Mixed half-year result for Port Otago

Media release (Port Otago) - 19 March 2025

The Port Otago Group today announced a half-year profit of $15.2 million for the six months ended 31 December 2024 – a $2.2 million increase on the comparable 2023/24 result of $13.0 million.

Port Otago Chair Tim Gibson said the profit figure did not tell the whole story. “It includes $6.4 million from the sale of property assets, masking a lower operating result, which was $15.5 million compared to $19.0 million for the same period last year – an 18% decrease.”

The impact of 26 cruise vessels arriving during the first six months of the financial year, compared to 33 vessels over the same period last year, had a material impact on port earnings and our regional economy.

Bulk cargo volumes and container throughput were also down. Log volumes dropped 8% to 462,000 tonnes. Container volumes were down to 113,200 TEU, reflecting the region’s wet spring delaying the export flow of dairy and meat products. Fortunately, transship container volumes offset the export drop and the overall decrease in container throughput was only 3% less than last year’s comparable period.

Meanwhile, labour and direct material costs were up $4.4 million, Mr Gibson said. “This is a 13% increase compared to the same period last year. It reflects the inflationary pressures being felt across the New Zealand economy and six months of the new 10-hour shifts’ model, which included a wage increase for our container terminal kaimahi.”

On a positive note, property rental income increased 5% to $19.9 million, on the back of regular rental reviews and completed projects now generating positive rental cashflow.

Mr Gibson says the six-month period included three significant highlights. “In October, we celebrated 150 years of port in Otago, culminating in the opening of the new Port Chalmers Maritime Museum.

“We refined our company strategy and are committed to being ‘always open’. That means having the inhouse capability to keep our harbour channel open and being responsive to extreme weather, thus ensuring our region’s exports continue to reach global consumers in an ever-challenging world. With this in mind, we partnered with Napier Port to acquire a new Damen trailing suction dredge, at a cost of $37 million.”

The third highlight was the December announcement of Southern Link – a joint venture with Dynes Transport to develop and operate an inland logistics hub in Mosgiel. “This is a key enabler for our region, providing much-needed large scale industrial space to meet future regional growth.”

Group equity was $730 million at 31 December 2024, with an equity ratio of 79% and borrowings of $146 million.

Looking ahead at the six months to 30 June 2025, Mr Gibson said overall export volumes were unlikely to catch up to last year’s levels, after the poor spring.

“Global trading conditions remain uncertain due to geopolitical changes. Potential impacts on global shipping routes and capacity could provide risk or opportunity. It’s too early to know which way.

“Within the property arm of our business, industrial development activity in our key property markets is still subdued, as higher building costs have yet to be matched by higher rentals. With lower long-term interest rates signalled, we expect development opportunities should begin appearing later this year and into early 2026.”

Directors declared an interim dividend of $9.0 million – up from 7.5 million last year – paid on 7 February 2025.

Contact
Tim Gibson
Chair, Port Otago Limited

Kevin Winders
Chief Executive, Port Otago Limited
Tel 027 432 1530

Interim Report To 31 December 2024

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Mixed half-year result for Port Otago