Port Taranaki is riding a growing wave of profitability, with its latest annual report recording a 71 per cent increase in net profit after tax.
And there's more to come - the Taranaki-owned port company is predicting further major trade growth this financial year.
"Trade activity increased across bulk liquids, dry bulk cargoes and log exports for the fourth straight year," says Port Taranaki chief executive Roy Weaver in his report, tabled at the port company's annual meeting.
"The outlook is one of continued growth in cargo throughput, driven primarily by the recommissioning of Methanex's Waitara Valley methanol plant in September 2013. Overall trade through Port Taranaki is anticipated to rise to over five million tonnes in 2013/2014."
The port's record for annual trade is 5.64 million tonnes, achieved in 2002 when the Taranaki methanol industry was last at its production height.
During the past financial year to June 30 the cargo volume was 4.57 million tonnes, which allowed the port company to post an after-tax profit of $7.46 million - way up on the $4.36m profit recorded the previous financial year.
That amount of trade tonnage is also far removed from tough times the port experienced seven years ago when it handled just 2.65 million tonnes of cargo and could only pay $840,000 by way of dividend to its sole shareholder, the Taranaki Regional Council.
But this time the dividend has soared to $2.95m. The council uses the money to help keep rates down, which is a primary reason why its rates increase of 1.5 per cent for the 2013/14 financial year has helped the council continue to boast the lowest per-capita rates in the country.
Port Taranaki's latest annual report shows the region's energy industry is primarily responsible for the spectacular growth in trade tonnages and profitability.
Bulk liquids trade - all the oil, methanol and other oil and gas based products - has grown so much it is now responsible for more than 76 per cent of total trade through the port. Last financial year, the bulk liquid trade grew 27.3 per cent to 3.48 million tonnes.
Trade activity also increased in log exports and bulk dry cargoes, the annual report shows.
The log exports recorded another record year, up 18 per cent to 323,000 freight tonnes. The bulk dry imports - supplementary feeds, fertilisers, and grains - also achieved a record, up from the previous year's high by 2.5 per cent to 545,000 freight tonnes.
More land has been made available for anticipated further growth in bulk dry imports and log exports, says the report. The recent purchase of the 18.8ha site of the decommissioned New Plymouth power station has provided the potential to double the current log throughput from Port Taranaki.
The port is now targeting a larger log catchment and is preparing to handle product from forests that will be ready for harvest over the next five years. Log storage areas are being sealed, an automated weighbridge has been installed, and a covered log scaling area constructed.
The report says the year ahead will also be very busy for offshore servicing activity, which will also be a big earner for the port. A total of 19 exploration and development wells are programmed to be drilled off Taranaki by three drilling rigs from this summer.
While the big news is the 71 per cent increase in net profit, all the figures contained in the annual report make healthy reading.
Revenue from operations increased 8.9 per cent to $44.96m, and operating profit shot up 40.3 per cent to $12.16m. The operating margin (operating profit divided by revenue) improved to 27.1 per cent against 21 per cent in the previous year.
But net finance expenses decreased from $2.3m to $1.45m as a result of decreased average borrowing levels during the year. Expenses increased by 0.6 per cent.
Taranaki Regional Council chief executive Basil Chamberlain said yesterday the latest port result confirmed the value of Taranaki ownership of the region's port.
He added he was also happy with the level of dividend, despite the fact it falls well short of an established dividend payout policy of 60 per cent of net profit after tax, with a minimum payout of $2m, provided there is no requirement to use the funds within the port company.
"In dollar terms, this year's dividend is an excellent one," Mr Chamberlain said.
"The dividend policy has always been subject to the responsibility of the port's directors to retain sufficient capital to help fund future development. There is a lot of capital works required right now."
- © Fairfax NZ News
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