Ports of Auckland on track for bumper profit
Auckland Council-controlled Ports of Auckland is on track for its best profit since it was de-listed in 2005.
This morning, the port company announced a $26.4 million after-tax net profit for the six months to December 31, up 70% on the previous comparable period, driven by productivity gains and record container volumes.
The company estimates it will make a full-year net profit just shy of $50 million, which would be its best full-year result since 2005.
The bumper result, if achieved, also pushes the company closer to the magic 12% return on equity – a figure demanded by Auckland Council.
The first-half result – which is usually stronger than the second half, because of the importing cycle – is, when annualised, an 11.3% return on equity. Ports of Auckland predicts the full-year figure will be about 10.6%.
“We have had a reasonably strong January and February,” Ports of Auckland chief executive Tony Gibson says. “We expect the full year to be good but not double the half-year result.”
How does the port plan to hit the 12% target?
“It’s an extension of what we’re doing now,” he says. “What we’ve also got to do, given the result we’ve got, is look at where and how we invest and the timing of that, to make sure we can keep up with customers’ growth expectations.”
The port announced reforms in 2011 and now most stevedores are on a flexible shift and roster system and productivity has been improved by process changes and better use of technology.
“Since that turnaround plan, our cranes are going 30% faster and we’re unloading and loading ships 44% faster,” Mr Gibson says.
“This is the sort of return that Auckland deserves, [although] we’re not quite at 12%.”
The half-year result is more impressive, considering the company is still negotiating with the Maritime Union over a new collective agreement - negotiations which started in August 2011.
Highlights of the half year result:
NPAT up 70% to $26.4 million
Interim dividend of $21 million to be paid to Auckland Council Investments, up 81%
Operational earnings before interest and tax (Ebit) up 47% to $40.4 million, on revenue of $107 million, up 17%
Container volumes up 15.1% to 476,333 twenty foot equivalent units (TEUs)
Full import containers 19.9% higher, full exports 12.9% higher
Break-bulk cargo volumes up 42% to 2.87 million tonnes
Car numbers (which are part of break-bulk cargo) up 29% to 99,710 units.
For more on Ports of Auckland’s result read Friday’s National Business Review print edition.