Positive half-year result for Port Otago

Media Release – 20 March 2024

The Port Otago Group today announced a half-year profit of $13.0 million for the six months ended 31 December 2023, up 40% on the comparable 2022/23 result of $9.2 million.

Port Otago Chair Tim Gibson acknowledged the port’s two operational unions – Maritime Union of New Zealand (MUNZ) and Rail and Maritime Transport Union (RMTU) – for their positive engagement in achieving a new labour model for the business. “This is a significant boost for the business’s future, as it allows us to be more agile and responsive, while our kaimahi have an improved work/life balance.”

During the six-month period, container volumes increased by 51%, to 117,200 TEU, largely as a result of a 39,000 TEU increase in transship container volumes and the addition of the new ANL weekly trans-Tasman service. Full export and import container volumes were similar to the comparative period last year.

Revenue from marine and cargo services was up $8.2 million – 28% more than the comparable period last year – due to a higher number of total ship calls and improved container throughput. Cruise ship numbers over the six-month period were up slightly – from 31, to 33 vessels. Total bulk cargo volumes of 861,000 tonnes were down 6% for the six months, due to log volumes being 7% lower at 504,000 tonnes.

Mr Gibson says income from the property arm of the Group rose 13% to $19.0 million. “This increase reflects on-going rent reviews and the completion of three Te Rapa Gateway design/build/lease properties, which are now contributing to rental income.”

Group equity was $714 million at 31 December 2023, with an equity ratio of 79% and borrowings of $151 million. It was a busy six months for capital expenditure, with $26 million spent. This included construction of the three design/build/lease warehouses at Te Rapa Gateway, construction costs for the Whare Runaka project (the Otago Regional Council’s new home) and the Port Chalmers Maritime Museum refurbishment/Port Otago annex build. The rebuild of the Cross Wharf at Port Chalmers was also completed and the new pilot boat, Te Rauone, was delivered.

Looking ahead at the six months to 30 June 2024, Mr Gibson anticipates a positive 2023/24 fullyear result. “The container business is expected to continue performing above last year’s levels, as a result of the additional transship volumes, ANL service and new labour model.

“While our cruise season has been impacted by unsettled weather, we still expect 118 cruise ship visits – 17% up on last season and about 200,000 more passengers visiting our region. Meanwhile, bulk volumes are forecast to perform at similar levels through to the end of the financial year.

“On the property front, we are watching economic headwinds impact business activity and note that most NZX-listed property companies have reported a decrease in the fair value of their property portfolios. If conditions worsen over the next six months, there is potential downside risk for year-end fair value assessments.”

Directors declared an interim dividend of $7.5 million – up from 6.5 million last year – which was paid in February 2024.

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Interim Report to 31st December 2023