Port of Tauranga vents frustration, predicts another record profit

BUSINESSDESK: Port of Tauranga is signalling another record profit and is frustrated at a new Maori court challenge to block plans to deepen its shipping channel to accommodate larger vessels.

A 19% rise in net profit after tax in the first quarter has given the company the confidence to predict an annual profit between $75 million and $79 million at its annual meeting today. The port posted a record $73.5 million profit last year, up 26% on the previous year, which was also a record.

Port of Tauranga notched up a 32% increase in container volumes in the first quarter from a year ago, with the help of seven new shipping services it did not handle then.

"Congestion at the container terminal during the period of Auckland industrial action did cause crane productivity to fall to 31 moves per hour, but we have managed to restore this to more than 35 moves per hour again over the last two months," chief executive Mark Cairns says.

The port will not keep new shipping services unless it maintains productivity and customer service, and $180 million of investment over the next three years funded from operating cashflows has been earmarked for new facilities, he says.

Frustrations with the Resource Management Act and opposition to the dredging of its shipping channel remain an issue.

Mr Cairns says the company is relieved that the High Court dismissed Ngati Ruahine's appeal against dredging but it received notice last week that Ngati Ruahine are going to the Court of Appeal.

Ngati Ruahine is a hapu of Ngati Ranginui iwi, one of 21 hapu that comprise the Tauranga Moana Collective.

"Needless to say, we will be vigorously challenging the legitimacy of this appeal," Mr Cairns says. "We hope the appeal to the Court of Appeal can be resolved quickly."

The port wants to start the first stage of dredging towards the end of next year.

Mr Cairns says ports should be included under Section 6 of the Resource Management Act and considered as matters of national importance. He is hopeful a second round of reforms of the act by the government will include this.

The port has ordered two new gantry cranes, giving it a total of seven. It has also modified one of its older cranes to become twin-lift capable.

"We are very excited about the potential that is being shown in our twin-lifting trials, with peak crane rates of more than 60 moves an hour being achieved," Mr Cairns says.

It is extending its Sulphur Point wharf by 170M, increasing berth capacity by 28%. The rail sidings at Sulphur Pt have also been reorganised, allowing the loading and unloading of three trains at any one time.

Log exports rose 7% and the port has been under pressure to allocate more land to log storage for record log export volumes.

"In 2012, we demolished a shed to create an additional 2.5ha of log storage. We will continue to pave further log storage areas in the coming year." 

Chairman John Parker says the board received a number of requests from mainly retail investors to consider a share split but it has decided not to.

"As shareholders, we should be proud that Port of Tauranga is currently tracking as the highest priced New Zealand company on the NZX."

The shares fell 0.4% to $12.90 in trading today and have climbed 30% this year.