POT Annual Meeting 2025: Chair & Chief Executive's Address

Chair's Speech Chair - Julia Hoare Now to the highlights and challenges of the past year for the Port of Tauranga Group. In contrast to last year, I’m pleased to be reporting on strong growth across most cargo categories, and an improved financial performance, demonstrating Port of Tauranga’s resilience amidst significant ongoing domestic and international supply chain challenges. Total cargo volumes increased 7% to 25.3 million tonnes. Container numbers increased 5.3% to 1.2 million TEUs. Underlying Group profit - taking out the effects of the Marsden Maritime Holdings transaction, which I will talk about shortly - was $126 million, a 23% increase on the previous year. Leonard will go into more detail on individual cargo categories, but I think you will all agree that overall, this was an outstanding result. For the year ended 30 June 2025, revenue increased 11.3% to $464.7 million. Operating costs increased 8.1% to $236.3 million. Despite the prevailing economic conditions impacting cargo volumes for our subsidiary and associate companies, they managed a 15.3% increase in earnings to $10.9 million. The Board declared a final dividend of 9.7 cents per share to bring the total dividend for the 2025 financial year to 16.7 cents per share. Of course, the year was not without its challenges, including the ongoing saga of our resource consent application for the Stella Passage development. To recap the developments since our last Annual Meeting: In December 2024, the Environment Court approved part of the project, a berth extension at the container terminal. Unfortunately, that decision was immediately appealed. Due to the increasing urgency of the project, we opted to apply under the Fast-track Approvals Act, seeking to speed up the process. The Stella Passage project was listed in schedule 2 to the Act. Following a judicial review in August, the High Court found that the description in schedule 2 did not fully describe the project as submitted by the Port. In short, thanks to a drafting error on the part of Government officials, the description was missing the words “Mount Maunganui wharves.” As a result, the fast-track application, which we had hoped to complete by February 2026, is on hold. The Government has assured us that the mistake was theirs and there was no intention to break up or stymie the project. While we wait for the error to be fixed, we have lodged a back-up application, which involves asking the Minister for Infrastructure directly to accept our application into the process. We expect that approval in the coming weeks. To describe this long, drawn-out process as extremely frustrating – not to mention hugely costly for our company and all of New Zealand – would be an enormous understatement. I want to stress that Port of Tauranga is in no way trying to avoid its environmental responsibilities by trying to speed up the resource consent process. In fact, the Environment Court acknowledged that, from a Western science perspective, the development will have a minor effect in short-term, during construction, and a negligible effect in the long-term. We have protections in place for water quality, birds, marine mammals and noise. However, we have been unable to reach agreement with multiple hapū parties on the appropriate level of mitigation for the cultural effects of the development. We remain hopeful of reaching agreement and consultation continues. However, the urgency of the need for this project is growing. The container terminal berths are essentially at capacity. While we could handle more containers, we are unable to accommodate any new ships. The lack of capacity is also impacting our ability to effectively deal with congestion caused by ships arriving off schedule. Leonard will explain this shortly. Ultimately, it is the New Zealand economy, and all New Zealanders, that suffer. This is critical infrastructure essential for efficient two-way trade for New Zealand. The delays to construction are also inhibiting our plan to increase efficiency and reduce carbon emissions by introducing electric automated stacking cranes to the container terminal. We are strongly focused on decarbonisation as part of our commitment to long-term sustainability, so the waiting is frustrating for us. In the meantime, we are preparing for automation through emulation testing of the proposed system. More details on our decarbonisation plans are outlined in our second annual Climate-related Disclosures Report, just published yesterday and available on our website. Leonard will talk shortly about our plans to trial New Zealand’s first fully electric straddle carrier, as well as our planned hybrid tug. Unfortunately, our emissions actually increased for the 2025 financial year, during an unusually high refrigerated container peak season. Leonard will talk about the background and how we are looking to address this. One of the most significant achievements of the past year was the successful acquisition of Marsden Maritime Holdings and the formation of Northport Group Limited. A consortium comprising Port of Tauranga, Northland Regional Council and Tupu Tonu, the Ngāpuhi Investment Fund, completed the takeover of MMH. The buyout of all shares not already held by the Council led to MMH’s delisting from the NZX. Before the transaction, MMH owned 50% of Northport Limited - with Port of Tauranga owning the other half – plus around 150 hectares of industrial land adjacent to Northport. Under the new structure, Port of Tauranga now owns 50% of the merged group, the Council owns 43% and Tupu Tonu 7%. What this means is that the port operations and the undeveloped land next door to the port are under one umbrella. Earlier this month, the Environment Court granted Northport resource consent for a major expansion, involving nearly 12 hectares of reclamation and a 250-metre wharf extension and associated capital dredging. With the Government and KiwiRail progressing a proposal to extend the rail line to the port, this opens up incredible opportunity for growth for Northland and the Upper North Island economy. The simpler, unified company structure will allow better coordination as the land is developed for industrial, logistics or freight operations, especially as greater pressure comes on land use around Auckland. Turning to our governance, I’d like to thank my fellow Directors for their diligence over the past year to deliver value for you. I’m also pleased to report our Future Director, Scott Campbell, has agreed to stay on for an additional six months. The Future Director programme is an Institute of Directors initiative to develop the next generation of directors, and we are pleased to be supporting efforts to grow governance talent in the Bay of Plenty. We have appreciated Scott’s contribution to the Board in his first 12 months with us. Today, two Directors are up for re-election to the Board. Dean Bracewell joined the Board in December 2021. He was Managing Director of Freightways for more than 18 years. He is currently Chair of Property for Industry and a Director of Air New Zealand, the Halberg Trust and Northport Group. Also up for re-election is Brodie Stevens. Brodie joined the Board in August 2022 following his retirement as Country Manager for Swire Shipping New Zealand. He is currently a Director of PrimePort Timaru, NZ Post and Eastland Port and is Chair of the Maritime Superannuation Fund. I’ll ask Brodie and Dean to address the meeting in due course. I’d like to thank management and the entire Port team for their efforts in the past year, delivering excellent results. And finally, I’d also like to thank and acknowledge you, our shareholders, for your ongoing support. I’ll now invite Leonard to share details of the Port’s trade and operational performance over the past year, as well as an update on the first quarter of the 2026 financial year. Ngā mihi nui. Chief Executive's Speech Chief Executive - Leonard Sampson Thank you, Julia, and kia ora koutou. As outlined, the 2025 financial year was a successful one for the Port, although not without its frustrations and challenges. Port productivity continues to be a nationwide concern. It was mentioned in several submissions made to the recent Parliamentary Select Committee Inquiry, into the Port sector. However, there is no easy fix. One of most significant impacts to Port productivity is the on-time arrival of vessels. In the 2025 financial year, only 55% of container vessels arrived at Port of Tauranga on their agreed schedule, challenging our ability to manage container yard congestion and impacting crane operations. As the country’s main export gateway, Tauranga is typically the last port of call for international shipping services, as such, any delays incurred at previous New Zealand Ports are carried through to Tauranga, further exacerbating on-time performance. We have assembled a multi-disciplinary project team to progress efficiency initiatives across the business and welcome the select committee inquiry. Pleasingly we have recently been ranked by the world bank as the most productive port in Australasia with the Global Container Port Performance Index. It is also important to note, due to the ongoing resource consent delays - our current lack of berth capacity further constrains our ability to provide the resilient infrastructure needed to handle vessel delays. As we often repeat, it is crucial that Government and industry address the regulatory bottlenecks for nationally important infrastructure, as a productive and resilient New Zealand supply chain – including seaports, inland ports, road and rail networks, as well as coastal shipping – are essential to a thriving New Zealand economy. Improved productivity, however, can never compromise safety, and I’m pleased that our “safety always” mindset and proactive reporting culture continues to grow at Port of Tauranga. We encourage the reporting of all incidents, no matter how minor. In the 2025 financial year our Total Recordable Injury Frequency Rate, increased from 13.2 to 16. Per million hours worked. 91% of these recordable incidents were low in severity involving minor soft tissue sprains and strains. As New Zealand’s largest port, we take a leadership role in health and safety across the port industry. Our General Manager of Health and Safety, Pat Kirk, is on the Port Industry Health and Safety Leadership Group and a senior member of the Port Industry Fatigue Working Group. In recent years there has been significant cross-sector collaboration on the safety front, and we support the continuous improvement approach from all parties involved. Now looking at the detailed cargo trends over the past year: Log exports were the only significant commodity group to experience a drop in volume following a reduction in wind throw logs, post-Cyclone Gabrielle. As a result, Export Log volumes for the year decreased 5.9% to 6.3 million tonnes. Total dairy volumes increased 2.1% to 2.1 million tonnes, supported by a 50% increase in export transhipment. An increase in the proportion of refrigerated meat and dairy as well as growing kiwifruit volumes, contributed to a record year for refrigerated containers or Reefers as we call them. These increased 19.8% to 245,000 TEUs, which also put pressure on our terminal electrical plug-in capacity - resulting in increased use of diesel generators. This increase is reflected in our carbon emissions inventory for the year, and we will be installing additional fixed plugs for the coming reefer season to reduce generator usage. The kiwifruit season runs from March to October, spanning two financial years. On an annualised basis, the 2025 financial year saw a 30.9% increase in kiwifruit volumes. Bulk cargoes saw significant increases in volume, including stock feed up 46.5%, and fertiliser up 18.1%, reflecting the buoyant dairy sector. We hosted visits from 94 cruise ships over the past year, with the first cruise vessel of this Cruise season arriving on 16th October. As part of a nationwide trend, we are expecting cruise numbers to reduce to around 85 visits this summer, however with a tendency to larger ships we expect a similar number of passengers to last season. In response to New Zealand’s urgent energy needs, coal imports resumed at Tauranga after two years’ hiatus. Coal is handled through a specialist enclosed conveyor and hopper system and then railed directly to Huntly Power Station. This ensures it is a dust free operation with no additional road traffic. Air quality continues to be a focus for us, and we have seen continuous improvement in air quality metrics throughout the year, in conjunction with increased monitoring both, inside and outside of the port gates. As Julia mentioned, we are pursuing other decarbonisation opportunities while we wait for the go-ahead on the resource consent and deployment of electric automated stacking cranes. With the support of EECA funding we will trial New Zealand’s first fully electric straddle carrier. We already have several hybrid straddles in our fleet, with another six on order. The new electric straddle trial gives us the opportunity to test performance and charging infrastructure within our unique operating environment. In February this year, we commissioned a new container crane, after dismantling our two oldest cranes, and we will order additional cranes to serve the new container berth once the Stella Passage resource consent is granted. We have also ordered our first hybrid tug to replace the Sir Robert. The new tug, expected to be delivered in 2027, will be larger at 32 metres in length and will provide greater towage capacity for larger vessels. Later this year, we will also commence the second stage of our already consented capital dredging project. This will deepen the main channel to 16 metres below chart datum. This will allow the larger container vessels already calling to transit at both low and high tide, as well as provide the ability to cater for the next generation of container vessels expected in the future. I’ll now give a quick update on our first quarter’s activity. Total trade volumes for the quarter were 6.6 million tonnes, up 5.9% on the same quarter last year. Total container volumes were 319 000 TEU, up 9% on the same quarter last year. Based on the first quarter’s results, and notwithstanding any significant changes to trading conditions, we expect full-year underlying earnings to be in the range of $137 to 147 million. Underpinned by our people, operational resilience, and diversity of cargos and income, we remain confident in our ability to deliver sustainable financial returns over the long-term. I would now like to thank our team, our customers, business partners and service providers for the vital roles you all play in our success. We sincerely appreciate our customers’ support and understanding as we push for the much-needed Stella Passage resource consent and acknowledge the costs and frustration incurred as a result of ongoing delays. I’d also like to show appreciation for the ongoing support from our communities both in the Bay of Plenty and further afield. We take pride in being part of the progress that drives prosperity and wellbeing for New Zealand. Finally, I would like to acknowledge the continued trust and support in Port of Tauranga by you; our shareholders, thank you. Together, we are connecting New Zealand and the World. Ngā mihi nui, kia koutou katoa. Thank you.