Ports of Auckland’s interim profit is down 26% to $9.3 million, with an increase in its container business not enough to offset falling revenue from car imports.

The Auckland port has decided not to declare an interim dividend to its council owner, saying it would not be appropriate to do so in the midst of an ongoing capital review.

This review, which amongst other things is looking at whether the port’s 75% dividend payout ratio is appropriate, will be completed by the end of September.

Ports of Auckland managing director Jens Madsen says the port’s debt ratio is about 48%. He won’t comment on whether the current capital review could result in new equity being injected into the port.

Ports of Auckland is dramatically scaling back its capital expenditure as it copes with a 6-7% drop in container volumes in the first two months of 2009, compared with 6-7% growth in the same months last year.

Mr Madsen will not rule out job cuts, although he said the company is doing all it can to avoid them, including a freeze on executive salaries.

The port’s container volumes in the six months to December 31 reached a record high of 455,083 twenty foot-equivalent units, up 6.4% on the same period in 2007.

Container division ebit was up 8.4% on the six months ended 31 December 2007 and transhipment numbers were up 33.5%.

But the “general wharves” division, which handles breakbulk cargo including imported cars, had a shocker after changes to government regulations affected the cost of importing used vehicles.

Imported car volumes dropped 23.7% to 66,493 units and the general wharves division ebit decreased 15.7%.

Mr Madsen says this trend is unlikely to reverse any time soon and the port is looking for volume that can be substituted for the cars.

Ports of Auckland’s result contrasts with that of its main rival Port of Tauranga, which recorded a 10% jump in interim profit on the back of a 6% increase in total trade.

Mr Madsen agreed that as a more import-oriented port than Tauranga, Ports of Auckland was more vulnerable to the recession.

He says exports through the port are holding up but the reduction in container volume will come from an expected 15%-odd decrease in imports over the next six months.

“We don’t have a natural hinterland for bulk commodities,” he says.

“New Zealand consumers are cutting back on spend.”

For the remainder of the financial year, Mr Madsen says the market outlook is “pretty bleak”.

“There is no immediate light at the end of the tunnel.”

Last year’s interim profit figure included a $1.5 million tax credit.