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Ports of Auckland trims annual dividend as profit slips 28%

Thursday 31st August 2017

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Ports of Auckland trimmed its annual return to the city as profit dropped 28 percent as the Auckland Council-owned port beefed up spending on its automation programme, which has prompted it to rethink how it engages its workforce 

The port operator's board declared dividends of $51.3 million for the financial year, down from $54.3 million in 2016. Net profit fell to $60.3 million in the year ended June 30 from $84 million, although the year earlier figure was bolstered by a $17.6 million gain from the reversal of an impairment charge. 

Port chief executive Tony Gibson said the result was in line with expectations and that the decline in trading profit and dividends was down to the company's investment in preparing the maritime hub for the future. Operating expenses rose 16 percent to $119.6 million, outpacing a 5.4 percent increase in revenue to $222.4 million. 

"We are investing in our people and infrastructure to ensure we can continue to meet the growing needs of Auckland and the Upper North Island while respecting Aucklanders’ desire to protect the Waitematā harbour," Gibson said. "Our container terminal automation project is well underway and on track for completion in 2019."

That automation programme was approved last year, installing automated straddle carriers to load and unload trucks in an effort to boost capacity to between 1.6 million TEUs (20-foot equivalent units) and 1.7 million TEUs a year from the current 900,000 TEUs.

Ports of Auckland spent $70.4 million investing in property, plant and equipment in the 2017 year, the accounts show. Some $23.3 million of plant and equipment was added in the year, up from $10.1 million a year earlier, and after depreciation and work in progress costs were valued at $101.7 million as at June 30. 

Gibson said that investment was necessary to meet the city's growing needs, with an increase in activity through the year stretching its capacity to meet that demand. 

"The year has not been without challenges. Auckland's construction boom and growth have driven significant increases in freight volumes, notably vehicles and building materials," Gibson said. "As a consequence, we are experiencing capacity constraints on our general wharves, with some ships having to wait at anchor or at berth to unload."

Container volumes increased 5 percent to 952,331 TEUs, car and light commercial vehicle volumes climbed 20 percent to 297,383, and breakbulk and bulk volumes rose 11 percent to 6.46 million tonnes.

The automation project was expected to cut 50 jobs from the port operator's labour force, and the annual report shows Ports of Auckland employed 429 permanent staff in the 2017 year. 

Gibson said the impact of automation offers significant productivity gains, but has an impact on "traditional roles" in the industry and to that end Ports of Auckland has launched a 'Future of Work' programme to help staff and their families learn and manage the opportunities and risks associated with the changing environment. 

"We believe that a business like ours which is adopting new technologies has a responsibility to help staff and their families adapt," he said.

The workshops are currently under development and will be open to all staff and their families. The next stage of the programme will offer interactive learning sessions for staff. 

 

(BusinessDesk)



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