Ports of Auckland Annual Results

Wednesday 31st August 2022

This has been a year in which we have started to rebuild the foundations for Ports of Auckland’s future as a safe, customer-focused and profitable organisation.

We have reset our strategic direction and are very clear on our focus on core business and delivery. Our new strategy, Regaining our Mana, and the key pillars that support it are designed to lift our performance significantly, deliver a reasonable return to our owner, Auckland Council, and rebuild trust with Aucklanders. We will execute Regaining our Mana over the next three years.

Delivering a reasonable return

While our financial results reflect the challenges of FY22 and the decisions by the Board to refocus the business, there are green shoots in returns from operations.

The net loss of $10.3m (2021 - $45.57m profit) is direct result of the write off of $63.1m in costs capitalised on the project to partially automate the Fergusson Container Terminal. The Board made the decision to terminate the automation project and to return the terminal to a manual operation for the foreseeable future.

Pleasingly, revenue increased to $265.3m, up 17.2% on 2021, while operating costs increased by 12.9% reflecting operating cost controls in place. The operating profit before tax of the Group, excluding impairments, revaluations and share in investments, was $27.4m, an increase of 32.8% on 2021. The Company is committed to producing an adequate return on the capital investments made in infrastructure.

The Directors have declared a final dividend of 8.25 cents per share, to give a total dividend for the year of 9.7 cents per share (2021 - 2.55 cents). The return to the shareholder, Auckland Council, is $14.2m for the year, an increase of 281% on the previous year’s dividend.

A Safe Workplace

We continue to focus on improving our safety culture and practices.

The CHASNZ report on safety, released in March 2021, made 45 recommendations for improvement. We accepted the urgency to implement and have completed the recommendations, with just two areas, fatigue management and training, requiring longer to implement.

These two areas are complex, and we are working in partnership with our people and unions to complete by the end of FY23.

There is a positive change in our safety culture. ‘Safety First’ is led by our Board and Management and staff are empowered to speak up if they see something that’s unsafe.

Our people are telling us, informally and in our safety culture survey, that they feel more comfortable raising safety concerns and they are doing so.

Whilst this is a positive, we know that safety work is never finished and we must always be vigilant, look after ourselves and others, and take care at work.

Largest import port

Freight volumes held up well this year, despite the continuing challenging global supply chain and congestion in the New Zealand system.

The port continued to be the largest port for NZ’s imports, handling over 10.8 million tonnes, an increase of 8% on previous year, across containers, bulk cargoes and vehicles.

Container volumes showed a slight decline, with total TEUs down 0.8% to 811,565 compared to 818,238 last year.

The heavy vehicle and car trade has proven resilient especially in the second half, with volumes at 240,544 units, up 1.8% on the previous year. The increased volume was dealt with efficiently, maintaining the dwell time on the port to 2.07 days per unit.

Total breakbulk volume (including cars) increased by 9.4% this year to 7.293 million tonnes, compared to 6.666 million tonnes last year.

The majority of the imports coming through the port are delivered to customers within the wider Auckland region, meaning that the carbon footprint of onshore delivery to end users is reduced. The port has developed a carbon calculator to allow customers to understand the environmental cost of shipping a container within the North Island.

Sustainability

In June this year we welcomed Sparky, the world’s first electric ship handling tug with a 70-tonne bollard pull, the same strength as our strongest diesel tug - entirely emissions-free.

Our total emissions (Scope 1 & 2) fell 8.3% to 11,464.8 tC02-e this year (unaudited) from 12,502 tC02-e the previous year. This is a positive step towards achieving the port’s sustainability goals.

We are also focussing our efforts on those areas naturally aligned to our position on the Waitematā. Improving harbour health is an important sustainability pillar in the strategy and are looking to partner with a range of stakeholders to support a thriving ecology in the Waitematā and Tikapa Moana Te Moananui ā Toi (Hauraki Gulf).

Looking ahead

We recognise the importance of the port as the key gateway for New Zealand’s imports and we have refocussed our strategy on our core cargo-handling, cruise and marine businesses.

We are committed to lift the levels of service and performance of the port for our customers, our people and Auckland and as a result, of this improvement in performance and profitability to a net profit after tax, excluding investment property revaluations, of $35 million for FY23.

Ports of Auckland’s 2022 Annual Report is available here: https://www.poal.co.nz/media/reviews

ENDS

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