Record post-deregulation profit for PrimePort Timaru as volumes increase
A container terminal that is "firing on all cylinders" and growing bulk trade has helped PrimePort Timaru record its best financial result since deregulation.
PrimePort pre-tax profits climbed 2.5 per cent to $4.98 million on the back of a significant lift in revenue and volume through the port.
Operational revenue grew by 5.3 percent to $14.28 million, up from $13.56 million the previous year. Total revenue increased by 13.6 percent to $18.26 million.
Confirming the details, chief executive Phil Melhopt said a dividend of $1.4 million would be paid, shared between the port's 50 percent shareholders, Timaru District Holdings and Port of Tauranga.
Log exports, up 26.4 per cent on 12 months ago, a growing cement trade, and a humming container terminal co-owned by freight management partnership Kotahi and PrimePort shareholder the Port of Tauranga, had driven up the port company's bottom line.
"It's really a reflection of the fact that the Timaru Container Terminal is back firing on all cylinders, and that's really the result of the Port of Tauranga's involvement, we have seen ongoing growth in the containers over the last three years.
"Port of Tauranga could pull levers that PrimePort couldn't really pull in the past, so that's a fundamental change in our structure.
"Instead of having a container terminal that was expensive to run for PrimePort, we have have a major tenant ... that is actually our single largest customer."
Company chairman Roger Gower said the container terminal handled a record 84,946 twenty foot equivalent units (TEUs).
Gower said ship visits were also up 9.7 per cent while bulk trade volumes passed the 1.5 million tonne mark.
He said improved market access had also come via a new Maersk shipping container service, the Tasman Star.
Launched in February, the new service gave Timaru a direct weekly connection with Tauranga and Australia.
The service was part of the "hub and spokes" operation PrimePort had conceived with Port of Tauranga back in 2013, using smaller ships to "feed the machine" operating out of Tauranga, Gower said.
The services operating out of Tauranga were the "big vessels, the largest vessels that have ever called in New Zealand, of 10,000 TEU", Gower said.
Gower also welcomed an expanded schedule of services by Swire Shipping, who had doubled their service, calling at Timaru every 18 days.
In response to the growing traffic through the port, management were "investing significantly in infrastructure renewals, to ensure we continue to provide our customers a high level of service", Gower said.
An example of that investment had been the port's new $2.4 million pilot launch, Kiwa, that replaced the 38-year-old Ohau back in August.
Melhopt said the company had also been busy expanding its capability and capacity over the past 12 months, with a focus on capital and repair and maintenance investment.
"It's about making sure we can keep the levels of service from our assets high."
Operating expenses over the past 12 months were 18.5 per cent higher than the previous year due to increased repairs and maintenance programmes, increased demand for marine services, and higher depreciation and finance costs as a result of recent asset acquisitions.
Melhopt said cruise ship visits were also a growing, extra margin on the port's business.
"We had three vessels last season, there's six booked for the 2018/19 season, that's all additional and an important part of our portfolio, and we encourage it."