POT
20/08/2015 08:52
FLLYR
PRICE SENSITIVE
REL: 0852 HRS Port of Tauranga Limited (NS)
FLLYR: POT: Hub Port Strategy Positions POTL for Continued Growth
FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2015
Highlights:
o Trade volumes up 2% to 20,179,078 tonnes
o Container throughput up 12% to 851,106 TEUs
o Reported Net Profit After Tax up 1% to $79.1 million
o Awarded dredging contract to Rohde Nielsen to deepen the Tauranga harbour
channel in preparation for the arrival of the next generation of 6,500 TEU
ships
o Formed Coda LP, a land-side logistics joint partnership with Kotahi
o Improved headline health and safety measure - Lost Time Injury Frequency
Rate has declined to 2.9 (3.1 in 2014)
New Zealand's freight gateway Port of Tauranga (NZX.POT) today reports it is
positioned for further growth as it moves to put in place the final elements
of infrastructure expansion necessary to support the arrival of the next
generation of container vessels to New Zealand waters.
In line with February 2015 guidance, Reported Net Profit After Tax for the 12
months to 30 June 2015 rose 1.1% to $79.1 million, up from $78.3 million in
the same period last year with traffic flows from the Company's expanded
freight catchment offsetting falls in log exports across its Tauranga
wharves.
Reported profit included a net $0.141 million of one-off items relating to
the sale of a 49.9% interest in Timaru Container Limited, transactions
relating to the formation of Coda and impairment of property, plant and
equipment and goodwill.
The Port handled 851,106 TEUs in the 2015 financial year (up 12% on the prior
year), while total cargo volumes increased 2% to 20.2 million tonnes.
Meanwhile, trans-shipped containers (those transferred from one ship to
another) increased by 17% to 203,417 TEUs at the Tauranga Container Terminal.
Revenue for the year was $268.5 million, largely unchanged from last year's
$266.5 million, while underlying profit was also up slightly to $79.0
million from $78.3 million last year.
Land, buildings, wharves, hardstanding and harbour improvements were revalued
as at 30 June 2015 resulting in values increasing by $81.5 million.
Cash flows from operating activities rose 10% to $90.3 million from $82.4
million a year earlier. Despite the heavy capital investment to accommodate
large ships, Port of Tauranga's balance sheet remains strong with gearing
(debt to debt plus equity) at 32% up from the prior year's 30%.
"Port of Tauranga's five year $350 million programme to expand its freight
hinterland and develop the infrastructure to support visits from the next
generation 6,500 TEU ships has underpinned our solid financial performance
and will continue to do so in the years ahead," said Port of Tauranga
Chairman, David Pilkington.
"The programme, which has included the development of freight marshalling
facilities across New Zealand as well as significant port infrastructure
investment, has delivered increases in freight to the port from outside of
our traditional catchments."
"These traffic flows will continue to grow and will underpin the arrival of
the large vessels, the first of which is due in port next year soon after we
have completed the dredging of the Tauranga harbour channel."
Reflecting its confidence in Port of Tauranga's prospects, the Board has
today declared a fully-imputed final dividend of 30 cents per share, taking
total dividends for the year to 52 cents per share - up 4% on last year's
full year dividend of 50 cents per share. The record date for entitlements
is 18 September 2015 and the payment date is 2 October 2015. Meanwhile, as
foreshadowed in February, Port of Tauranga intends to review its capital
structure once its capital expenditure programme comes to an end with the
completion of the channel dredging.
Mr Pilkington said Port of Tauranga remains confident of continued growth for
the 2016 financial year as New Zealand's freight continues to consolidate on
its wharves.
"New Zealand's primary produce sectors are vulnerable to the cyclical nature
of international demand and price. The lower global prices for dairy products
and log exports we are now seeing will have some impact on volumes in the
coming financial year, but we believe strong demand for other export cargoes,
including meat and kiwifruit, will help offset decreases.
"The diversity of Port of Tauranga's cargoes and income streams, its
strategic partnerships and Tauranga's growing importance as a trans-shipment
hub also provide protection. In addition, all cargo volumes, container and
bulk, will ultimately benefit from the cost savings that will follow the
introduction of larger ships." Mr Pilkington said.
Port of Tauranga Chief Executive Mark Cairns said the Company is entering the
final phase of a programme that will future proof the port for the next 20 to
30 years and deliver significant efficiencies to the New Zealand supply
chain.
"The forecast $300 million annual transport costs savings that will come
with the arrival of the new 6,500 TEU ships will provide a significant offset
to cyclical downturns such as the one the New Zealand dairy and forestry
sectors are now experiencing.
"Port of Tauranga will be the first New Zealand port able to berth the next
generation of 6,500 TEU ships. The investments we have made expanding the
Company's freight catchment from Northland to the bottom of the South Island
will ensure all shippers benefit from the arrival of the new vessels.
"We are entering a new era for New Zealand shipping and Port of Tauranga is
positioned to be at the forefront of developing New Zealand's routes to
international markets as the country's Port for the Future."
Cargo Trends
Imports increased 8% to 6.9 million tonnes from 6.4 million tonnes last year.
This reflected growth in cement volumes, up 55% to 165,503 tonnes in line
with the strength of the New Zealand construction industry. Car volumes more
than doubled to 11,607 units.
General cargoes also increased 22% to 3.2 million tonnes, but were offset by
grain imports being down 13%; bulk liquids down 6%, and coal imports down
nearly 100% due to a decline in thermal electricity generation.
Export volumes were flat on the prior year at 13.3 million tonnes with strong
rises in dairy commodities, meat, kiwifruit and general freight offsetting
falls in logs, sawn timber, apples, onions and steel.
The number of containers crossing Tauranga's wharves grew 12% to 851,106 TEUs
from 759,587 in 2014. This growth was assisted by last year's agreement with
logistics provider Kotahi for the delivery of agreed volumes of container
traffic to Port of Tauranga.
Operational Developments
This year, in anticipation of the arrival of larger ships, Port of Tauranga
has continued to streamline all parts of the supply chain linking New Zealand
shippers with the vessels that carry their freight to and from offshore
markets.
The Company has taken delivery of two brand new tug boats, the Tai Pari and
her sister vessel the Tai Timu for its Tauranga port operations. The new tugs
have a 74-tonne bollard pull capacity and features to make them highly
manoeuvrable. The tugs are ideally suited to handling the new generation of
ships.
The Port has also ordered two new super post-panamax gantry cranes, due for
delivery late in 2016 which coincides with the completion of the dredging.
Meanwhile, the Company will commence its long-awaited project to dredge
Tauranga harbour's shipping channels in October 2015. Danish dredging company
Rohde Nielsen has won the tender for the work, and will widen and deepen the
shipping channels to a depth of 14.5 metres inside Tauranga harbour and 15.8
metres outside the harbour.
Port of Tauranga's South Island operations are going from strength to
strength.
The Company opened its new inland port, MetroPort Christchurch, at Rolleston,
just south of Christchurch, at the end of July. The hub, which enables the
receipt, packing and distribution of containerised cargo and the provision of
empty container depot services, is modelled on Port of Tauranga's
highly-successful south Auckland inland hub MetroPort. The hub is giving
South Island shippers access to Port of Tauranga's container terminal at
Timaru and its broader New Zealand infrastructure.
Timaru Container Terminal has commissioned a third mobile harbour container
crane to handle increased container volumes. The alliance with freight
management company Kotahi is meanwhile generating increased volumes of
exports at both the Tauranga and Timaru container terminals.
New Alliances
Following last year's alliance with Kotahi, Port of Tauranga this year
concluded a new logistics joint venture with the freight and logistics
provider to streamline land-side logistics.
Named Coda, the new venture is driving efficiencies across the New Zealand
supply chain and is delivering benefits to New Zealand shippers and Port of
Tauranga shareholders. It combines Kotahi's Dairy Transport Logistics with
Port of Tauranga's subsidiary Tapper Transport, its container packing and
unpacking facility MetroPack and its 37.5% shareholding in empty container
repair and storage business, MetroBox.
Health & Safety
Port of Tauranga continues to improve health and safety in and around its
operations. Two years ago, the Company introduced new reporting regimes for
accidents and near miss incidents, alongside programmes to foster greater
personal accountability for safety.
As a result of these and other initiatives, the Company's Lost Time Injury
Frequency Rate (LTIFR) fell to 2.9 incidents per million hours worked in the
year to 30 June 2015 (from 3.1 in 2014). Port of Tauranga considers any
injury, no matter how minor, to be one too many and will remain vigilant as
it moves to a new national workplace safety regulatory environment.
Outlook
Mr Cairns said, "Not only is the Company well positioned for growth over the
medium term, but we are also now better balanced to accommodate any volume
weakness from cyclical commodity influences in the short term, following our
recent investments in; PrimePort Timaru, Timaru Container Terminal,
MetroPort Christchurch and Coda."
"The first month of this financial year has continued to show increased
container traffic with volumes up 19% on last year and with significantly
higher container volumes being railed to Auckland." The recently released
Ministry of Transport Freight Information Gathering Study (FIGS) shows Port
of Tauranga being New Zealand's busiest container terminal for the last
quarter.
"Trade volumes are expected to be slightly higher in 2016. At this stage, we
are expecting log volumes to be similar to the last financial year."
"With a low dairy payout, fertiliser and dairy food supplement volumes are
expected to decrease, but these will be offset by an increase in kiwifruit
and container trade.
"With the dredging starting in October 2015 we will have the infrastructure
in place to handle the 6,500 TEU ships in late 2016, and we expect container
volumes to exceed 1 million TEUs in the 2016/2017 financial year."
For further details, contact:
Mark Cairns David Pilkington
Chief Executive Chairman
Port of Tauranga Limited Port of Tauranga Limited
Mob: 021 978 887 Mob: 021 609 635
http://www.port-tauranga.co.nz/Media-Room
About Port of Tauranga:
Port of Tauranga is New Zealand's largest port by volume of cargo and New
Zealand's international freight gateway. It operates wharves at Tauranga,
Mount Maunganui and Timaru, as well as MetroPort Auckland, a rail-linked
inland port in South Auckland and MetroPort Christchurch, an intermodal
freight hub in Rolleston. The Port of Tauranga Group includes: Quality
Marshalling (100% ownership), a forestry and container handling company; Coda
(50% ownership), a freight logistics group; Northport (50% ownership), which
operates a deep water commercial port in Whangarei; PrimePort Timaru (50%
ownership), which operates the commercial port in Timaru, Timaru Container
Terminal (50.1% ownership), which leases and operates the container terminal
at Timaru and PortConnect (50% ownership), which was set up to operate an
online cargo management system, connecting ports to their logistics
companies. For more information about Port of Tauranga please visit
www.port-tauranga.co.nz
End CA:00268730 For:POT Type:FLLYR Time:2015-08-20 08:52:21
