Port Taranaki’s ability to support a diverse range of industry and trade, and remain resilient during uncertain economic times, has been highlighted in its year-end financial result.
For the year ended 30 June 2020, Port Taranaki recorded earnings before interest and taxes (EBIT) of $17.5 million, an increase of 34.5% on $13.0m in 2018-19. This was built on the back of trade volume of 5.46m tonnes, which was up 8.4% (423,000 tonnes) on the previous year.
“We are extremely proud of this result, which highlights the importance of Port Taranaki to the supply chain, and to communities and businesses in Taranaki and the central and lower North Island,” Port Taranaki chief executive Guy Roper said.
“While Port Taranaki has fared better than many businesses during COVID-19, the crisis has had an impact, particularly on our log trade,” he said.
“The out-of-the-ordinary circumstances, which have included Government tax depreciation changes, and business support, make year-on-year comparisons difficult and that is why we believe EBIT is the best measure of our performance for the past year.”
Net profit after tax (NPAT), which included a $1.1m uplift through the Government’s tax depreciation changes, was $12.2m, up from $7.5m in 2018-19. This was the largest NPAT recorded in the port’s history, surpassing $11.7m in 2013-14.
Port Taranaki’s full-year revenue was $51.8m, an increase of 9.7%, and the second highest in the company’s history ($55.3m in 2013-14).
Mr Roper said the port’s work to repurpose buildings in recent years, with a focus on diversifying the trade through the port, had been central to the business’ strong financial result.
“The repurposing we have completed – such as enabling the accommodation of a log debarker on-site – aims to help make trade easy for our customers by adapting and meeting their needs,” he said.
An extensive range of project cargo was handled in the past year. This included new trade moving across the Port Taranaki berths, such as wind farm componentry for the Turitea and Waipipi wind farms. Port Taranaki has also facilitated the shipment of live cattle exports.
This diversification saw Port Taranaki’s general trade increase from 40,000 tonnes to 227,000 tonnes – a rise of more than 460%.
“Given our adaptability and dedication to work with our customers we continue to investigate additional trade opportunities” Mr Roper said.
Bulk liquid trade remains Port Taranaki’s dominant business by volume, with 3.73 million tonnes crossing the Newton King Tanker Terminal during the year. This was up from 3.41 million tonnes in 2018-19, an increase of 9.38%.
“This was in large part due to Methanex, our largest customer, returning to increased production having been shut for a period of maintenance the previous year, and because of less disruption of supply from the Pohokura gas field,” Mr Roper said.
Port Taranaki’s support of offshore oil and gas exploration and production increased in the past year.
“We are supporting OMV in their offshore exploration programme, which seeks to extend the life of the Māui field. Although some exploration work was reduced during the year, overall the increased exploration activity and our continued support at Pohokura saw our offshore revenue increase 32%.”
After several years of record growth, log volumes dropped 77,000 JAS, or 8.8%, to 801,000 JAS.
“The forestry sector was hit particularly hard during the year, suffering early on from depressed prices and then being deemed not essential during the COVID-19 lockdown, resulting in harvesting stopping and trade essentially ceasing,” Mr Roper said.
“Considering the constraints the industry has faced, we are very satisfied with the sector’s performance and are continuing to work to extend our hinterland and provide at-port services that enhance exporters’ operations.”
In addition to increased storage space berthside on Blyde Wharf and a logs-on-rail service from Whanganui, in the past year a log debarker has been installed on-site.
“This increased capability ensures a quicker turnaround for vessels, which can now load top-deck logs as well as below-deck logs at Port Taranaki and head directly to Chinese destinations.”
Port Taranaki’s bulk dry trade volume for 2019-20 was 710,000 tonnes, which was in line with the previous year.
Operating expenditure for the year increased slightly from $26.6 million to $26.7 million, relating to rising insurance costs, the financial cost to Port Taranaki of Tamarind Taranaki’s receivership, and a major investment in bringing the port’s second mobile harbour crane up to full capability.
Port Taranaki is owned by the community through sole shareholder the Taranaki Regional Council (TRC), with dividends paid to the TRC each year helping to offset regional rates.
“We are pleased to have been able to pay a fully imputed interim dividend of $4.50 million for the 2019-20 year, and a further final dividend of $3.5 million has been approved,” Port Taranaki chairman Richard Krogh said.
Mr Krogh said the company’s performance in the past year demonstrated the “resilient nature of the Port Taranaki team during the COVID-19 crisis”.
He said the outlook for the coming year was positive, although caution was warranted over trade volumes in the first half of the year as the impact of COVID-19 globally was more fully realised.
In addition, the reintroduction of regional restrictions due to the re-emergence of COVID-19 had the potential to impinge upon overall activity.
“At this stage, we expect trade volumes to remain steady at around five million tonnes, although continued concerns around COVID-19 means there is uncertainty. We expect profit to return to previous levels as we bear costs associated with asbestos removal and a new fire water system for the NKTT.”
Mr Krogh said Port Taranaki had worked with Government agencies, staff, customers and other port users to ensure maritime border and health orders were followed throughout the COVID-19 crisis.
“We have worked closely with the Ministry of Health to strengthen border controls and testing to minimise any threat of the virus emanating from Port Taranaki,” he said.