Port of Tauranga Announces Record Profit

by Press Release on 2010-08-19

Port of Tauranga has announced an increase in underlying earnings after tax to $49.403 million for the year ended 30 June 2010 - a 9.3% increase on last year.

The figure was earned on revenue of $148 million, up $4.4 million on the previous year, following the Company's decision to defer any increase in tariffs during the year.

As announced in June 2010, an unusual item of $10.5 million was incurred due to a significant change to New Zealand taxation law, and also a $2.35 million impairment to asset values which resulted in a net profit after tax of $38.016 million.

Port of Tauranga Chairman, John Parker, says the Company's diversity of income streams and cargoes, together with a strong focus on controlling costs, had helped shield it from turbulent economic times.

"I am very proud to be able to report earnings growth in 2010 in what are still difficult trading conditions," says Mr Parker.

Total trade for the year was up 2.4% to 13.748 million tonnes, comparing favourably with last year's slight decrease in tonnage of 0.5%. Exports increased more than 8% to 9.19 million tonnes.

There was a substantial increase in forestry-related exports (up 19% to 6.04 million tonnes), as well as grain and dairy food supplement imports (up 27% to 849,000 tonnes). Container volumes were down by 6.5%, mainly as a result of rationalisation of services through shipping line mergers.

Port of Tauranga significantly increased its market share in total cargo volumes to cement its position as New Zealand's largest port.

According to Statistics New Zealand data for the year ended 30 June 2010, Tauranga handled around 80% more international cargo than its nearest competitor (up from 56% last year) and three times the volume of exports.

Income from Associate Companies increased 62% or $3.15 million on last year, largely driven by the impact of forestry-related exports on Northport and C3 Limited. Port of Tauranga acquired 100% of Auckland-based Tapper Transport in March 2010.

Mr Parker says the Company continues to have one of the lowest costs of funds of any listed company in New Zealand, having renegotiated debt out to 2013-2015 at very favourable terms, despite the current economic climate.

Directors have declared a fully imputed final dividend of 20 cents per share, on top of an interim payment of nine cents per share - in total, a 7.4% increase over last year's dividend distribution.

Outlook
"While this year's profit is very pleasing, we believe the often reported economic recovery is likely to be both slow and patchy," says Mr Parker.

"We are confident that Port of Tauranga's strong financial position, with a balance sheet capacity to respond to market demands for further infrastructure development, will allow us to capitalise on all opportunities."

Based on current trade volumes, the Company expects to maintain earnings growth into the next financial year.

Port of Tauranga Chief Executive Mark Cairns says the Company has retained its market leadership as confirmed by a number of measures: trade volume, productivity and profitability.

He says the Company will continue to contain costs wherever possible while continuing to invest prudently. Larger ships calling at fewer ports, is a reality. Port of Tauranga is continuing to invest in the infrastructure necessary to accommodate larger vessels and once the appeals to the dredging consent are resolved, we will move quickly to provide the draught that these larger vessels will require.

"Our financial strength, location and transport connections make us the logical choice to be the North Island's hub port for imports and exports," he says.

"Port of Tauranga is New Zealand's Port for the Future."

For further details, contact:
Mark Cairns
Chief Executive
Port of Tauranga Limited
Ph: 07 572 8829

John Parker
Chairman
Port of Tauranga Limited
Telephone 06 364 2322
Mob: 0274 421 854