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STEP CHANGE IN SERVICE AT LYTTELTON PORT OF CHRISTCHURCH

Lyttelton Port of Christchurch (LPC) has achieved a step change in service during the last financial year, delivering record operational efficiency.

LPC Chief Executive Peter Davie said this new level of service has been boosted by the completion of some of the most important developments in the Port’s history. “These are crucial to our long term plan to future the proof the Port as the South Island’s major international trade gateway. We have transitioned well beyond recovery and have developed the Port to provide better service than ever before.”

Financials and Volumes

“The downturn in dairy prices and exports impacted LPC’s volumes but in the second half of the year volumes increased by 2% over the same period last year,” said Mr Davie. “This, along with new business secured in that period, resulted in container numbers being in line with expectation. So was general cargo, given the anticipated drop in coal volume. Imported car volumes remained strong. The long term forecast is for container numbers to double over the next decade and double again by 2041.

Impairment Background

“At 30 June 2016, the Directors assessed the Company’s value was lower than its equity value for accounting. The Company’s accounting value increased significantly when insurance proceeds relating to earthquake damage were received. At 30 June 2013 the Company’s equity value was $190 million. At the end of June 2014 this increased to $533 million, primarily as a result of booking insurance income of $358 million.

“Throughout the earthquake period the Company maintained strong earnings with many assets that were significantly damaged or destroyed. The impairment has arisen because the return generated by replacing destroyed assets, which do not in isolation increase operating earnings; and some of the capital projects that are necessary for the future of the Port, do not meet the immediate investment return established by the Directors.

“Future cash flow predictions underpin the position taken by the Directors, who now consider the Company’s accounting value to be more closely aligned to its actual value. The Company continues to trade profitably and maintains a significant cash balance, most of which is allocated for future capital projects. LPC is in a development phase and the dividends paid in the year reflect this.

Further financial information is available in LPC’s Annual Report: http://www.lpc.co.nz/wp-content/uploads/2015/06/LPC-AR-FINANCE-2016.pdf

“The Company’s EBITDA before one-offs remained in line with budget. The Company took an impairment of $99.5 million which significantly impacted the net profit after tax.

Revenue

         105,714

EBITDA

           23,444

Depreciation

         (14,393)

Interest Income

             8,236

Impairment

         (99,519)

Tax (including effect of impairment)

           22,427

Final Result

         (59,805)

Operational Performance

“There has been a record level of performance in the Container Terminal with a 16% improvement in crane rates for loading and unloading vessels. Health and Safety remains a top priority across our business and is a focus in everything we do. This is highlighted by the Total Recordable Injury Frequency Rate which reduced by 45% in the last year.

Customer Service

“An important reason LPC is attracting major new customers is because it offers the most comprehensive range of container services in the South Island and connections to all major markets world-wide. This has lead to Washdyke-based McCain Foods now exporting all its products through Lyttelton. As well, Golden Bay Cement now distributes its Canterbury and South Island tanks through LPC’s CityDepot.

“We are forming strategic relationships that ensure the best outcome for customers and the region. This is supported by our service expansion, including our new Inland Port, MidlandPort at Rolleston, providing a rail route for containers with Lyttelton Port which is a turning point in freight efficiency. Already major customers have come on board and we are working with companies throughout the supply chain, including transporters, exporters and importers.

“More than $200 million has been invested in cargo facilities since the earthquakes and these are delivering substantial returns. The new $85 million Cashin Quay 2 wharf, opened in February, doubles container berth capability, boosts container trade capacity and helps future proof the Port for forecast freight growth. As well, the reclamation in Te Awaparahi Bay grew from 8.4 to 9.85 hectares in the last year, increasing Container Terminal capacity by providing space for an extra 42,000 TEUs (20 foot containers), more imported car storage and a new log storage area.

In the Inner Harbour a number of jetties are being upgraded and the 15,000 square metre log storage area in front of Norwich Quay has been asphalted and had environmental and operational improvements.

Strategic Development

A major milestone was reached with Ministerial approval of the Lyttelton Port Recovery Plan (LPRP) which provides the framework for developing the Port for the future to support the region’s forecast trade growth. Community feedback overwhelmingly supported most of the developments proposed and many of the projects are now underway.

Future Focus

LPC is preparing for a significant forecast increase in freight and the arrival of bigger vessels carrying more containers. This requires an enlarged harbour navigation channel, deeper berths and more space to accommodate the larger vessels. LPC has proposed a shipping channel deepening project and is engaging with the public to seek feedback prior to submitting a resource consent application.

“Planning for redevelopment of the Dampier Bay (Te Ana) marina to breathe new life into the area and create a vibrant waterfront for the community to enjoy is also underway. This is an exciting time in our journey as we develop our Port for the future to ensure great customer service and support Canterbury and New Zealand’s economic prosperity.

 

LPC corporate office

41 Chapmans Road, Hillsborough, Christchurch 8022

Postal address
Private Bag 501, Lyttelton 8841, New Zealand

Phone: (+64 3) 328 8198
Email: allreceptionists@lpc.co.nz

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