Port sees light at end of a difficult year
Auckland raises profit despite falling container volumes
Ports of Auckland has eked out a slight gain in underlying net profit and will pay Auckland Council a $54.3 million dividend, despite losing market share to rival Port of Tauranga.
The Auckland Council-owned Ports of Auckland said it had weathered a decline in container volume and difficult trading conditions to report a slight $1m lift in its underlying net profit to $70.6m for the June year.
Its net profit after tax came to $84m, up $21m on last year, with revenue of $211.1 million, down $7.2m.
The Auckland Council-owned company declared a dividend of $54.3m for the 2015/16 financial year, up from $41.7m last year.
The dividend payable to the city was worth the equivalent of 4.4 per cent of the average Auckland residential rates bill, or $103 per household.
Ports of Auckland is a hub for car and container imports. The port handles around 100 cruise ships annually and each ship visit is worth about $1.5m to the local economy.
Container volumes were down 6.7 per cent to 907,099 TEU (twenty foot equivalent units). Port of Tauranga last week reported a 12.1 per cent lift in its container volumes to just over 950,000 TEUs.
The company said its light commercial vehicle volumes were up by 1.7 per cent to 248,065 units.
Chief executive Tony Gibson said the port had been operating in a difficult market environment.
“We thought it was going to be a tough year, and so it proved, but we still increased profit and dividend,” Gibson said.
Lower iron and steel prices resulted in significantly lower iron sand exports. While this was partially offset by increased cement throughput due to Auckland’s booming construction sector, bulk volumes were down 5.5 per cent.
However, imports of cars, light commercial vehicles and “high & heavy” vehicles increased, keeping the total fall in bulk and break-bulk volumes to just 2.2 per cent and Gibson said he expected to similar volumes in the current financial year.
He said the container industry was facing ongoing difficulties caused by ship construction outstripping trade growth.
“The resulting overcapacity has led to a significant reorganisation of shipping services internationally, which is also affecting ports,” he said.
Twelve of the world’s top 30 ports have reported volume reductions this year, Gibson said.
“In New Zealand, the changes have resulted in volume leaving Auckland.” Global container throughput is expected to grow by only 0.3 per cent this year while shipping capacity will increase by 4.6 per cent.
“We are expecting our container volumes to be flat or fall this financial year,” he said.
Looking ahead, Gibson said the company would continue to build its freight hub network.