The Port of Tauranga is today posting a $78.3 million profit on what chairman David Pilkington describes as a 'watershed year'.

In the year to June 30, the port extended its freight catchment, purchasing half of Prime Port Timaru and beginning the development of a new freight hub in Christchurch.

The Port of Tauranga.

The company also struck an alliance with freight management and logistics provider Kotahi, which will deliver up to 1.8 million export containers to the Port of Tauranga during the next 10 years.

Today, David says these strategic initiatives, combined with the significant investments made in prior years, have put in place a platform for long term growth and will deliver significant gains for importers and exporters across New Zealand.

'Reflecting our confidence in the port's prospects, and our certainty over forecast container volumes following the Kotahi alliance, the Board has today declared a final dividend of 29 cents per share, lifting the full-year, fully-imputed dividend to 50 cents per share,” says David.

This represents an 8.7 per cent increase over the prior year's 46 cents per share, he says.

The company's reported net profit after tax fell 30.2 per cent to $78.3m, from $112.1m last year. The 2013 year included a $34.9m one-off gain from the sale of an associate company.

Group earnings before interest, taxes, depreciation and amortisation increased 5.5 per cent to $142.5m from $135m. This is due to an increase in bulk cargo transported across the company's wharves which offset a temporary decline in container volumes.

Total cargo volumes rose 3.5 per cent to more than 19.7m tonnes, from 19.1m tonnes a year earlier.

Port of Tauranga chief executive Mark Cairns says Port of Tauranga seeks to profitably grow cargo volumes while providing an efficient and cost effective service to its customers.

'We successfully executed a number of further strategic building blocks during the year, and we are now reaping the benefits, most notably in the form of our long term alliance with freight and logistics management company Kotahi.

'We now have the certainty to invest in the infrastructure needed to accommodate the next generation of 6500 TEU (twenty foot equivalent unit) ships and to do so in a way that will deliver efficiencies for New Zealand shippers and appropriate returns to shareholders.”

Mark expects cargo volumes to increase in the coming year.

The first month of the current financial year shows continuing growth in container and log export volumes from the previous year.

Price pressure in the Chinese market is expected to impact on the volume of log exports in the short term, says Mark.

Dairy volumes handled by the port are expected to increase, and imported fertiliser and dairy feed supplements also to remain strong.

Container volumes are expected to exceed the previous record volumes set last financial year and an update will be provided to shareholders at the Annual Meeting on Thursday, October 23.

Imports during the year increased 6.4 per cent to nearly 6.4m tonnes, from 6m tonnes in the prior period.

This increase is driven primarily by imports for the buoyant agricultural and construction sectors.

Total exports rose 2 per cent to 13.4m tonnes from 13.1m tonnes in the prior period driven by dairy and forestry exports.

Container volumes fell 10 per cent to 759,587 TEUs from 848,448 in the prior year, primarily due to the loss of the Maersk Southern Star service.

The service resumed its Tauranga calls in August and, based on previous container volumes associated with this service, the port expects it to deliver an additional 70,000 TEUs per annum.

Transhipped cargo increased by nearly 5 per cent during the year. Transhipped containers now represent 26 per cent of the containers handled.

In Tauranga, Port of Tauranga Ltd continues to invest in new infrastructure as traffic through the port grows.

The port's seventh twin-lift gantry crane was commissioned this year and two new tug boats have been ordered for delivery in early 2015.

Port of Tauranga took control of the Timaru Container Terminal in December to deliver greater choice of cost-effective routes to South Island importers and exporters. Container volumes have already increased and a new harbour mobile crane has been ordered to handle the greater volumes.

The Rolleston inland port hub is making good progress. It's modelled on the proven MetroPort Auckland operation and due to open in early 2015.

It will allow Canterbury exporters to aggregate cargo bound for the Timaru Container Terminal, and similarly allow importers to efficiently access the Christchurch domestic market. It will eventually provide capacity for up to 100,000 TEUs per year.

In Auckland, the MetroBox container handling service expanded to a second location in Mangere, in partnership with Specialised Container Services.

The purchase of the 6.8 hectare Gateside Industrial Park next door to MetroPort has also provided expansion options in the long-term.