Ports of Auckland net profit rises 27%; dividend flat on year

Wednesday 3rd October 2018

Ports of Auckland reported a 27 percent lift in net profit, boosted by some one-off gains and a full year of revenue from its Nexus Logistics and Conlinxx units.

Reported net profit for the year to June 30 was $76.8 million, up from $60.3 million the year before. But that included $17.6 million for items related to asset valuation changes and impairments, compared to $5.3 million in the 2017 year. Ports of Auckland will pay a dividend of $51.1 million to the Auckland Council, slightly down from $51.3 million the year before.

Group revenue was $243.2 million, up $20.8 million. Freight volumes increased and the port benefited from buying out its joint venture partner in Nexus Logistics in May 2017. That brought Conlinxx, which manages Ports of Auckland's Wiri inland port, back under its control.

The country's largest port said that container volumes were up 2.2 percent to the equivalent of 973,722 twenty-foot units, while breakbulk and bulk volumes were up 4.8 percent to 6.77 million tonnes. The container terminal team delivered an average crane rate of 35.63 moves an hour this year, nearly one move per hour more than in the previous year.

The company said significant progress has been made on the automation of its container terminal, due to go live in the second half of the 2019 calendar year. It has also completed earth works at the Waikato Freight Hub and started construction of the first freight handling facility for Open Country Dairy. Road and rail connections will be built during the next 12 months and the hub will open for business by mid-2019, it said.

As a result, capital expenditure was $130.5 million, versus $88.2 million in the year to June 2016.

"We’re making a significant investment in our people, technology and infrastructure to establish a platform for sustainable future returns, with multiple projects, including automation, underway this year," said chief executive Tony Gibson.

Looking ahead, chair Liz Coutts said the risks to the trading environment are similar to last year. Container shipping lines continue to consolidate, with the top 10 lines globally now accounting for 80 percent of all container traffic. In New Zealand, the largest line has captured around 50 percent of the market and the number of container lines calling at Ports of Auckland is down to eight as a result of mergers and acquisitions.

"We face relentless pressure to increase efficiency and cut costs," she said.

Coutts said the company is also mindful of the potential threat to the global economy from the rise of protectionism and a possible trade war. Any global economic slowdown that resulted would probably affect New Zealand and reduce global shipping volumes. However, "the company is in a good position to weather such an event," she said.

(BusinessDesk)

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