Port of Tauranga Limited Analysis

Overview

The company was listed in May 1992 following a public issue of 33.6m shares at $1.05, which included a total of 12.6m shares previously owned by the Waikato Regional Council, and coincided with completion of a $53m expansion of port and cargo handling facilities.

The company's business predominantly services the forestry and farming industries in the region. Since listing the company has recorded strong growth in cargo volumes and increasing emphasis on container traffic. Significant recent initiatives have included establishment of Metroport, an inland port in South Auckland for the aggregation and distribution of import/export cargo, a 50:50 joint venture project with Northland Port to develop and operate a new $65m deepwater port (Northport) at Marsden Point in Northland, and acquisition of log handler Owens Services BOP (which operates in 10 ports.

POT derives its revenue through three main streams: port services, rental income and rental from investment properties. Other income also comes from investment dividends and fair value gains (losses).

POT has been granted Listing with a 'Non-Standard' ("NS") designation. This designation was granted because under the Port Companies Act 1988, changes to POT's Constitution must be approved by the Minister of Transport. For further information, please see the Port Companies Act 1988 which is publicly available at www.legislation.govt.nz.

Performance

The following information was extracted from Port of Tauranga Limited's half year results, released 28 February 2025

Port of Tauranga Limited delivered a strong performance for the six months ended 31 December 2024, with Group Net Profit After Tax of $60.2 million - a 27.4% increase on the same period last year.

Earnings and trade volumes recovered well after a particularly challenging start to the previous 2024 financial year.

Total trade volumes increased 6.9% to 12.4 million tonnes and containers increased 10.2% to 591,934 TEUs compared with the prior corresponding period.

Although log exports dropped relative to the high volume of wind-damaged logs in the previous year, international demand for other key export commodities saw steady export trade in the first half. Bulk cargo volumes increased, particularly for imports.

The Port’s continuous focus on service delivery saw further reductions in vessel wait times, and productivity improvements across the port are being implemented. Further gains remain challenging due to vessels continuing to arrive off schedule and berth capacity shortages, which also make it difficult to accommodate new shipping services. The capacity constraints can be alleviated with the construction of the Stella Passage development, and an application is now being prepared under the new fast-track legislation (see below).

Highlights

• Group net profit after tax: $60.2 million (a 27.4% increase from

$47.2 million)

• Total trade: 12.4 million tonnes (a 6.9% increase from 11.6 million tonnes)
• Container volumes 591,934 TEUs (a 10.2% increase from 536,928)
• Ship visits: 690 (an increase of 2.4% from 674)
• Imports: 4.4 million tonnes (a 14.9% increase from 3.9 million tonnes)
• Exports: 8.0 million tonnes (a 3.0% increase from 7.8 million tonnes)
• Log exports: 3.2 million tonnes (a 10.5% decrease from 3.6 million tonnes)
• Direct dairy exports: 0.96 million tonnes (a 1.2% increase)
• Subsidiary and associate company earnings: 1.1% increase
• Interim dividend: 7.0 cents per share (compared with 6.0 cents per share).

Operating revenue was $225.0 million, a 12.5% increase from the $200.0 million reported in the six months to December 2024. EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) increased 17.9% to $114.3 million. Operating costs increased 7.2% to $113.9 million.