Ports Sector: Ports volume weakens but logs show resilience
March 17th, 2010
Both Port of Tauranga and Lyttelton Port Co reported a jump in log volumes in the first half, a period characterised by cost cutting as overall volumes weakened. Tauranga is finding it has to put the hard yards into its Metroport inland port in Auckland. Having taken the battle to Ports of Auckland’s backyard, it noted a dip in import volumes. The rail link between Auckland and Tauranga hasn’t been quite as busy as hoped. The company will deliver flat full-year earnings, with the container market likely to remain “volatile” with 10% of global container capacity currently idle.
Tonnage through Tauranga fell 5% to 6.5m metric tonnes, with container volumes falling 18%. Export tonnages of logs jumped 31% and dairy shipments climbed 44%. Lyttelton, which has chosen to persevere with talks on an operational merger with Port Otago, posted a 35% drop in first-half profit as sales tumbled. CEO Peter Davie says the remainder of the year will be “very challenging.”
Container volumes at the South Island port edged up 0.6% to 134,200 TEUs in the first half, while the volume of logs soared 112% to 130,800 tonnes. Both Tauranga and Lyttelton noted a pick-up in volumes of dairy exports, a sign Fonterra’s decision to reduce its departure points will improve volumes of those on its shortlist. Coming after Ports of Auckland warned volatile markets and intense competition will cloud the outlook for 2010, the picture is emerging of a long tail on the recession.
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