A record year of log exports has helped offset the impact of reduced bulk liquids trade for Port Taranaki, with the company reporting a strong 2020-21 full-year financial result.
For the year ended 30 June 2021, Port Taranaki recorded a net profit after tax of $9.2 million – the second highest in the past six years – as overall trade volumes were again above five million tonnes at 5.1m.
While overall trade volumes were 6.7%, or 363,400 tonnes, down on the previous year, it was a strong result given bulk liquids, which are Port Taranaki’s predominant trade, were down 19.9%, from 3.7m tonnes to 2.9m tonnes.
Helping offset the reduction in bulk liquids volumes, Port Taranaki’s log trade jumped 41.7%, or 334,000 JAS (Japanese Agricultural Standard), to 1.1m JAS. It was the first time in the port’s history that log exports had passed the 1m JAS milestone in a single year.
Overall, revenue for the full year was $50.8m, which was 1.8% lower than the previous year, as reduced bulk liquids trade also resulted in a slight reduction in vessel visits – from 273 to 265.
“Given the challenges in the energy sector in the past year, particularly in the second half, this is a very pleasing full-year result,” Port Taranaki chief executive Guy Roper said.
The reduced bulk liquids volumes were primarily driven by lower methanol volumes, which were down 22.5%.
During the year, Methanex, Port Taranaki’s largest customer, was impacted by reduced gas supply at the Pohokura field, which resulted in its Waitara Valley plant being idled. In the second half, low hydro storage coupled with gas supply constraints saw Methanex reduce production at its Motunui plant to free up natural gas supply to support the wider energy sector and consumers during winter.
The New Zealand export forestry industry continues to go from strength to strength, and strong commodity prices, high demand from China, and Port Taranaki’s at-port services helped to boost the company’s log trade to in excess of 1m JAS.
The 2020-21 year was the first full year of operation of an on-site debarker at Port Taranaki. The debarker has attracted logs from further afield, helping to increase the port’s hinterland both north and south of Taranaki.
“In the past five years our log trade has grown 230%, and we thank the forest owners, exporters, marshallers, stevedores and transport companies who have worked with us to grow this business,” Mr Roper said.
Bulk dry volumes increased 8.2%, from 708,000 tonnes to 766,000 tonnes – the highest dry bulk trade since 2018 – as more urea vessels visited to support supply needs across the country.
General trade tonnage remained steady at 212,000 tonnes, down 15,000 tonnes on the previous year.
“As the gateway to the lower North Island, we believe there is real opportunity to develop the project cargo and general trade business further,” Mr Roper said.
Operating expenditure for the year increased from $26.7m to $29.7m, which was driven by increased repair and maintenance costs associated with the removal of the Moturoa Wharf Gallery and ancillary buildings and removal of cladding from the Moturoa Store as part of Port Taranaki’s ongoing asbestos management plan.
As a result, earnings before interest, tax, depreciation, amortisation and fair value adjustments (EBITDAF) was down from $25.1m to $21.1m.
Port Taranaki is owned by the community through sole shareholder the Taranaki Regional Council (TRC), with dividends paid to the TRC helping to offset regional rates. Dividends paid during the 2020-21 year totalled $8.0m. A $4.0m final dividend has been declared and will be paid in October.
Port Taranaki chairman Richard Krogh said the company’s performance during a difficult time for the energy sector and the ongoing COVID-19 pandemic had been outstanding.
“The whole port team – from management to wharfside – has displayed continued commitment and professionalism during these extraordinary times,” he said.
“Their dedication to, and success in, providing key supply chain services that enable our region and economy to thrive, while at the same time following strict health and safety border procedures to keep our community safe, has been superb.
“We also thank our customers, contractors, lessees, and other port users for their ongoing support.”
Mr Krogh said Port Taranaki could “confidently look forward” with forecast trade volumes to remain around five million tonnes.
He thanked Mr Roper, who retires in late September, for “more than six successful years” as Port Taranaki chief executive.
“During a period of significant change in Government policy, trading conditions, and the COVID-19 pandemic, Guy has led Port Taranaki expertly and diligently. He has maintained the port’s presence as one of the key export ports in the country, led the development of the port into a modern facility catering to customers’ needs, attracted new business, and has supported the growth and development of people across the company.
“With a focus on long-term sustainability, the Board very much appreciates the strong foundation upon which incoming chief executive Simon Craddock can continue to drive the business forward.”