POTL Annual Meeting 2023: Chair & Chief Executive’s Address

Chair’s Speech
Annual Meeting 2023
Friday, 27 October 2023 at 1pm
Chair – Julia Hoare
I’ll start with the highlights and challenges of the past year for the Port of
Tauranga Group.
The 12 months to June 2023 was certainly a year of two halves. In the first, we
were assisted by an increase in container transhipment, and we saw the welcome
return of cruise ships over the summer.
In the second half of the year, we experienced the impacts of the extreme
weather events in the North Island. While Port of Tauranga was fortunate enough
to not incur any damage to port infrastructure, there was significant disruption to
transport networks and some cargo volumes were affected.
Cyclone Gabrielle, in particular, caused much damage across the forestry sector.
This resulted in the early harvesting of some cyclone-damaged trees. As a result,
export log volumes through Tauranga remained strong throughout the year.
Since April, we have seen a significant decrease in imported container volumes
due to a weaker domestic economy, as reflected in the national trade data
reported by Statistics NZ over the last two quarters.
Despite these impacts, I am pleased to report that the company performed well
and returned another year of excellent financial results.
Group Net Profit After Tax increased 5.2% on the previous year, to $117.1 million.
This was largely driven by the parent company earnings, which increased 7.7%
while subsidiary and associate company earnings declined 10.7%.

Total revenue was $420.9 million, an increase of 12.2%.
Costs also grew substantially, especially for labour and fuel. Operating expenses
increased 15.6% to $210.6 million. In addition, renegotiation of our contracts with
KiwiRail led to a significant increase in rail costs, which is likely to have caused
modal shift for some importers in particular.
The Board declared a final dividend of 8.8 cents per share, to bring the total
dividend for the 2023 financial year to 15.6 cents per share – a 6.1% annual
increase.
As New Zealand’s largest port, we continue to invest in the capacity, resilience
and efficiency of the New Zealand supply chain.
We have recently opened the Ruakura Inland Port in Hamilton, directly
connecting the Waikato region by rail to our facilities in Auckland and Tauranga. It
is a 50 year, 50:50 joint venture with Tainui Group Holdings or TGH.
In TGH we have found a long-term partner that shares our vision and values. The
partnership brings together our expertise in cargo handling and logistics and
TGH’s deep regional connections and we look forward to continuing to
strengthen our relationship.
Ruakura Inland Port is a real game changer for the Upper North Island freight
network, unlocking environmental and economic benefits for importers and
exporters based, or soon to be based, in the Waikato.
Inland ports play a crucial role in our vision for a more integrated and efficient
Upper North Island supply chain.
This investment is the latest in more than a decade of developments designed to
ensure New Zealand remains competitive internationally, by facilitating visits
from bigger container ships. Our strategy supports New Zealand’s
decarbonisaton efforts, addresses shipping capacity constraints and protects our
nation’s access to its global customers.
There is still one crucial development urgently required.

As you are no doubt well aware, we have been trying to obtain a resource
consent to convert some of our land at Sulphur Point into a third container ship
berth. This development has been included in the Regional Coastal Environment
Plan for decades, and formal consultation began back in early 2019.
An Environment Court hearing on the application was held across three weeks in
early March this year. We are still waiting for an outcome and are hopeful of an
imminent resolution.
The berth project is critical to the New Zealand economy. Without it, importers
and exporters will face capacity constraints within a few years. We already have a
number of weekly services on our waiting list for berthing windows.
The project is an essential one for building resilience too. The catastrophic
weather events of this year have demonstrated once again that New Zealand is in
need of greater resilience and capacity in the national supply chain.
Concurrently, we are pursuing our plans to automate new container storage
areas at the terminal. The automation is planned to both accelerate our
decarbonisation progress and increase our capacity within the current footprint.
Our biggest source of greenhouse gas emissions is diesel use, so opting for all-
electric automatic stacking cranes offers significant efficiencies over an
equivalent diesel straddle operation.
Leonard will expand on the automation project in his presentation.
Our capacity-building plans are critical to the future of New Zealand Inc. We
simply cannot meet our trade needs as a nation without investment in
infrastructure, particularly in the Upper North Island freight network – including
ports.
The current regulatory framework does not always encourage nor facilitate
investment in new or existing infrastructure - even when it is environmentally
sound and/or critical to the national economy. In our view, there are challenges
in upgrading existing assets to ensure they are fully utilised. As a result the
adoption of new technology such as automation may be delayed. Therefore we
are missing out on the associated economic and environmental benefits,
including decarbonisation opportunities.

The new Government has an opportunity to smooth the path for sound
investment, as well as deliver the required transport infrastructure, to facilitate a
truly integrated, resilient and cost-effective Upper North Island supply chain.
Port of Tauranga is strongly focused on decarbonisation as part of our
commitment to long-term sustainability. We have made significant progress in
improving fuel efficiency and reducing waste and, in accordance with New
Zealand’s commitment under the Paris Agreement, are committed to reaching
net zero greenhouse gas emissions by 2050. Our Scope 1 and 2 and key Scope 3
emissions have been audited annually since 2017.
We are undertaking a large volume of work to prepare us for the new,
comprehensive Climate-Related Disclosures regime. We have engaged external
expertise to assist us with this work, and we have been supported by external
advice at a governance level too.
We will produce our first audited Climate-Related Disclosures report with our
annual results in 2024. We are also mindful that our future disclosures will also
need to consider the Taskforce on Nature Related Disclosures.
As promised at last year’s Annual Meeting, we have undertaken a thorough
benchmarking exercise on Directors’ fees and, as part of our information
accompanying our resolutions, we have shared with you a summary of the
independent report by Ernst & Young.
EY has provided us with benchmark data for a comparator group of New Zealand
companies of similar size or operations. What we are recommending to you
today raises Port of Tauranga Limited directors’ fees to the top of the bottom
25th percentile of this sample group, meaning the fee level of 75% of the
companies in this group are above the amount we are requesting approval for in
our resolution. I will comment more on this shortly.
Our last directors’ fee review was undertaken in 2021. Since then, the regulatory
and compliance landscape has continued to evolve.
The remit of our Audit Committee has been expanded to include broader
sustainability and our obligations under the Carbon-Related Disclosures regime.

The Board has also recently established an additional Board sub-committee, the
Health and Safety Committee, to assist us in focusing even more deeply on our
health and safety practices and responsibilities. Whilst we consider we have a
strong health and safety culture, the performance of the New Zealand port
industry has rightly been in the spotlight in recent years and we must continue to
pursue continuous improvement. There is always room for improvement.
We believe our recommendation sets the fee pool at a level that will continue to
attract and retain high-performing Directors. We are seeking shareholder
approval for an increase in the aggregate Directors’ Fee Pool to $1.125 million.
In that figure we have included headroom of around 16%. It is not our intention
to use this headroom to increase base fees this year, and our proposed individual
fee increases are set out in the resolution. Rather, it gives us flexibility to
accommodate additional duties as required, future CPI increases where
appropriate, and also gives us some flexibility to manage transitions around
Board appointments.
We will deal with the relevant resolution at the conclusion of Leonard’s
presentation.
On behalf of Directors and the company, I would like to thank Sir Rob McLeod,
who will soon retire from the Board after seven years’ service. Sir Rob is one of
the two directors appointed by our cornerstone shareholder, Quayside Holdings,
and as a result of Sir Rob stepping down from the Quayside board, he will cease
to also be a Port of Tauranga director.
Sir Rob’s insights and expertise have been highly valued, and his commerical
acumen and sound judgement have served us well over the last few years.
As announced last week, Quayside Holdings has recommended the appointment
of Fraser Whineray as their second representative on our Board.
Fraser brings a wealth of executive experience, including as Chief Operating
Officer at Fonterra and Chief Executive of Mercury. He has also held governance
positions with Tilt Renewables, Opus (which is now WSP), and AgriZero.

His deep understanding of global trade and supply chains will be invaluable as
we continue to invest in resilience and capacity for the benefit of the New
Zealand supply chain.
Fraser will replace Sir Rob at the end of October. As the announcement was
outside the statutory timeframes to be included in our 2023 resolutions to you,
our request for your approval of his appointment will be included in the
resolutions at our 2024 Annual Meeting.
I’d now like to invite Leonard to share his update on the company’s trade and
operational performance over the past year and some guidance on what we can
expect in FY2024 and beyond.

---

Chief Executive’s Speech
Annual Meeting 2023
Friday, 27 October 2023 at 1pm
Chief Executive – Leonard Sampson
Thank you, Julia, and kia ora koutou
As Julia described, it was a year of two halves - as we moved away from the congestion
that has plagued our operations whilst at the same time balancing the impacts of a
downturn in import demand and sluggish global commodity prices.
Once again, our diversity of cargoes and long-term freight agreements with key
customers have helped us remain resilient.
In March this year, New Zealand ports reinstated proforma berthing windows after more
than two years of extreme congestion. Prior to March, more than two thirds of vessels
arriving at Tauranga were off schedule - putting unprecedented pressure on our facilities
at the container terminal. You can see from this graph the impact on storage volumes at
the container terminal due to the lack of shipping reliability has been significant, with
over 5,000 containers more than usual levels.
The improvements since March in schedule integrity are helping to return productivity to
normal levels. Our crane rate (which is the moves per hour by crane) has over the past 3
months has averaged 30 moves per hour, after dipping to the low-20s during the peak of
congestion.
Looking at cargo trends over the past year, total trade decreased 3.5% to 24.7 million
tonnes, imports decreased 7% to 9.0 million tonnes, whilst export volumes decreased
1.5% to 15.7 million tonnes.
Container volumes for the year decreased 5.1% to 1.18 million TEU.
Log exports however, increased for the year 2.6% to 6.2 million tonnes, with an
unexpected boost in the second half of the financial year due to an influx of cyclone-
damaged trees that were harvested early.

Dairy exports, including transhipment cargo, increased 2.7%, whilst meat exports
increased 3% in volume.
Kiwifruit exports were impacted by weather and fruit quality issues, decreasing 20.3%
compared with the previous year. - However, the long-term outlook for the kiwifruit
remains strong.
We welcomed 88 cruise ships over the last summer season, and the first cruise ship of
this season arrived on October 18
th
. At present we have 112 cruise vessels booked over
the next few months – close to our record 116 visits in the 2018-2019 season.
We are excited about the new business opportunities presented by the Ruakura Inland
Port, our joint venture with Tainui Group Holdings.
The inland port – which is directly connected via rail to the Tauranga container terminal
as well as MetroPort inland Port in Auckland, is part of the Ruakura Superhub, a giant
logistics and commercial precinct near central Hamilton.
The Superhub’s first tenants include Kmart, which has started importing containers
through the inland port, with a new dairy cool store due to start exporting next month.
Our subsidiary company, Quality Marshalling, is operating the inland port on behalf of
the joint venture entity.
The facility gives us some headroom whilst we pursue our plans to increase capacity at
the Tauranga Container Terminal, with the construction of a new berth and introduction
of terminal automation, both within the current footprint.
We are close to selecting a vendor for the automation project, which will also help us to
improve safety, reduce fuel consumption and reduce greenhouse gas emissions.
We have completed an $11 million dollar electricity infrastructure upgrade in anticipation
of the development, the new technology involves fully-electric, rail-mounted gantry
cranes, together with manned, hybrid straddles running between the container stack
and ship-side.
I will now play a short video now that demonstrates how the berth extension and
automation developments will work together.
Similar automation models are already in use in some of the world’s most efficient
container terminals, including Singapore, Shanghai, London, Antwerp, and Melbourne. I
can reassure you that we will not be testing new or unproven technologies.
In the meantime, we are continuing to invest new equipment that is more fuel efficient,
improves safety and increases productivity.

Last month we received four new hybrid straddle carriers, which are currently being
commissioned. We already have three in the fleet which have proven to be around 25%
more fuel efficient than our older diesel-electric models.
In May we took delivery of our new pilot launch, theTroy Evans,named after the late pilot
and tug master who helped design her. Troy was an internationally recognised champion
of marine safety, and the new launch contains a raft of new safety features.
We have recently dismantled the oldest container crane in our fleet, which was
commissioned when the container terminal started in 1992, and in January next year we
will start assembly of a new crane after it arrives from the Liebherr factory in Ireland.
From a safety perspective, Port of Tauranga continues to take a lead role in port sector
safety, with involvement in both the Port Industry Association and Port Health and Safety
Leadership Group.
Our own Pat Kirk, GM Health and Safety, is the current chair of the Port Industry
Association and is part of the sector wide Leadership Group. Pat has been heavily
involved in the development of industry-wide initiatives such as, the Fatigue Risk
Management System, and draft Approved Code of Practice. Both initiatives have been
developed in consultation with business, unions, and regulatory agencies - Maritime NZ
and WorkSafe.
Port of Tauranga continues to take its environmental responsibilities very seriously, with
a special focus on air and water quality in and around the port.
Dust generation from port activities complies with the National Environmental Standard
for Air Quality – but that’s not good enough for us. In the past few years, we have
installed additional wind fences, increased wharf sweeping and improved traffic
management and cargo handling systems. We’ve utilised water misting hoppers to
handle dry cargo from bulk ships and strictly enforce wind limits on handling potentially
dusty cargoes with newly installed alarm lights to alert stevedores when wind speeds
have exceeded safe thresholds.
Pollution monitors on the port boundary show a significant improvement in air quality
since 2019, and over the past year, we have increased funding for air quality monitoring
within the Mount Maunganui industrial area which has helped to facilitate the Bay of
Plenty Regional Council to introduce supplementary air sensors into nearby residential
areas.
The Council is now posting real-time air quality indicators on its website with the 12 new
sensors designed to detect particulate matter, including salt-laden air and as nitrogen
dioxide, which is generated from petrol and diesel vehicles as well as vessels.

Port of Tauranga also has an extensive water quality monitoring programme as part of
our stormwater resource consents. We test for suspended solids, heavy metal toxicants
and other contaminants. All monitoring results are currently well within compliance of
consent limits, as well as the Australia/New Zealand Conservation Council guidelines for
marine water quality.
However, as with air quality, we are not content to just comply with consented conditions
and in this regard, we are currently investigating new technologies to further improve
stormwater quality, particularly on the older Mount Maunganui wharves.
As Julia mentioned, we have started preparations to report under the new, mandatory
Climate Related Disclosures regime and increased frequency and intensity of major
weather events are being factored into our infrastructure planning. It is likely that we will
continue to see an increase in operational delays, as well as higher insurance premiums
and other associated costs.
From an emissions perspective, our total greenhouse gas emissions for the year
decreased 7.3% to just over 40,000 tonnes. This was primarily due to reduced cargo
volumes. However, whilst total emissions reductions are a priority, we also closely
monitor our emissions intensity – which is greenhouse gas emissions per cargo tonne. I
am happy to report in this regard we reduced greenhouse gas emissions intensity by
3.8% over the past year.
Of course, our biggest opportunity to significantly reduce emissions in future lies in
automation. The all-electric automatic stacking cranes produce significantly fewer
emissions than an equivalent diesel straddle operation.
The trend to larger, more efficient vessels also has benefits for New Zealand’s overall
export emissions profile, as they produce fewer greenhouse gas emissions per
container. This will continue to encourage New Zealand’s shippers to aggregate cargo to
the big ship services that currently only call at Port of Tauranga.
I’ll now give a quick update on trade in the first quarter and our outlook for the financial
year 2024.
As expected, we have continued to see global economic volatility, with total trade down
9.0% in the three months to 30 September compared with the same period last year.
Coastal shipping changes along with an early end to the kiwifruit season and slow start
to the dairy export season have all been contributors.
Softening international commodity pricing and demand, has had an impact on some key
exports as shippers as have hit pause to instead focus on building inventory, or look for
alternative export markets.

Our total container volumes for the period decreased 20.9% to just over 250,000 TEU,
with the main impact from reduced transhipment volumes decreasing 31% as a result
from changes in vessel rotations. Containerised imports are down 23% on the previous
year reflecting weaker domestic consumption and significant increases rail costs.
However, we do expect some recovery in the next few months, with the usual pre-
Christmas boost to imports.
Based on the first quarter’s results, we expect full-year earnings to be in the range of $95
to $107 million dollars.
As always, our strong diversity of cargoes, income streams, and our underlying
operational efficiency, will continue to hold us in good stead. It is clear however that
rising costs, softer international commodity prices and geopolitical conflicts will continue
to create challenges for trade.
Before I wrap up, I’d like to thank our team members for their dedication, this photo was
taken a few weeks ago when our staff and their families supported “The - Keep New
Zealand Beautiful 2023 Clean Up” - by collecting over 150 kilograms of rubbish from the
streets and beaches of Mount Maunganui.
I’d also like to thank our business partners for their continued support, especially in
helping us to get projects, such as the Ruakura Inland Port up and running.
Thank you too, - to our customers, who remained patient and understanding through
what we now call “the congestion years”.
Finally, my appreciation to you, - as shareholders, - for your continued support.
Together we are connecting New Zealand and the World.
Ngā mihi nui kia koutou katoa.
Thank you.

---

Port of Tauranga reports lower cargo volumes in first quarter
Port of Tauranga Limited (NZX:POT) today reported a drop in cargo
volumes in the first quarter of the 2024 financial year.
In the three months to 30 September, total trade was down 9.0% in
volume compared to the same period last year, to 5.8 million tonnes.
Port of Tauranga Chief Executive, Leonard Sampson, told the company’s
Annual Meeting of Shareholders today that a number of factors had
contributed to the drop in cargo volumes.
Continued global economic volatility, coastal shipping changes along with
an early end to the kiwifruit season and slow start to the dairy export
season were all contributors.
“Softening international commodity pricing and demand has had an
impact on some key exports as shippers have hit pause to instead focus
on building inventory, or look for alternative international markets,” he
said.
Total container volumes in the first 3 months have decreased 20.9% to
just over 250,000 TEU
1
.
A key factor in the reduction in container volumes was due to changes in
coastal vessel rotations resulting in containersed transhipment decreasing
31% for the period.
Containerised imports are down 23% on the previous year reflecting
weaker domestic consumption and increased rail costs,” he said.
“However, we expect some recovery due to the usual pre-Christmas boost
to imports.
1
TEU = twenty foot equivalent unit, a standard measure of shipping containers
Media Release
27 OCTOBER 2023

“Our diverse range of cargoes will continue to hold us in good stead as we navigate the
challenging economic conditions.”
Port of Tauranga is expecting close to a record number of cruise ship visits this summer,
with 112 currently booked. This compares with 88 last summer and the record of 116
visits pre-Covid.
Based on the first quarter’s results, and notwithstanding any significant changes to
market conditions, Port of Tauranga expects full-year earnings to be in the range of $95
million to $107 million.
For further details, contact:
Rochelle Lockley
GM Communications
021 865 884

---

Annual Meeting of Shareholders
27 October 2023

Julia Hoare
Chair

4
• Doug
Leeder
Sir Rob McLeod
• BrBrodieodi
e Stevens
Board of Directors
Alison Andrew
Dean Bracewell
Alastair Lawrence
(apologies)
Julia Hoare
Doug Leeder
Brodie Stevens

5
Senior management team
Leonard Sampson
Chief Executive
Simon Kebbell
Chief Financial Officer
Rochelle Lockley
GM Communications
Melanie Dyer
GM Corporate Services
Pat Kirk
GM Health and Safety
Dan Kneebone
GM Property and Infrastructure
Blair Hamill
GM Commercial

6

7
For the year ended 30 June 2023
Group net profit after tax up 5.2%
$100,577
$88,679
$102,375
$111,317
$117,136
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
20192020202120222023
$’000s

8
For the year ended 30 June 2023
Ordinary dividends increased 6.1%
13.3
12.4
13.5
14.7
15.6
5.0
0
2
4
6
8
10
12
14
16
20192020202120222023
CPS
Ordinary
Special

Proposed berth extension
Port of Tauranga Limited

Leonard Sampson
Chief Executive

16
Pro-forma berth window reinstatement

17
Source: FIGS, Ministry of Transport
New Zealand port productivity
29.6
15.0
20.0
25.0
30.0
35.0
40.0
2018 Q12018 Q22018 Q32018 Q42019 Q12019 Q22019 Q32019 Q42020 Q12020 Q22020 Q32020 Q42021 Q12021 Q22021 Q32021 Q42022 Q12022 Q22022 Q32022 Q42023 Q12023 Q2
Crane Rate
New Zealand ports - crane rate 2018 - 2023
AucklandLytteltonNapierOtagoTaurangaWellington

18
For the year ended 30 June 2023
Total trade down 3.6%
27,218
24,808
25,738
25,615
24,698
5,000
10,000
15,000
20,000
25,000
30,000
FY2019FY2020FY2021FY2022FY2023
000s Tonnes

19
For the year ended 30 June 2023
Container volumes down 5.1%
1,233,177
1,251,741
1,200,831
1,241,061
1,177,350
500,000
700,000
900,000
1,100,000
1,300,000
1,500,000
FY2019FY2020FY2021FY2022FY2023
TEUs

20
For the year ended 30 June 2023
Log exports up 2.6%
7,062,871
5,543,632
6,338,716
6,057,851
6,215,623
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
FY2019FY2020FY2021FY2022FY2023
JAS

21
For the year ended 30 June 2023
Total dairy volume up 2.7%
2,110,169
2,076,153
2,120,239
1,993,751
2,010,252
211,787
285,522
196,325
194,946
237,067
1,500,000
1,600,000
1,700,000
1,800,000
1,900,000
2,000,000
2,100,000
2,200,000
2,300,000
2,400,000
2,500,000
FY2019FY2020FY2021FY2022FY2023
Tonnes
ExportTranships

22
For the year ended 30 June 2023
Total meat volumes up 3.0%
368,292
410,572
413,691
439,175
451,419
288,050
293,040
241,228
156,228
161,617
100,000
250,000
400,000
550,000
700,000
850,000
FY2019FY2020FY2021FY2022FY2023
Tonnes
ExportTranships

23
For the year ended 30 June 2023
Total kiwifruit volume down 20.3%
1,500,100
1,498,091
1,648,915
1,779,173
1,417,861
0
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
1,750,000
2,000,000
FY2019FY2020FY2021FY2022FY2023
Tonnes

24
The return of cruise vessels

25
Ruakura Inland Port
September 2023
Full build-out

26
Terminal automation project
26

30

32

34
Air quality initiatives and improvements
17
3
1
0
0
2
4
6
8
10
12
14
16
18
2019-202020-212021-222022-23
Number of PM
10
exceedances
immediately adjacent to the Port

37
For year ended June 2023
Total greenhouse gas emissions down 7.3%
47,749
40,973
44,223
43,156
40,021
25,000
30,000
35,000
40,000
45,000
50,000
FY2019FY2020FY2021FY2022FY2023
Tonnes of CO2e
Greenhouse Gas Emissions - Total C02e down 7.3%

38
For year ended June 2023
Emissions intensity down 3.8%

39

40
•Total trade down 9.0% to 5.8 million
tonnes.
•Total container volumes down 20.9% to
j
ust over 250,000 TEU.
•Containerised imports down 23%.
•Transhipment containers down 31%.
First quarter performance

41
•Slowing domestic consumer demand
translating to lower import volumes.
•FY24 earnings expected in the range of
$95
million to $107 million.
•Port of Tauranga remains well placed to
w
eather economic challenges.
Outlook 2024

22 September 2023
Keep New Zealand Beautiful Beach Clean Up

Thank you
43

44
Integrated Annual Report 2023

Resolution 1
Re-election of Mr Douglas William Leeder

Resolution 2
Increase in Directors’ Remuneration

Resolution 3
Remuneration of Auditor

Annual Meeting of Shareholders
27 October 2023

50