Port of Tauranga Ltd has delivered a strong six month result in the face of a decline in log export volumes, says chairman David Pilkington

'Our strategy of extending the port's freight catchment across New Zealand continues to deliver results for shareholders and the country's exporters and importers,” he says in announcing the half year result today.

Port dredging is expect to finish in July.

The Port of Tauranga Board has declared an interim dividend of 23 cents per share, up 4.6 per cent on the prior year's interim dividend. The record date for the interim dividend is 11 March 2016 and the payment date is 25 March 2016.

Total trade for the six months to 31 December 2015 up 1.1 per cent to 10.1 million tonnes. Reported and Underlying Group Net Profit After Tax is $38.6 million.

The result is slightly ahead of the prior year's interim Underlying Profit After Tax2 of $38.5 million, but lower than the prior half year reported Net Profit of $42.6 million, which included a non-recurring gain on the sale of Associate Companies of $4.1 million.

The result is supported by a strong 10.4 per cent rise in container volumes to 470,928 TEUs (20ft equivalent units), reinforcing Port of Tauranga's position as New Zealand's largest container terminal and the country's premier freight gateway.

Container gains were diluted by a 16.2 per cent decrease in log export volumes to 2.4 million tonnes from 2.8 million tonnes in the prior year.

Imports for the half year increased by 1.6 per cent while exports increased 0.8 per cent. Dairy product export volumes increase 29 per cent. Kiwifruit exports were up by 22.9 per cent.

Chief Executive Mark Cairns says the port company is in an excellent position to continue to grow its cargo volumes as more exporters and importers recognise the value the hub port strategy delivers with reliable, fast and cost-efficient routes to markets.

'With the Tauranga Harbour channel dredging proceeding well, we are on track to complete our contractual commitments with freight and logistics management company Kotahi by July, in order to see larger vessels starting to call at the container terminal by the end of 2016,” says Mark.

'This is the final building block in our five year $350 million investment programme to prepare for larger ships, which have the potential to deliver annual savings of as much as $300 million to New Zealand shippers.

'In the medium term, with the arrival of larger ships, we will be handling significantly larger volumes of cargo per shipment. We are looking at every aspect of our operations to ensure that we are ready for the step change later this year.”

Dredging specialist Rohde Nielsen is more than a third through the work to dredge Tauranga harbour's shipping channels to a depth of 14.5m inside the harbour entrance and 15.8m outside the harbour entrance. It is on track to complete the work in July, under budget and ahead of schedule.

The port company has expanded landside capacity at the Tauranga container terminal and also ordered two new container cranes and thirteen new straddle carriers.

They are expected by September and will significantly enhance the Port's 'best in class” terminal productivity, says Mark.

Increased efficiencies in the rail connection between Sulphur Point and the MetroPort inland freight hub resulted in a 24 per cent increase in the number of containers carried by rail compared with a year ago.

'We are increasing efficiencies in the supply chain by ensuring the north and southbound trains are fully utilised,” says Mark.

'Coda, our freight and logistics partnership with Kotahi, has been making good progress in securing significant domestic freight to provide southbound backhaul loads to balance the northbound dairy trains from the lower North Island.

'Port of Tauranga is now handling more than 90 per cent of the North Island dairy export volumes. Coda has commenced work on expanding its intermodal freight hub in Otahuhu to handle these increased volumes. This intermodal operation is expected to remove approximately 5,000 truck movements per year.”

Meanwhile, the Port has agreed a ten year freight deal with kiwifruit exporters Zespri International and Tauranga Kiwifruit Logistics, which will see a long term approach taken to investing in cool storage and port operations to cope with the expected growth in the kiwifruit industry.