Ports of Auckland 2020 interim results

5 MinutesBy NZ Trucking magazineMarch 5, 2020

Ports of Auckland chief executive Tony Gibson has announced the company‘s half-year results.

“Our company is in the midst of delivering our 30-year master plan, a major investment programme which will increase capacity, efficiency and returns, as well as lay the foundation for us to meet our 2040 zero emission goal,” he said.

Gibson said delivering such a large investment programme whilst keeping the port working well has not been without challenges.

“We largely completed infrastructure work for terminal automation this period, enabling some capacity to be returned to terminal operations. There is still some work to do in the second half of the financial year, but the worst of the disruption from this work is behind us. The 2019 import peak did not see the same level of congestion or delay that was seen in 2018.”

Gibson said the ability to find staff in a tight labour market also affected volumes.

Automation will go live in two phases: the northern part of the terminal in late March and the southern area two to three months later. Once automation is fully live around the middle of the year, Gibson said the port would gain a significant amount of terminal capacity, from around 900,000 TEU a year to around 1.7 million TEU.

“That is enough capacity to handle the freight needs of a million more people in Auckland and should last us until the middle of the century. If necessary, beyond this date further changes to the port layout and greater levels of automation could deliver enough capacity for an Auckland population of around 5 million people.

Work on a new car handling building has progressed well and the building is expected to be finished on time and on budget around the middle of 2020.

“It will deliver new capacity in time for the Auckland fishing fleet to be relocated to Marsden wharf for the America‘s Cup and to handle an expected upturn in vehicle imports as New Zealand switches to an electric vehicle fleet.”

The port has started engagement for a new public space on the building‘s roof, and also applied for consent to deepen the channel.

Work at our Waikato Freight Hub has progressed well, with the completion this period of the new access road and bridge which will be vested with Waikato District Council. Construction of the first stage of heavy-duty pavement for the inland port part of the development is underway.

Financial performance

Gibson said as expected, revenue was flat while costs for the past six months were up, due to the investment programme, higher interest costs, and higher labour costs. As a result, net profit after tax was $17.2 million, compared with $24.4 million in the previous corresponding period (pcp).

“This situation will remain much the same for the full year. The company will not pay an interim dividend and will pay a lower full-year dividend as forecast. The second half of the year will be impacted by the new coronavirus. While we expect the impact to be temporary, we can‘t estimate the quantity of it yet.”

Gibson said one of the biggest issues for the port is the impact of automation on jobs.

“We expected around 50-60 roles to be affected, but as we get closer to go-live we can see several factors which may lead to a lesser impact.

“First, our container terminal operations are under-staffed due to a tight labour market. Second, some jobs may change but not disappear, and some new roles are being created. Third, when automation goes live we will also open our third container berth and we expect volume to increase.”

The port has also set a target to be a zero-emission port by 2040.