Pleasing half-year result for Port Otago

Media Release – 24 February 2021

The Port Otago Group today announced a half-year profit of $18.3 million for the six months ended 31 December 2020. The comparable 2019/20 financial-year period result was $7.0 million.

The operating profit (i.e. excludes the investment property revaluation) of $8.4 million is $1.4 million lower than the comparative six-month period last year.

Port Otago Chairman Paul Rea says the result is pleasing, given the disruption and loss of business caused by Covid-19. "Our operating profit is only 14% back on the same period last year, which is a credit to everyone in the company, given the complete loss of revenue from the cruise business.

Despite Covid hanging over us, our front-line staff have adapted to new ways of working, kept cargo moving and ensured our border is safe. I take my hat off to the team for their professionalism and can-do attitude over this sustained period."

Revenue from marine and cargo services was down 16% on the comparable period, due to lost income from cruise vessel visits and a 5% dip in container TEU (Twenty-foot Equivalent Unit) throughput. Bulk cargo volumes recovered quickly post Covid-19 lockdown, with 924,000 tonnes handled through the business. Log customers put through 19% greater volumes for the six months, with exports increasing to 626,000 tonnes.

The bottom line was also affected by a reduction in operating costs. "Prompted by the loss of cruise and uncertainty around economic conditions, the company initiated a restructuring programme to reduce costs and offset expected reduced revenues. Through a combination of investment in systems, redundancies and early retirements, significant savings were achieved."

Mr Rea says the lift in the Group's investment property portfolio value reflects the strength of the industrial property market in Auckland and Hamilton, where the majority of the investment sits. Included in the interim result is an unrealised net change in the value of the Group's investment property portfolio of $12.5 million.

"The Group has been pursuing a strategy that involves the design, build and retention for leasing of high-spec warehouse/office units to quality tenants. A significant component of the increased property valuation is directly from valuation gains made over and above the financial cost of developing these long-term lease properties."

Mr Rea says that, looking ahead at the six months to 30 June 2021, container and bulk cargo income is anticipated to be similar to the same period last year. "We are expecting log volumes to track slightly ahead of last year, driven by favourable in-market conditions for exporters and customers making good use of the improved Dunedin Bulk Port infrastructure. With regard to cruise income, realistically, we don't anticipate cruise ships returning to New Zealand in 2021."

Directors declared an interim dividend of $4.5 million, similar to last year's interim dividend achieved pre-Covid impact.


Mr Paul Rea Mr Kevin Winders
Chair, Port Otago Limited Chief Executive, Port Otago Limited
Tel 021 993 700 Tel 027 432 1530



Interim Report to 31st December 2020