Ports of Auckland Group has lifted its full year profit forecast as a result of the successful execution of its Regaining our Mana strategy leading to a strong first half year performance.
Following the improved financial performance, an interim dividend of $15 million (2022 - $2.1m) will be paid to its shareholder, Auckland Council. The board expects to pay a total dividend of $30 million for the FY23 year, an increase of 111% on the $14.2 million total dividend in FY22, while also reducing the Group's debt.
The Group achieved a 40% lift in the first half underlying profit result, with a Net Profit After Tax (NPAT) of $20.8 million[1] compared with the prior year's result of $14.8m[2].
Based on the first half results, the full year NPAT forecast has been increased by $7-10 million to $42-45 million, being an uplift of 20-28% on the FY23 budget of $35m. Ports of Auckland has already committed to delivering an FY24 NPAT of $52m, in line with the Council's budget request.
Business highlights during the first half year include:
- The Stevedoring Code of Practice developed with the Maritime Union of New Zealand (MUNZ), and third-party stevedoring companies C3 Limited and Wallace Investments Limited.
- Developing a revolutionary initiative jointly with MUNZ to move stevedores from hourly wages to salary and a new rostering approach that provides greater certainty and flexibility for both team members and the Company.
- Committed to donating at least $1.5 million over 15 years to Te Moananui o Toi trust for improving the health of the Waitematā and the Hauraki Gulf.
- The Container Terminal division broke even at an NPAT level in H1 and is on track to a positive result in H2. This result compares to a $25 million loss for the FY22 year.
- Container throughput increased by 15% from the previous half to 421,375 TEU[3], with 15% of containers moved via rail.
- Multi-cargo operations continued strong volumes with 3.569m tonnes total break bulk. Cars were slightly down from 129,924 in H1 FY22 to 118,135 in this half.
- The first cruise ships post lockdowns were welcomed in August 2022. More than 90 cruise ships are expected by the end of April 2023.
- Sparky, the world's first full-sized electric tugboat, won the ITS Tug of the Year award and was named in TIME's Best Inventions List for 2022.
Chair of Ports of Auckland, Jan Dawson, says "We are very happy with the progress against our three-year strategy and the concentration on safety, customers, efficient operations and financial performance. After the disruption of the last few years, our half year results show this focus is paying dividends.
Regaining our Mana strategy is based on safely facilitating trade, delivering a fair return for Auckland ratepayers, creating a great place to work and being a good neighbour and kaitiaki of our environment. We are doing well across all measures." says Dawson.
As part of the strategy, Ports of Auckland has changed a number of revenue streams including:
- Introduction of peak and off-peak port access charges, to reduce heavy truck traffic during weekdays.
- Establishment of access charges for Multi-cargo and vehicle transporters, with introduction early in H2.
Roger Gray, CEO of Ports of Auckland, says "We are focused on running a safe, profitable and reliable port. Alongside key milestones to advance our commitment to sustainability and our team, we have made excellent progress towards achieving fair returns on assets.
"We're doing our part to resolve supply chain congestion and can see the initiatives we've put in place are effective. To give just one example, during the first half our container terminal throughput improved by around 3,000 TEU a week, compared to the start of the financial year," says Gray.
In order to strengthen New Zealand's supply chain resilience and certainty for the long term, the port has obtained resource consent for channel dredging and ongoing maintenance work in the last six months. This ensures the port can service the larger vessels expected to call in the coming years.
The port is also actively working with supply chain partners such as KiwiRail, trucking companies, other ports and cargo owners to manage the current supply chain congestion, recently exacerbated by Cyclone Gabrielle.
"We are in a good position and will be resuming berth windows in March 2023. Our commitment to giving shipping companies agreed vessel visit timings and container exchange volumes requires close coordination with shipping lines and other key ports.
"There will be ongoing challenges to the return to berth windows, as we're still experiencing significant delays or congestion in other New Zealand and overseas ports, and as the North Island recovers from Cyclone Gabrielle.
"We are ready to play our part in resuming 'normal' trade activity. Although, as we have seen in other industries such as aviation, that is no easy task," says Gray.
Looking ahead, Ports of Auckland will work with Central Government, Council and key stakeholders on a plan for the future use of the port land, balancing the city's need to have an operating port and a resilient supply chain, with increasing public access to waterfront land.
[1] Unaudited results.
[2] The $23.5m reported for H1 FY22 included $8.7m of property revaluations.
[3] One standard twenty-foot container equivalent
Ends
For more information contact:
Julie Wagener
Head of Communications
M: 027 421 6697
E: wagenerj@poal.co.nz
