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Ports of Auckland - Source: NZPA / Mike Millet -
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Ports of Auckland has been recapitalised by its council shareholder and has reported a 74% fall in annual profit when non-cash writedowns are included.
The largest container port operator in the country says it has issued 50 million new shares worth $1 each to Auckland Regional Holdings, the commercial arm of Auckland Regional Council.
The port says $40 million was called an received on September 4 and a shareholder loan of $20 million has also been put in place.
The port on Tuesday reported a $5.4 million net profit after tax in the year to June 30, sharply down from $21.1 million last year.
But the profit is after writedowns on investment property and Northland Port Corporation shares, as a result of international financial reporting standards, of $10.3 million.
No investment property was sold and Ports of Auckland is retaining its 19.9% shareholding in Northland Port Corporation.
Normalised earnings before taxation fell to $15.7 million from $22.3 million.
The recapitalisation by the council is expected to annoy rivals, who will regard it as a subsidy by ratepayers. The future of ARH has not been clarified in the transition to Auckland's super city.
Between June 2005 and December 2008 Ports of Auckland paid $522.5 million in dividends and in-specie distributions to ARH.
The port received $40 million from the sale of Queens Wharf on August 18 and will record an accounting gain of around $20 million on the sale in the 2009/10 financial year.
Earnings before interest, tax, depreciation and amortisation for the container division rose 1.4% on 2007/08.
Imported vehicle volumes were down 36.2%. The port handled a record 843,590 TEU, or standard sized containers, an increase of 0.3%.
Managing director Jens Madsen says the port had increased its share of the upper North Island container market from 59% to 61%.
The port has 36% of the entire New Zealand container market.
"We are a significantly leaner and more efficient port than we were 12 months ago," says Madsen.
Madsen says productivity continued to improve, with average crane rate up 6.6%, straddle carrier moves per hour up 4.6% and staff hours per container down 7.7%.
Cost savings of $5 million are expected to be delivered by the end of the new financial year.
Madsen says that, like many other companies internationally, Ports of Auckland had been prudent in seeking to review its capital structure and funding arrangements with the aim of dealing, as best as possible, with the global economic crisis.
All the funds received had been used to reduce bank debt and further renegotiation of bank debt facilities were well advanced, he says.
While Ports of Auckland anticipated an improved financial result in 2009/10, the market remained volatile and the port was cautious about the overall outlook, Madsen says.
