Port Otago delivers strong result as Southern Link and channel upgrades progress
Port Otago today announced an underlying profit* of $34.4 million for the 2025/26 financial year.
While down 7% on last year’s $36.9 million result, the contribution from operating activities was up $5.2 million due to increased revenue and lower operating expenses.
Group Net Profit After Tax was $48.7 million, compared with $64.6 million last year, reflecting lower gains from property revaluations and one-off property gains. Group revenue was up on last year at $136 million, compared to $132 million.
Dividends to shareholder Otago Regional Council (ORC) rose $2 million to $20 million, in line with the Statement of Corporate Intent.
Port Otago Chair Tim Gibson presented the result to the ORC today. “It was another big year of capital investment, as we steadily work towards being one step ahead of our region’s growth needs. During 2023/24 and 2024/25, we invested $46 million and $72 million, respectively, in long-term assets. This past year saw another $47 million invested.
“Our $15 million Tug Ōtepoti arrived in February, providing the second 70-tonne bollard pull tug needed to manoeuvre the bigger vessels we expect in the medium term. Our Marine team achieved 14m chart datum in June, and construction of the $36 million Damen trailing suction hopper dredge, Kapuka, is on schedule for a December delivery.”
Land side, it was an equally busy 12 months. In October 2025, the new $12.5m Port Chalmers Container Terminal rail pad was opened, representing the enabling stage of the Southern Link inland port project. Southern Link’s Fast-track application is now with its appointed panel, and a decision is expected in November. Construction is scheduled to commence in the new year.
Mr Gibson says it was a steady year for our four business units. “Container volumes were 4% up on last year, to 257,900 TEU, driven by favourable conditions on farm and in market. Bulk volumes were up 10% to 1.9 million tonnes on the back of one-off wind-thrown timber volumes created by the February storms. Cruise visits remained below pre-covid levels, with 74 vessels calling.
“The property business performed well with 100% occupancy and a lift in rental income. The year included handover of the ORC’s new head office, Aonui.”
Mr Gibson says safety remains the company’s most important priority. “Our safety outcomes this year were disappointing. We commissioned an independent SafePlus audit, and in March rolled out a Critical Risk Assurance Programme so we can track and close out corrective actions weekly rather than relying only on observations.”
“On the people front, we’re proud to report that 31% of our new starters this year were women, signalling continued progress in the building a diverse culture across our operational teams.”
The company continued to diversify the property portfolio, recycling the funds generated from property disposals into other higher yielding investment properties and replacing port operating assets. This increased total debt by $3 million, to $166 million, resulting in a strong shareholder equity ratio of 78%. Total assets increased to more than $1 billion during the year.
Looking ahead, container volumes are expected to be slightly higher in the first half of the financial year, with some exporters carrying over volumes from this year’s record season. The forecast El Niño conditions may temper grass growth, affecting volumes through the port in the second half.
“We expect log volumes to be lower than last year, as exporters return to normal cut levels. With 85 cruise ships booked, Port Otago is forecast to be New Zealand’s top cruise destination this season.
“Demand for new warehouse builds in Hamilton and Auckland remains low, but improving economic conditions should lift demand over the next 12 months.
“With Southern Link moving into construction and infrastructure investments slotting into place, we’re well set up for our region’s growing shipping needs, and our balance sheet allows us to continue that investment.”
* Port Otago uses underlying profit to measure its business performance, as it shows profit made from the four core business units – container, bulk, cruise and property – and excludes the impact of property revaluations.