Napier port's profit drops 3.7%

Net profit fell to $12.9 million in the 12 months ended September 30.

Port of Napier, the country's fourth-biggest container port, posted a 3.7% decline in annual profit as it spent $34 million beefing up its capacity.

This included an expansion of its terminal and buying two new mobile harbour cranes.

Net profit fell to $12.9 million in the 12 months ended September 30, from $13.4 million a year earlier. Profit was eroded by costs of extra staff as a result of its investment programme.

Revenue rose 7.6% to $72.1 million with a 17% increase in container volumes to 256,438, TEUs (twenty-foot equivalent units). Cargo volumes were unchanged at 4.1 million tonnes with reduced Chinese demand for logs, timber and pulp exports.

"With a spend of $34 million required to help build terminal capacity, we expected some impact on the bottom line," chairman Alasdair MacLeod says. "The investments we have made have resulted in increased productivity."

Like a number of its rivals, the Napier port company is positioning itself as a hub for shipping in anticipation of visits by larger vessels, which would make fewer stops to pick up cargo that had been drawn from across central New Zealand.

Port chief executive Garth Cowie says the company expects increased apple volumes and water exports in the coming year, which will offset the drop in dairy volumes when Kotahi, the logistics company owned by Fonterra and Silver Fern Farms, combined its dairy logistics division with Tauranga's Tapper Transport unit.