Collective agreement costs Lyttelton Port

By Chris Hutching

Friday 12th March 2004

Lyttelton Port Company has reported a flat performance for the six months ending February and expects conditions to remain the same over the balance of the year.

The port's collective employment contract was the highlight at last year's annual meeting because of a special $2.9 million contingency set aside for the industrial settlement in this year's accounts. Chairman Barney Sundstrum said this week that the latest results reflected the benefit of implementing the new labour relations arrangements given that total volume through the port was static and revenues declined $1.2 million from a decrease in volumes in the log and coastal trades. During the same period operating costs remained flat despite increased stevedoring activity for containers and coal.

Total volumes through the port were static and revenues declined $1.2 million, reflecting a decrease in volumes in the log and coastal trades. The decline was offset by a 12% increase in container terminal volume compared to the corresponding half-year, to 72,700 twenty-foot equivalent units. Coal and bulk fuel trade was also ahead.

Sundstrum described the first six months of the 2003/04 financial year as encouraging for the company, and said the company's focus had been on establishing a "solid platform."

"Financially we have come in on expectations."

The trading result, as represented by earnings before interest, taxation, depreciation and amortisation and non-recurring items is $11.3 million. Net profit after taxation rose 25% from $4.4 million to $5.5 million compared with the previous corresponding period.

The $4.4 million NPAT was after the one-off pre-tax provision of $2.9 million to resolve the collective employment agreement including a sweetener for early retirement. "The retirement scheme has now concluded and we are already realising the benefits of the changes."

New chief executive Peter Davie highlighted the decision by P&O Nedlloyd and NYK to choose Lyttelton as one of the South Island ports for their express service to Southeast Asia (called the NZAX service) and the recent decision by ANL and P&O Nedlloyd to consolidate Lyttelton as one of their two South Island ports of call for their transtasman services.

Full-year projections are for total revenue of $59.9 million, down $1 million on last year, and earnings before interest, taxation, depreciation and amortisation of $24.3 million, compared with last year's $26.5 million before non-recurring items, an 8% decrease due to the reduction in revenue and increased operating costs.

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