.

The first stage of the expansion of the quay at Tauranga Container Terminal, is on track for completion early in 2013. This project will extend the wharf length by 170 metres, increase berthage capacity by 28% and includes paving further land to provide additional container terminal area. It is the first development in a $150 million programme of investment planned for the next few years. A sixth container crane has been ordered for delivery in early 2013 and an existing crane has been retrofitted to allow two containers to be lifted at once.

Port of Tauranga is also working to commence dredging of the Tauranga Harbour in order to accommodate larger container ships. We were pleased by the Environment Court s recommendation to the Minister of Conservation in December that the Port be granted consent to proceed. However, two appellants have subsequently lodged an appeal to the High Court and a three day hearing has been set down for early April 2012.

Our balance sheet remains conservatively geared with liabilities to total assets at 29.9%, from 30.6% at the same time last year.

Port of Tauranga s Board has declared a 20% increase in interim dividend to 12 cents per share, fully imputed, from last year s 10 cents per share. The record date for the dividend is 9 March 2012 and will be paid on 23 March 2012.

Outlook

Port of Tauranga is well placed for the second half of the year.

In the half year, we secured six new shipping services, which is tangible recognition of our reliability and productivity. These new shipping services are expected to generate additional container volume in the current financial year and underpin volumes into the future.

Meanwhile, cruise ship visits for the 2011/2012 summer season, which make a significant contribution to Bay of Plenty s tourism industry, are expected to reach 82 - up from 56 visits last season.

The expansion of Sulphur Point, increased rail capacity linking the Terminal in Tauranga with MetroPort Auckland and the continued growth in container trans-shipments bode well for Port of Tauranga s long-term future.

In the short term, the relocation of Fonterra s upper North Island export business to Tauranga from the end of January will provide an increase to container numbers in the second half.

Forestry exports are considered likely to remain strong, buoyed by continued demand from China and India, despite the strength of the New Zealand dollar.

The growing diversity of our revenue streams, combined with our significant strategic land holdings, the strength of our balance sheet and the positive can-do culture of our staff and service providers, leave us well-placed to meet the ongoing increase in demand that we are expecting, Mr Cairns said.

Chairman John Parker says At this stage, we expect to post a full year after-tax earnings result in the region of $69 million to $72 million.

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 according to Statistics NZ data). It operates wharves at Sulphur Point and Mount Maunganui, as well as MetroPort, a rail-linked inland port in South Auckland, providing door to door service capability for Auckland customers.

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 Limited - a container packing and unpacking facility established in partnership with C3 Limited and Tapper Transport Limited MetroBox Auckland Limited - a joint venture with KiwiRail 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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