With revenue of $211.1 million (down $7.2m on the previous year), in the 2015/2016 year Ports of Auckland posted a net profit after tax of $84m, up $21m on last year.
“I am pleased with what we have achieved,” said chief executive Tony Gibson. “We continue to make significant economic and social contributions to Auckland and New Zealand, despite operating in a difficult market environment. We thought it was going to be a tough year, and so it proved, but we still increased profit and dividend. That we have been able to deliver a strong result in current conditions is a sign that our company is in good health.”
Gibson said two factors contributed to a more difficult market. Lower iron and steel prices resulted in significantly lower iron sand exports and while this was partially offset by increased cement throughput due to Auckland’s booming construction sector, bulk volumes were down 5.5%. However, imports of cars, light commercial vehicles and ‘high and heavy’ vehicles increased, keeping the total fall in bulk and break-bulk volumes to just 2.2%.
Secondly, he said the container industry was facing ongoing difficulties caused by ship construction outstripping trade growth. The resulting overcapacity has led to a significant reorganisation of shipping services internationally, which has affected ports. Twelve of the world’s top 30 ports have reported volume reductions this year, and in New Zealand the changes have resulted in less volume leaving Auckland. Global container throughput is expected to grow by only 0.3% this year while shipping capacity will increase by 4.6%.
Gibson said the port’s strategy had been to offer great service, focus on improvements through technological advancements, keep costs low and extend its reach into the supply chain so it could offer better value and service to freight owners. Container terminal infrastructure is being undertaken so the port can cater for larger ships, and it is also starting work to automate the container terminal.
“We are continuing to build our freight hub network. We have a cross-dock under construction at Wiri, South Auckland, and our Mt Maunganui hub will open in September. We will soon lodge resource consent for enabling work at our Waikato freight hub, which will be our largest,” said Gibson. “We have recently entered a strategic alliance with Napier port, which will strengthen the position of both companies in the supply chain. With similar ownership structures, cultures and a complementary customer base, we see much potential in this partnership. There are many changes happening in our industry and it is an exciting time to be part of it. We look forward to the years ahead.”