Port of Tauranga on track to beat record year

By NZPA

Friday 25th October 2002

Port of Tauranga, which splits its shares in two weeks, is on track to beat last year's record volume and profit.

Chief executive Jon Mayson told the company's annual meeting in Tauranga today that trade for the first quarter of the present financial year was more than one million tonnes a month.

The unaudited net profit was $7.213 million for the three months ending September 30, 2002.

"This means the company, at an operating and financial level, is currently performing ahead of last year," said Mr Mayson.

For the year ending June 2002, Port of Tauranga handled 11.391 million tonnes of cargo -- an increase of 11.2 percent - and recorded a net profit of $25.9 million -- an increase of 15.6 percent.

The port, which has 4951 shareholders, is a having a two-for-one share split on November 8.

The port's latest earnings has been boosted by strong performances from its new subsidiary Owens Services BOP Ltd and the recently opened Northport in Whangarei.

The first ship arrived at Marsden Point in June, and Mr Mayson told the shareholders Northport has handled 545,000 tonnes in the first three months -- 12 percent above expectations.

Port of Tauranga, which has a joint venture with Northland Port Corporation, takes $225,000, or 50 percent, of the unaudited net profit of $450,000 for the first quarter.

Mr Mayson said Port of Tauranga paid $31.5 million for log marshalling and materials handling company Owens Services which operates in nine other New Zealand ports -- the purchase price was based on 4.7 times its annual average operational cash flow.

Owens' results for the first three months of the year indicated a performance "50 percent greater than the purchase price multiple".

Mr Mayson said the company's multi-port strategy was succeeding -- though the investments in Owens Services and Northport (around $30 million) meant the interest and finance costs were significantly increased.

He said the port would also receive around $300,000 to $400,000 in fees from cruise ships arriving in Tauranga -- 27 will berth this summer compared with 37 ships 12 months ago.

Mr Mayson told the shareholders there was no longer a clash between cargo-related activities and the cruise ship arrivals.

He said P&O Nedlloyd's decision to bypass Tauranga as a port of call for its super container ships would have no effect on the company's existing business.

"We had made no additional investment in the hope of securing the new services and unlike other ports have not lost any existing vessel calls or cargo volume.

"P&O's focus on feeder services means it is likely that we will benefit by additional cargoes being loaded onto the existing P&O Nedlloyd services through Tauranga to Middle East Gulf and Mediterranean ports," Mr Mayson said.

Asked if the port was looking to receive logs barged from the East Cape, Mr Mayson said "a lot of work was going on to ensure this happens".

Auckland-based Sea-Tow was investigating a barge facility at Te Kaha, a resource consent process was underway, and there were discussions with Carter Holt Harvey and Fletcher Forests.

Mr Mayson indicated the company would look to build new barging facilities to the south of its present wharves at Mount Maunganui.

Port of Tauranga is paying a final dividend of 22c a share on November 1, and the shareholders agreed to increasing the overall fees of the seven directors by $10,000 to $270,000.

Chairman Fraser McKenzie told the meeting the directors did have a significant rise last year but the new increase in fees resulted from the purchase of Owens Services.

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