POT
18/02/2016 08:51
HALFYR
PRICE SENSITIVE
REL: 0851 HRS Port of Tauranga Limited (NS)
HALFYR: POT: Port of Tauranga Half Year Results
Hub Port Strategy Builds Tauranga Freight Volumes
FINANCIAL RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2015
Underlying earnings rise as strong growth in container volumes offsets drop
in log exports; harbour dredging clearing the way for larger ship visits to
Tauranga by year end.
Highlights:
o Total trade for the six months to 31 December 2015 up 1.1% to 10.1 million
tonnes
o Container volumes rise 10.4% to 470,928 TEUs (twenty foot equivalent units)
o Group Net Profit After Tax of $38.6 million
o Imports increased by 1.6% while exports increased 0.8%
o Dairy product export volumes increase 29%
o Kiwifruit exports up by 22.9%
o Interim dividend up 4.6% to 23 cents per share
New Zealand's largest freight gateway, Port of Tauranga, today reported
continued growth in container and dairy export volumes for the first half of
the 2016 financial year, offsetting a fall in log exports over the period.
Revenue for the six months to December 2015 was down 9.8% following the
exclusion of Tapper Transport revenue, equity accounting this business as an
Associate Company with its merger into Coda Group.
Reported and Underlying Group Net Profit After Tax was $38.6 million. The
result was slightly ahead of the prior year's interim Underlying Profit After
Tax of $38.5 million, but lower than the prior half year reported Net Profit
of $42.6 million, which included a non-recurring gain on the sale of
Associate Companies of $4.1 million.
The result was supported by a strong 10.4% rise in container volumes to
470,928 TEUs (twenty foot equivalent units), reinforcing Port of Tauranga's
position as New Zealand's largest container terminal and the country's
premier freight gateway. These gains were diluted by a 16.2% decrease in log
export volumes to 2.4 million tonnes from 2.8 million tonnes in the prior
year.
Chairman David Pilkington said: "Port of Tauranga has delivered a strong six
month result, especially in the face of the decline in log export volumes.
Our strategy of extending the port's freight catchment across New Zealand
continues to deliver results for shareholders and the country's exporters and
importers."
The Port of Tauranga Board has declared an interim dividend of 23 cents per
share, up 4.6% on the prior year's interim dividend. The record date for the
interim dividend is 11 March 2016 and the payment date is 25 March 2016.
Chief Executive Mark Cairns said: "Port of Tauranga is in an excellent
position to continue to grow its cargo volumes as more exporters and
importers recognise the value our hub port strategy delivers with reliable,
fast and cost-efficient routes to markets.
"With the Tauranga harbour channel dredging proceeding well, we are on track
to complete our contractual commitments with freight and logistics management
company Kotahi by July, in order to see larger vessels starting to call at
the container terminal by the end of 2016. This is the final building block
in our five year $350 million investment programme to prepare for larger
ships, which have the potential to deliver annual savings of as much as $300
million to New Zealand shippers .
"In the medium term, with the arrival of larger ships, we will be handling
significantly larger volumes of cargo per shipment. We are looking at every
aspect of our operations to ensure that we are ready for the step change
later this year."
Infrastructure Investment
Dredging specialist Rohde Nielsen is more than a third through the work to
dredge Tauranga harbour's shipping channels to a depth of 14.5m inside the
harbour entrance and 15.8m outside the harbour entrance. It is on track to
complete the work under budget and ahead of schedule in July.
The Port has expanded landside capacity at the Tauranga Container Terminal
and also ordered two new container cranes and thirteen new straddle carriers,
which are scheduled for delivery by September and will significantly enhance
the Port's "best in class" terminal productivity.
The Port has also focused on improving efficiency in the rail connection
between the Tauranga Container Terminal and the inland freight hub at
MetroPort Auckland. These efforts have been rewarded with a 24% increase in
the volume of containers carried on the rail corridor compared with the same
period a year ago.
Chief Executive Mark Cairns continued: "We are increasing efficiencies in the
supply chain by ensuring the north and southbound trains are fully utilised.
Coda (our freight and logistics partnership with Kotahi) has been making good
progress in securing significant domestic freight customers to provide
southbound backhaul loads to balance the northbound dairy trains from the
lower North Island. Port of Tauranga is now handling more than 90% of the
North Island dairy export volumes. Coda has commenced work on expanding its
intermodal freight hub in Otahuhu to handle these increased volumes. This
intermodal operation is expected to remove approximately 5,000 truck
movements per year."
Meanwhile, the Port has agreed a ten year freight deal with kiwifruit
exporters Zespri International and Tauranga Kiwifruit Logistics, which will
see a long term approach taken to investing in cool storage and port
operations to cope with the expected growth in the kiwifruit industry.
Cargo Trends
Despite the 16.2% decrease in log volumes, exports still increased 0.8%
overall to nearly 6.5 million tonnes. Processed forestry products saw some
growth, including the introduction of a new export category, square lumber.
Kiwifruit exports increased 22.9% to 413,102 tonnes. Dairy product exports
increased 29% compared with the previous year, as the long-term freight
agreement with Kotahi entered its second year.
Imported volumes continued their steady increase, rising by 1.6% overall to
nearly 3.7 million tonnes. Imported grain and stock feed supplements
decreased by 14.2%, and fertilisers by 9.7%, while oil product imports
increased by 14.2%.
Associate Companies
Associate profits were up 8.5% to $8.0 million. The largest increases came
from strong performances by Quality Marshalling and PrimePort Timaru.
Outlook
Port of Tauranga's diverse operations, locations and income streams continue
to provide some protection from fluctuating cargo volumes in commodities such
as log exports. The Company reconfirms its full year earnings guidance to be
in line with last year's underlying after tax profit of $79.0 million.
For more information, please contact:
Mark Cairns
Chief Executive
Mob: 021 978 887
David Pilkington
Chairman
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
Appendix: Non-GAAP Profit Reporting Measures
Port of Tauranga's standard measure of profit prepared under New Zealand GAAP
is net profit. The company has used the non-GAAP profit measure of underlying
profit when discussing financial performance in this document.
The Directors and Management believe this measure provides useful information
as they are used internally to evaluate the performance of the group.
Non-GAAP profit measures are not prepared in accordance with NZ IFRS (New
Zealand International Financial Reporting Standards) and are not uniformly
defined, therefore the non-GAAP profit measures reported in this document may
not be comparable with those that other companies report and should not be
viewed in isolation or considered as a substitute for measures reported by
Port of Tauranga in accordance with NZ IFRS.
Definition:
Underlying profit: Reported net profit excluding one-off items.
GAAP to Non-GAAP Reconciliation of
Six months to 31 December 2015
$M 2014
$M
Reported profit after tax 38.564 42.571
Fair value gain recognised on loss of control of Subsidiary - (4.731)
Impairment of goodwill in MetroBox Limited - 0.668
Underlying profit after tax 38.564 38.508
Extracted from audited financial statements
End CA:00277847 For:POT Type:HALFYR Time:2016-02-18 08:51:49
