Port of Tauranga Ltd says its $2.782 million lift in net profit to $42.117m for the year to June 30, makes it hard to see how a takeover bid for its container trade by rival Ports of Auckland could be worthwhile.
"We are struggling to see how an offer would be value accretive to our shareholders in view of our strong result announced today, including a further 25 percent growth in containers over the past financial year," said chief executive Mark Cairns.
Container volumes at the port have grown to 582,072 TEUs -- a TEU is a standard measure in shipping: twenty-foot equivalent units -- by more than a compounding average of 10 percent a year since 1998.
Tauranga's 7 percent profit boost was on the back of a 14.8 percent rise in total operating revenue, and an increase in container throughput of 25 percent.
The company said in a statement to the NZX that its balance sheet remained strong, with a debt/debt plus equity ratio of 28.6 percent after payment of $44.231 million in dividends and investment of $34.452 million in capital expenditure.
And the company noted that it had fended off the global credit crisis by extending its bank facilities until December 2010 "at extremely favourable rates, compared with rates that could be obtained today".
Mr Cairns said that in the increasingly challenging economic climate, the "record year" should be seen as a clear demonstration of the company's resilience.
"Port of Tauranga continues to lead the New Zealand market in terms of trade volume, efficiency and profitability," he said.
Statistics New Zealand data showed the Port of Tauranga handled 52 percent more international cargo than its nearest competitor, Ports of Auckland, and 241 percent more export cargo."
Ports of Auckland and Port of Tauranga are competing to be a hub port for very large container ships, the "post-Panamax" ships which will carry up to 6000 containers, compared with the present largest ships carrying 4100 standard-sized containers.
Some industry commentators have said Northland's port at Marsden Point would be a logical choice, but Ports of Auckland used a press release this month to float the idea of buying the container business of Port of Tauranga.
Ports of Auckland is wholly owned by the commercial arm of Auckland Regional Council. Bay of Plenty's regional council has majority ownership of the listed Port of Tauranga, which last year proposed an equal merger of the two ports.
Mr Cairns said total trade for the year at Tauranga was up 7 percent at 13.525 million tonnes -- an increase of 877,125 tonnes.
Log exports increased by 5 percent, timber by 14 percent, and paper products by 9 percent. Russian government plans to lift excise taxes on softwood log exports from 20 percent to 80 percent are likely to further boost NZ exports next financial year -- possibly with double digit growth.
Mr Cairns said the lift in forestry exports was encouraging, as was an increasing trend to export logs in containers.
There was also a 25 percent increase in kiwifruit exports, while steel was up 14 percent and imports of palm kernel and grain for feeding dairy cattle were up by 94 percent. Dairy exports dropped by 40 percent, and imports of coal fell 58 percent.
Fonterra's dairy trade has traditionally been a key commodity for Tauranga, but Mr Cairns said public interest in the wins and losses of significant contracts often over-dramatised the natural "ebb and flow" of cargoes.
He said a total 33 percent increase in containers transhipped through the port during the year was an indication of the growing trend to "hubbing" in the shipping industry.
CMA CGM, the world's third largest shipping line, and Marfret earlier this year shift their fortnightly Panama service from Ports of Auckland to Port of Tauranga through its inland "metroport".
MetroPort - a huge depot for transhipping containers by road and rail, which makes it easier for Auckland industries to send their containers through Tauranga - has grown its traffic by 23 percent in the past year.
"The 170,000 TEUs now being railed through the greater Auckland region have facilitated the 620 percent growth in container volumes through the (Tauranga) port in the last 10 years," said Mr Cairns.