Island Harbour, PO Box 1, Bluff 9842, New Zealand +64 3 212 8159 2020 Annual Report [email protected] RESILIENCE IN South Port NZ 2020 WWW.SOUTHPORT.CO.NZ Annual Report UNPRECEDENTED TIMES 02 SOUTH PORT ANNUAL REPORT 2020 Contents Financial Calendar Below Mediterranean Shipping Company – Service Overview 62 Company Profile and South Port Facts Opposite Business Continuity – COVID-19 Response 64 Significant Events 04 Our Customers 66 Review of Operations 05 Port Infrastructure 68 Corporate Social Responsibility 14 Auditor’s Report 70 Safety, Health & Wellbeing 16 Statement of Comprehensive Income/ Statement of Changes in Equity 73 Our People 22 Statement of Financial Position 74 Our Community 26 Statement of Cash Flows 75 Environment 34 Notes to the Financial Statements 76 Infrastructure 40 Financial and Operational Five Year Summary 97 Financial Highlights 44 Management Profiles 98 Directors’ Profiles 46 Glossary of Port and Shipping Terms 100 Statutory Report of Directors 48 Directory 101 Statutory Disclosure in Relation to Shareholders 50 Southern Region Production/ Corporate Governance Statement 52 Cargo Locations Inside back cover Financial Calendar 29 OCTOBER 2020 11 FEBRUARY 2021 30 JUNE 2021 Annual Meeting – 11:00am 2021 Interim Profit Announcement 2021 Financial Year End Venue: South Port Board Room Island Harbour, Bluff MARCH 2021 AUGUST 2021 2021 Interim Dividend Payment 2021 Annual Results Announcement 10 NOVEMBER 2020 2021 Interim Report Published Final Dividend Payment 2020 SOUTH PORT ANNUAL REPORT 03 04 SOUTH PORT ANNUAL REPORT 2020 Our Purpose To facilitate the best logistic solutions for the region. 2019/20 Significant Events Key Objectives Company Profile South Port Facts ö Operating NPAT of $9.43 million ö Continued higher R&M ö Blast freezer completes first (2019 - $9.79 million), a 3.6% expenditure on the Island Harbour full year of operation and has decrease on last year infrastructure as previously proved to be a good addition to ö In all activities the Company will ö South Port New Zealand Ltd ö Owns and manages assets which have signalled the services provided by the cold ensure a safe workplace is provided, (South Port) is the southernmost a book value of $59 million ö Total cargo of 3.27 million tonnes employee wellbeing is enhanced commercial port in New Zealand, store ö Directly employs 105 permanent staff (2019 3.52 million tonnes), a 7.2% ö Investigations have begun on and the physical environment is located at Bluff and operating on and utilises additional fixed term and decrease on last year the potential deepening of the ö OMV (Austrian oil and gas giant), respected a year-round, 24-hour basis. It casual staff to support our marine entrance channel, swinging basin unfortunately was not successful is situated in the rich productive ö Total log volumes exported ö Protect existing trade and develop activities and seasonal operations province of Southland, which and berth pockets at Bluff with their exploratory drilling growth opportunities - this aspect through the Port were down 33% is responsible for generating ö Is the only Southland based company campaign in the Great South of the strategy requires the on the previous year ö The Marine team is investigating a sizeable proportion of New listed on NZX – market capitalisation as Basin Company to deliver continuous the purchase of a 65-tonne Zealand’s total exports by at 30 June 2020 equated to $182 million ö Total container volumes down 2% improvement in these areas value. The region’s major cargo bollard pull tug at the Port to ö Open Country Dairy complete ö Handles in excess of 3.4 million tonnes on the previous year ö Strengthen and extend existing producing sites are situated within improve safety limits and provide construction of their third dryer of cargo in a normal trading year New Zealand port relationships/ 30 to 80 kms of the Port. ö Staff performed exceptionally additional capacity to handle and new warehouse at the alliances and position the business ö Offers full container, break bulk and ö The Port of Bluff has been well to changes in work processes larger vessels Awarua site for potential future sector bulk cargo capability and services the operating since 1877, while the as a result of COVID-19 rationalisation following main cargoes: ö New Zealand’s Aluminium Smelter ö South Port employed its first Company was formed in 1988 ö COVID-19 impacted cargo ö Develop and / or influence optimal having taken over the assets and ö import – alumina, petroleum products, announces the cancellation of female operator of large logistics solutions with port liabilities of the former Southland fertiliser, acid, stock food and cement operations, specifically forestry their Electricity Contract with machinery in the terminal linkages Harbour Board. products that were not handled Meridian and the potential closure ö export – aluminium, timber, logs, dairy, ö Leadership training delivered to through the Port during the Alert of the manufacturing facility at ö Optimise shareholder value and ö South Port was listed on the NZ meat by-products, fish and woodchips staff across various levels within reinvest in our business Stock Exchange (NZX) in 1994 Level 4 lockdown period Tiwai Point in August 2021 ö Has split its land-based operating the Company and has Environment Southland, ö Evaluate and acquire appropriate resource into four main divisions – dairy ö A full year dividend of 26.0 cents ö 29,200 MT of stock food imported the region’s local government ö South Port Directors involved technology to enhance, protect and warehousing, containers, cool and cold maintained (2019 – 26.0 cents) on the MV Blue Balestier, a record environmental agency, as its 66% in the Southland Regional expand our core business storage and general cargo for a single shipment into the Port majority shareholder. ö $1M expansion project for the Development Strategy (SoRDS) ö Infrastructure, fit for purpose, ö Undertakes its primary port operation ö South Port established its off- container yard completed ö 38,400 MT of woodchips, a record Aquaculture Team whole of life. Available, flexible and on a 40 ha. man-made Island Harbour port Intermodal Freight Centre providing additional storage areas shipment, was exported through resilient, with acceptable returns situated at Bluff ö A number of Bowtie workshops (IFC) in July 2016. Strategically and improving the efficiency of the Port on the MV Prince of Tokyo located adjacent to the KiwiRail completed during the year ö Operates a separate dedicated fuel the terminal operation railhead in Invercargill, the IFC berth at Bluff Town Wharf plus provides ö 4,330 TEU Mediterranean Shipping providing some very good allows importers and exporters in the Tiwai Wharf facility to the New ö A significant maintenance Company vessels now calling recommendations for workplace the Southland and Otago regions Zealand Aluminium Smelter (NZAS) dredging project of the swinging regularly at the Port safety improvements to distribute their products in a under a long-term licence basin and berth pockets was timely and efficient manner. ö A Port Open Day was held in ö Owns and operates an off-port completed – occurs every 12-15 March providing tours of the Island container packing/unpacking facility years. adjacent to the KiwiRail railhead at Harbour, container terminal, cold Mersey Street, Invercargill. The 8,000 ö Sacrificial anodes successfully store and our floating plant (tugs) m2 site houses a 4,000 m2 customs installed onto the Oyster Wharf ö Community Engagement Policy controlled and MPI transitional facility that are now being monitored on a was approved by the Board and ö Services vessels carrying approximately regular basis 1 million tonnes of cargo destined for opportunities are being promoted movement across the Tiwai Wharf each ö Successful installation of for staff involvement within the year, of which two thirds is raw material Impressed Current Cathodic community imports while one third is finished Protection (ICCP) to four more ö An independent review of pilotage aluminium product bays of the Access Bridge. practices at the Port was carried ö Has approximately 3 ha. of on-port land Undergoing regular monitoring out with a view to modernising our available for further port development now to analyse effectiveness of existing systems or industry establishment installation 2020 SOUTH PORT ANNUAL REPORT 05 Review of Operations OVERVIEW AND CARGO The operating after-tax profit of $9.43 Record volumes of bulk stock food Recent extensions to the container million (2019 - $9.79 million) is a 3.6% products were imported due to a late terminal area have provided the much decline on last year’s result in line season surge of shipments through needed additional space for the efficient with guidance provided in our 2019 the Port. These increases were partly storage and movement of containers Annual Report. This is a very pleasing attributed to COVID-19 restrictions that that was missing this time last year. This result considering total cargo was dictated a change in working conditions change has resulted in improvement 3,269,000 tonnes (2019 - 3,520,000 at the meat plants, slowing down the in the Port’s planning of the depot and tonnes) representing a 7.2% decrease in number of stock units being processed ship day operations. These efficiencies cargo volumes on the previous period. which eventually led to a shortage of combined with the increased throughput Volumes were impacted by a softening feed in the region. of refrigerated cargo at the Port has been of the international commodity markets one of the highlights for the Company and the COVID-19 pandemic, with the this past financial year. Company like the rest of the economy, BENEFITS OF DIVERSIFICATION affected most noticeably during the Alert The Mediterranean Shipping Company Level 4 lockdown period in April 2020.