The statistics were impossible to ignore, said the judges when they reviewed the business performance of infrastructure company Port of Tauranga this year. As consequence, they gave it the 2012 Marsh Most Improved Performance Award.
Like many of this year’s Top 200 Award finalists and winners, Port of Tauranga has history of top level performance. It won this category in 1999 and has made Top 200 Award appearances in 2001, 2004, 2008 and last year when it was Top 200 Company of the Year Award finalist. This is an impressive organisation built on solid foundation of impressive performances over many years.
This year Port of Tauranga has again out-ranked New Zealand’s reasonably significant number of port-operating companies. And the company has to compete on merit and service, said the judges. “It does not pick up business by default or because it is monopoly.”
Its net profit grew 26 percent. It met the challenges of the grounding of the container ship MV Rena. Its total trade volume grew 20 percent; and not just because of record log volumes which, by the way, increased to record 4.9 million tonnes. The port handled 35 percent more containers, less than one third of which were diverted from Ports of Auckland due to that organisation’s long-running strike.
And this growth happened despite the fact New Zealand’s economy and exports weren’t exactly booming this year. All these market and economic realities should be appreciated, said the judges. The business did good job of leveraging its investment in people, plant, equipment and infrastructure, all of which came together to produce great result. Investors appreciated the performance by lifting Port of Tauranga’s market capitalisation by 30 percent. Shareholders were well rewarded.
Port of Tauranga is one of New Zealand’s mixed ownership success stories. It is still substantially publicly owned through the Bay of Plenty Regional Council. And its reputation for operational efficiency, container crane productivity, and focus on safety and care for its people are what drive its business success. These attributes all attract new services and increased business from existing lines.
Chairman John Parker said in his annual report that New Zealand ports must prepare for bigger ships. And his port’s plans to deal with that eventuality are “well advanced”. The company spent $39 million on capital works in 2012 and plans to spend $180 million on capital expenditures over the next three years.
And while its container terminal congestion challenges – created this year when cargo was diverted from Auckland – were unexpected, the company has since moved to provide “some headroom capacity” for the future. Meanwhile, forestry exports remained buoyant despite New Zealand’s strong dollar, and forecasts suggest continued demand from both China and India.
The company’s performance was also recognised this year by the Government’s Productivity Commission. Its report into international freight handling acknowledged Port of Tauranga’s excellence in managing high productivity. It said Tauranga was New Zealand’s highest performing port for container productivity and was ranked in the “upper decile” when benchmarked internationally. The port was this year also named finalist for Port Operator of the Year in the prestigious international Lloyd’s List Global Awards.
Port of Tauranga is successful mixed ownership model that competes successfully in competitive marketplace, and focuses on the safety and wellbeing of its employees, said the judges. Its safety record is one of the best of all New Zealand ports, even though it is enormously busy and growing. It is not surprising, they said, that the company is back to pick up yet another Top 200 Award.
And the commitment of the company’s employees was tested this year in the aftermath of the grounding of the Rena. Employees, work boats, tugs, offices, cargo sheds, berths and wharves were seconded in support of the salvage effort.
“Our staff members were integral to the company’s success this year,” said Mark Cairns in his chief executive’s report. An enormous team effort on their part, as well as the support of our service providers and the patience of our customers, enabled us to handle the growth and challenges of the past year, he wrote. M
MOST IMPROVED PERFORMANCE AWARD JUDGES’ COMMENTS
WINNER
PORT OF TAURANGA
Port of Tauranga grew its after tax profit 26 percent, total trade volumes 20 percent, handled 35 percent more containers and increased its log export volumes to record 4.9 million tonnes this year. And it wasn’t an easy year in which to grow port business. New Zealand’s trade and exports didn’t grow much and Tauranga also had to grapple with the grounding of the container ship MV Rena in its operational waters.
The company’s improved performance was also recognised by investors who, appreciating the returns it provides and the year’s obviously enhanced results, enjoyed share price returns in excess of 30 percent. It was another excellent performance improvement on top of very sound track record of growth. It deserved to win this Top 200 award category.
FINALIST
KIWIBANK
Kiwibank continues to grow and consolidate its place in New Zealand’s relatively competitive banking marketplace. It grew its revenue six percent and profitability by an impressive 272 percent. The figures reflect an important step up from its establishment phase and healthy bounce back from the financial pressures delivered by the global financial crisis years.
Kiwibank’s improved performance should be recognised for what it is: an important milestone in the evolution and ongoing success of home-grown bank. It is competing successfully with the large international banks by serving New Zealand’s non-commercial market well. Kiwibank has come through difficult time, managed it wisely and turned in significantly improved performance this year.
FINALIST
SKELLERUP HOLDINGS
Skellerup is transformed New Zealand manufacturing enterprise. It has evolved from highly indebted cluster of low-growth businesses to become vigorous company that is focused on building bottom line returns. Its performance this year means its after tax profits are double that achieved just two years ago. The result is impressive given prevailing stormy economic times for manufacturers.
The company had previously been struggling to deliver. It has turned that around through business rationalisation, leadership clarity and better management. The stock market has recognised Skellerup’s improved performance and pushed its share price up around 30 percent in the year. The company’s top and bottom line growth deserves to be recognised. Skellerup has taken its performance improvement to sustainably higher level.
