Increased bulk liquid volumes and offshore support work has helped Port Taranaki post an improved result for the first half of the 2019-20 financial year.
For the first six months to 31 December 2019, Port Taranaki recorded an unaudited after-tax profit of $5.31 million, an increase of 34% on the same period the previous year. Revenue for the half-year was $25 million, $1.3 million higher than the corresponding six months.
“This is a very pleasing result,” Port Taranaki chief executive Guy Roper said.
“Our bulk liquid trade increased 194,000 tonnes, or 11%, compared with the 2018-19 half year. This was due, in part, to Methanex’s return to greater production levels following OMV’s work to improve production at the Pohokura gas field, and Methanex undertaking maintenance at its Waitara Valley and Motunui methanol plants in the prior year.
“We have also had a 34% increase in revenue from our offshore support business as the oil and gas sector has increased exploration activity.”
Mr Roper said the disappointing outcome of Tamarind Taranaki Limited’s Tui well project, which resulted in the company’s administration and subsequent receivership, had been felt widely across Taranaki and had impacted many businesses, including the port.
“That has been a blow to the region as the energy industry remains an incredibly important contributor to the Taranaki economy.
“However, OMV’s increase in production and ongoing work at Pohokura, its plans to re-energise the supply from Māui, and its exploration activity is encouraging for the region, including for our own business, which has a direct financial connection with the community,” Mr Roper said.
Port Taranaki is owned by the community through sole shareholder the Taranaki Regional Council. A dividend of $3.5 million was paid to the TRC in September 2019, and an interim dividend of $4.5 million has been approved.
Overall, Port Taranaki’s total trade for the six-month period increased 5.7% to 2.73 million tonnes compared with the first half of the 2018-19 year, while vessel visit numbers were up from 128 to 137.
While bulk liquid trade increased, log trade was down 5%, or 23,000 tonnes, following a price correction in July 2019. Dry bulk trade was also lower, down 8.7% or 33,000 tonnes.
“The drop in log trade was expected following the change in market conditions in China, which resulted in a price correction and forest owners holding on to some stock,” Mr Roper said.
“Dry bulk volumes are largely driven by weather and on-farm conditions, which were good for farmers in Taranaki in the six-month period, resulting in less animal feed and fertiliser being required.”
After a period of significant investment in its future growth and sustainability, Port Taranaki’s capital expenditure slowed in the first six months of the 2019-20 year. Capital expenditure was $1.89 million, well down on the previous two corresponding periods – $6.59 million in 2017-18 and $5.21 million in 2018-19.
“We have invested substantially in recent years to adapt to changes in the shipping and logistics industries, to meet our customers’ needs and to ensure we are sustainable, such as the new tug Kīnaki, and the repurposing of buildings and land on site, including repaving an area of Blyde Wharf to provide increased berth-side storage for log exporters,” Mr Roper said.
“In the past six months, our new shipping and landside operations planning and scheduling software, Marine Enterprise Suite, was launched, which will enhance all our operations across the company.”
Operating expenditure was also lower, down 3.8% to $16.62 million.
Mr Roper said trading conditions in the second six months of the financial year were expected to soften, however overall annual trade was projected to again be in excess of five million tonnes.
“Export log trade volumes are forecast to slow because of market conditions in China and the impact of the coronavirus.
“However, through OMV’s activity, which is leading to improved bulk liquids volumes and increased offshore support, and the diversification of trade across our berths, including the arrival and storage of wind turbine components, we believe Port Taranaki is in a strong position moving forward.”