Strike-hit Ports flags weak second-half earnings

BUSINESSDESK: Ports of Auckland flagged a likely weak result in the second half of the financial year after losing contracts because of its industrial dispute, following on from a flat first-half underlying profit declared today.

The port made a net profit of $18.6 million in the six months ended December 31, though $4.8 million was a tax gain that is unlikely to recur, the company said.

Stripping that out, underlying profit was $13.8 million, down from a $14 million normalised profit a year earlier.

The port boosted revenue 9% to $96.6 million in the period, though operating costs climbed 12%.

The board declared an interim dividend of $9.8 million, paid on February 29, down from $10.4 million a year earlier.

“Second-half results will be impacted by decreased container volume associated with recent industrial action and loss of the Maersk and Fonterra services,” chief executive Tony Gibson said.

“It’s been a challenging period for the business.”

The port has been embroiled with a protracted dispute with the Maritime Union over its plan to introduce flexible shifts as a means to rein in its wage bill.

That has caused rolling strikes and lockouts, and the parties have gone back to the bargaining table after Employment Court Judge Barry Travis granted an injunction and the port management drew back from hiring external stevedoring contractors.

Ports of Auckland lifted total container volume 0.2% to 454,234 20-foot equivalent units (TEU), still more than rival Port of Tauranga’s 344,081 TEUs in the same period.

Full import container volumes rose 1.7% to 169,557 TEUs, while Tauranga’s increased 15% to 54,982 TEUs.

Auckland’s trans-shipment volumes, where containers pass through the port before reaching their final destination, were down 6.3% from the same period a year earlier, while Tauranga boosted pass-throughs by 40% in the same half.

Auckland’s bulk and breakback, or non-containerised, volumes rose 0.9% to 1.9 million tonnes.

The port said there were several one-off factors on the earnings period that probably won’t happen again.

They included a change in shipping schedules that lifted empty containers 20%, revenue from the Rena salvage, a record number of cruise ships for the Rugby World Cup, an increase in vehicle imports after Japan’s earthquake and new emissions standards, and prior period tax adjustments.