Port Otago profit rises 82% to $32m

The return of cruise ships, along with increased container tranships, has boosted Port Otago...
The return of cruise ships, along with increased container tranships, has boosted Port Otago earnings. PHOTO: GERARD O’BRIEN
Port Otago has recorded a healthy result for the year off the back of increased trade and the return of cruise ships.

The company’s annual report, released this week, revealed an underlying profit of $32million — up 82% on last year’s $17.6m

This has resulted in an annual dividend of $14m to its shareholder, the Otago Regional Council.

The return of cruise ships, along with increased container tranships, boosted port earnings, while positive development margins from the completion of three Te Rapa Gateway design/build/lease warehouses (compared with two the previous year) lifted property returns.

Port Otago chief executive Kevin Winders said the big surprise was the return of cruise ships in such high volumes.

"We had a couple of hard years with Covid-19, but they’ve come back and it’s been a good year," Mr Winders said.

"The cruise ship restart surprised us. We thought it might be quite a staged approach, but it ended up a full-on return.

"We kept our cruise ship team on for the two and a-half years of Covid-19."

The highlight of the year was welcoming Celebrity Eclipse in October last year — the first cruise ship to visit Fiordland and Port Otago for two and a-half years, Mr Winders


"There are the four pillars of our business, namely bulk, containers, cruise and property. Cruise had obviously been inactive for some time.

"We had some early teething problems, but once we worked it out, it paid dividends," he said.

The report said the container 20-foot equivalent unit (TEU) throughput of 186,400 was 12% higher, and tranship volumes increased 200% to 29,000 TEUs.

A total of 152 container vessels called during the year — up from 108 last year — as it welcomed the Maersk Polaris and ZIM services.

Meanwhile, total bulk cargo volumes rose 6% to 1.8 million tonnes, compared with 1.7 million tonnes last year.

This was due to log exports increasing 4% to 1 million tonnes, and fuel, fertiliser and cement volumes all up on the previous year’s volumes.

Mr Winders said the past year was when the company "stopped talking about Covid-19 as a business".

The company was aware of looming economic headwinds, particularly if the economy in China slowed down, he said.

"We’re an export-driven port, and our farmers are going to have lower returns.

"It doesn’t feel like it’s going to be a gang-busting year. We feel it’s likely going to be a challenging year," he said.

As a result, the company might have to rely on its cruise ship and property portfolios to offset this, Mr Winders said.

Other challenges for the coming year would be continuing its efforts to decarbonise the business, he said.

"We’re New Zealand’s highest rail-enabled port," Mr Winders said.

"About 60% of the port’s container volumes enter or leave the port by rail, but obviously we would like to have that number closer to 100."