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Ports of Auckland lifts profit, pays dividend

Wednesday 17th February 2010

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Ports of Auckland lifted first-half profit by 49% after reining in costs, reducing debt and generating funds from the sale of Queens Wharf.

Net income rose to $13.9 million in the six months ended December 31, from $9.3 million a year earlier, the company said in a statement today. Operating costs, excluding depreciation, fell about 13%.

In line with most port companies, Auckland suffered a downturn in volumes from the global recession, increasing its focus on cost control. It tapped shareholder Auckland Regional Holdings for $40 million in additional equity funding in September, helping repay debt, consolidated its container operations at its Fergusson terminal and sold Queens Wharf for a $20 million gain.

The company has also developed Wiri Inland Port, a freight hub close to customers in South Auckland that is linked by rail to the port.

Increased profitability will allow the port to resume dividends, with a first-half payment of $9.9 million made today. Net debt fell to $266 million at Dec. 31from $349 million a year earlier. Finance costs dropped to $9.2 million from $15.2 million.

“A number of long-term initiatives are beginning to pay off,” chief executive Jens Madsen said in the statement. “The improved result is particularly pleasing because it was achieved during a period of lower trade volumes as a result of the global economic recession.”

Container volumes fell 3.7% to 438,438 TEU (twenty-foot equivalent units) in the first half. Vehicle imports fell 5.6% to 62,751. Revenue from port operations fell 6.8% to $82 million.

Madsen said container terminal volumes rose 7% in January from the same month last year and there has been an improvement in bulk, breakbulk and vehicle volumes.

Volatile markets and intense competition cloud the outlook for 2010, with the continuing trend to larger container ships and more extra-loaders. Cruise ship visits are forecast to reach a record 73 in 2010/11.

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