Strong first half results for Port of Tauranga

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Port of Tauranga has reported a strong start to the 2019 financial year, with increased cargo volumes contributing to a four percent increase in Group Net Profit After Tax to $49.0 million. The Annual Earnings guidance was at the upper end of the previous guidance in October of $96 to $101 million.

Half year trade volumes at the country’s busiest cargo gateway grew by 8.8 percent overall.

Transhipment volumes, where containers are transferred from one service to another at Tauranga, continued to rise as the Port solidifies its role as an international hub. It allows shippers from all over New Zealand to access fast and frequent connections to North Asia and South America. Transhipments made up more than one-fifth of containers handled over the six month period to 31 January, 2019.

Bulk cargo volumes also continued to grow, driven largely by the increase in log exports, but also increases in kiwifruit, meat and apple exports.

Port of Tauranga chair David Pilkington said Tauranga was working very well as an international hub port for shippers looking to quickly and efficiently access large ship container services.

“Tauranga is the only New Zealand port that can easily accommodate these big ships and we are very pleased by the amount of transhipment occurring from other New Zealand locations as well as Australia.”

Port of Tauranga’s inland freight hub, MetroPort Auckland, handled a 3.8 percent increase in containers to set a new record in cargo transferred by rail to and from Auckland during the seasonal peak between October and December.

Port of Tauranga chief executive Mark Cairns said it was pleasing that KiwiRail had been able to gear up quickly to transfer shipments diverted to Tauranga due to operational issues in Auckland.

He said Port of Tauranga was continually assessing the future needs of importers and exporters to ensure it invested to meet the anticipated growth.

“It has been two and a half years since the successful completion of our expansion programme to accommodate larger ships,” said Carins. “All evidence points to a continuing trend to larger vessels.”

A ninth container crane has been ordered for delivery in 2020 and preparations are under way to extend the container terminal quay by up to 385 ms by converting port-owned land south of the existing 770-metre quay. The port is assessing options for increasing container storage and handling capacity. Reconfiguration of existing wharf space is under way on both sides of the harbour to ensure efficient cargo handling.

“We also have the capacity to increase train frequency in future as required,” said Cairns.

Rail is Port of Tauranga’s preferred mode of cargo transfer due to its environmental benefits and to avoid contributing to road congestion, which is an ongoing concern for Tauranga residents due to the massive population growth in the region.

“Long-term value creation for our shareholders is only possible if we keep up our efforts to enhance our environmental performance, our relationships with our employees, our suppliers and our community.”

In the six month period the port’s use of rail avoided the equivalent of more than 300,000 truck movements.

Cargo trends

Log exports remain buoyant on the back of strong demand from China and record international prices. Log volumes increased 11.7 percent to 3.7 million tonnes for the period, while sawn timber volumes increased nine percent.

Kiwifruit volumes increased 30.2 percent compared with the previous corresponding period, with the trend continuing towards refrigerated containerisation of kiwifruit exports. Other produce exports also grew substantially, with volumes of frozen meat increasing 17.3% and apples increasing 64.9 percent compared with the same period last year.

Dairy product exports remained steady, with the volumes the same as the first half of the last financial year.

Imported oil products, fertilisers, chemicals and bulk liquids remained steady or decreased slightly. Salt and grain imports increased 15.5 percent and 7.3 percent respectively.

Ship visits decreased 5.4 percent to 842 in the six month period, but their average length continues to increase.

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