Port of Tauranga Limited (POT.NZ) Earnings Call Transcript

[Foreign Language] Good afternoon, everyone, and a really warm welcome to you all today to our Annual Shareholders' Meeting. I'm delighted to see so many of you in the room. And I think when we actually set this date last year, we hadn't appreciated, it was on the Labor Day long weekend. So apologies to those of you, if I marked up or we've marked up your weekend. And a warm welcome to those of you online as well. My name is Julia Hoare, and I am very privileged to be Chair of your company. Before we get started and for those online, just bear with me just for a minute, there are some housekeeping notes that I do need to just run through. Firstly, in relation to emergency evacuation, in the unlikely event of an emergency, the fire alarm will sound throughout this theater, so please make your way towards the nearest exits, and they're all clearly marked, and move to the emergency assembly points in the car park. And also please remain outside and wait until you are instructed that it's safe to come back in. As I mentioned, today's meeting is being webcast live for those who are unable to be here in person and part of our commitment to all shareholders is that we make our meetings as accessible as possible regardless of your location. So therefore, we're really pleased to welcome those of you who are participating virtually through our virtual meeting platform provided by our share register, MUFG Corporate Markets, which is formerly known as Link Market Services. And we hope that by holding a hybrid meeting, it will actually create greater support and participation and engagement from you, our shareholders. So welcome to you all, whether you are here in the room or those online. As you'll appreciate, this is a formal meeting and there are certain formalities that we're going to need to work through, so you'll have to bear with me. The company's secretary has confirmed to me that the Notice of this Meeting were sent to shareholders and other persons entitled to receive it on the 11th of September 2024. As a quorum is present, I've got the pleasure of formally declaring the meeting open. Present today are our auditors, Matt Machuca of KPMG. We've got our lawyers, Ken Hawkes of Holland Beckett Law and also our share registry managers, MUFG Corporate Markets, with Brendon Jarvis. So welcome today. And in keeping with best practice, we will be conducting a poll in relation to each of the resolutions listed in the Notice of Meeting. For those of you who are here with us today in Tauranga, you'll be able to cast your vote by filling out the form that you either brought in with you or you received on your way as you came in at the registration desk. And these will be collected after the formal part of the meeting. So we won't do it after each resolution, but at the formal -- when we finish all the formal resolutions, they will come around and collect your votes. For those of you who are participating online through the virtual meeting website, you'll be able to ask questions and vote once you've validated your registration. And to vote, you're going to need to click the Get Voting Card within your online meeting platform. You'll be asked to enter either your shareholder or proxy number and that will validate it. So once you're in there, you need to mark your cards in the way you wish to vote, either by clicking for, against or abstain on your voting card. And once you've made your selection, click the submit vote on the bottom of the card to lodge that vote. If you've got any issues, please refer to the virtual meeting online portal guide or the help line specified if you need some assistance. For those of you here in the room, there will also be an opportunity after our meeting to have some refreshments with us and a chat with fellow directors and also our management team as well. And in addition to that, we're delighted to be continuing our port tours again this year, which will commence at the conclusion of the meeting. So hopefully, a number of you would enjoy being on a port tour. So to kick things off, I'd like to now start by introducing my fellow directors to you. So I'll go in order of the directors. I have Dean Bracewell, Alison Andrew, Fraser Whineray, Sir Robert McLeod, Doug Leeder, Brodie Stevens. And on the very end, and I'll talk a bit more about this in a minute, we're delighted to have appointed a future director to our Board and that is Scott Campbell. And I'd also like to introduce those on the podium with me, Sir Leonard Sampson, our Chief Executive; and Simon Kebbell, our Chief Financial Officer; And we've also got a number of other members of the management team with us today, and I'm going to ask them to stand up as I call their names, so that if you do want to meet up with them afterwards, sorry for you online. But those in the room, if you want to actually corner them afterwards, you'll know who they are. So Blair Hamill, who is our GM Commercial; Dan Kneebone, who's our GM of Property and Infrastructure; Mel Dyer, who's our GM of Corporate Services; Pat Kirk, our GM, Health and Safety; and Rochelle Lockley, our GM, Communications, who's actually down the back there. Thank you. And I just would like to thank you, our shareholders, for your level of participation today and for coming here and joining us because it's always really, really good to be able to talk with our shareholders. My fellow directors and I intend to vote all the discretionary proxies that we've received in favor of the resolutions as set out in the Notice of Meeting, unless specifically disqualified from that resolution. So I'd now like to present the Chair's address to you, which will be followed by the Chief Executive's address. So let me start. I'd like to go over the highlights and challenges over the past year for the Port of Tauranga Group. The past 18 months have been challenging for many New Zealand companies, and I'm pleased to report, as one of the country's more resilient businesses, Port of Tauranga has weathered our storm well. Despite ongoing significant domestic and international supply chain challenges, total cargo volumes decreased just 4.2% for the year to 23.6 million tonnes. We saw a big improvement in the second half of the financial year compared to the first. Container numbers grew 13.7%, and total trade grew 3.3% between the first and second half. While ongoing inflationary pressures, low consumer confidence and increased rail costs put pressure on our import volumes over the year, we saw increases in annual log and kiwi fruit export volumes. Leonard will be going into this in more detail on the performance of the individual cargoes. But overall, I think we ended up in relatively good shape, considering what is happening across the economy, here and overseas. Underlying group profit was $102.7 million, a 12.8% decrease on the previous record year in FY '23. The reported group net profit after-tax of $90.8 million also included a one-off deferred tax expense of $11.9 million due to a change in tax legislation. A strong focus on our costs, so operating expenses, limited to a 3.8% increase to $218.6 million. Our subsidiary and associate companies were severely impacted during the year by reduced cargo volumes. Collectively, their earnings decreased by 29.3% compared with the previous year. The reduced profitability of Northport, PrimePort Timaru, Timaru Container Terminal and Coda Group was offset by strong performances from Quality Marshaling and PortConnect. The Board declared a final dividend of $0.087 per share to bring the total dividend for the 2024 financial year to $0.147 per share. I'm very pleased to report a significant improvement in health and safety, which is really critical and at the heart of what we do. Our total recordable injury frequency rate for employees and contractors improved by 36.2% for the year. As the company's busiest port, we continue to invest in capacity, resilience and efficiency for New Zealand. An intense focus on customer service has seen improved efficiency despite the ongoing challenge of vessels arriving to us off-schedule, which Leonard will talk about shortly. Our team and service partners have done an outstanding job in ensuring Port of Tauranga remains New Zealand's most efficient port. Port productivity is a national issue and is a great concern to importers and exporters seeking efficient access to and from international markets. It's now 1 year since we opened the Ruakura Inland Port in Hamilton, directly connecting the Waikato region by rail to our facilities in both Auckland and in Tauranga. Ruakura Inland Port is a 50-year 50-50 joint venture with Tainui Group Holdings. We've made this investment because inland ports play a crucial role in our vision for a more integrated and efficient North Island supply chain. Ruakura is one development in the more than a decade of investments that we've made to ensure we can facilitate visits from the bigger container ships, ensuring New Zealand remains globally competitive. As part of our big ship strategy, we've been pursuing plans to convert existing cargo storage land into new berths on both sides of the harbor, developments we collectively know as the Stella Passage project. As you will all be aware, for several years, we've been trying to obtain a resource consent for this development, which has been included in the regional coastal environmental plan for decades. An environment court hearing an application was held almost 20 months ago. And in December last year, the court issued an interim decision, granting resource consent for the most urgent part of the project, a 285-meter extension at the container terminal. However, this decision was subject to further matters being addressed to the satisfaction of the court, including provision of further environmental evidence and engagement with iwi and hap?. Our progress was reported back to the court at the end of June and also at the end of September. The berth project is critical to New Zealand's economy. Without it, importers and exporters will face capacity constraints in the next few years. We have weekly services currently waiting for berthing windows at our port, which we can't provide them. The project will also help build New Zealand's resilience especially in the face of increasing climate-related impacts. We cannot meet our trade needs or decarbonization aspirations as a nation without investment in good infrastructure. To that end, Port of Tauranga has successfully applied the entirety of the Stella Passage project to be included in the government's fast-track consenting legislation. We look forward to seeing the detail of the process and the time frames of this fast track option. While we are constructing a new berth at the container terminal, we also plan to introduce electric automated stacking cranes adjacent to the storage areas. The automation is designed to both increase our capacity and accelerate our decarbonization within our actual current footprint. We are very strongly focused on decarbonization as part of our commitment to long-term sustainability. And in the past few years, we've made significant progress in improving fuel efficiency and reducing waste. We're also very committed to preserving our social license with the Tauranga community through continuous improvement in our environmental performance and also the support of community services. And Leonard will expand on these in his presentation. Now a little bit more around governance. We've welcomed 2 new directors to the Board since you were here last year, although one is actually a familiar face. Sir Rob McLeod has rejoined the Board after retiring last October as 1 of the 2 directors we previously had on our Board appointed by Quayside Holdings, our cornerstone shareholder. He returns as an Independent Director and is now chairing our Audit Committee, and he brings with him deep governance experience, outstanding financial skills and extensive iwi connections. And we're very fortunate to have a director of his caliber back. And as directors, whilst we could have looked to someone else as a vacancy became apparent, we had seen his performance and his work for Port of Tauranga historically and felt that he would add huge value. Some may question independence, but we took actual advice around Sir Rob's independent status and took legal advice, and we're very, very comfortable as directors that he can stand and be part of our Board composition as an independent. Sir Rob has replaced Alastair Lawrence, who retired in August after 9 years of service as a director, almost 10 actually, and 2 years as Chair of the Audit Committee. Alastair was a really astute Director and Committee Chair, and he had a wealth of commercial knowledge, and he retired with our gratitude and thanks. He gave a great contribution to you, our shareholders, and our Board. Now joining us today for his first annual meeting is Fraser Whineray, who replaced Sir Rob as one of Quayside's 2 nominated directors, and he holds governance roles with Waste Management in AgriZero. In addition to his Quayside role, and he's also Executive Chair of Jarden Group. Most of you probably also know that Fraser was previously CEO of Mercury and COO of Fonterra, so brings some fabulous experience to sit around our table. And also up for reelection today is Alison Andrew, who joined the Board in 2018. And Alison has also been an amazing contributor and she's held a number of senior executive roles, most recently as Chief Executive of Transpower New Zealand. And I'm also standing for reelection today. Finally, I'd also like to welcome our new Future Director, Scott Campbell, who is attending his first meeting today, he had his first Board meeting this morning. The Future Director Program is a program that has initiated or run initially by the Institute of Directors, and it's aimed at trying to develop the next generation of directors so that as people like us retire off, we've got a really good, well equipped and capable group of new and younger directors coming through the system. And Port of Tauranga made the decision that we were very keen to participate in the program because for us, it's very important that we also do our part to grow that director pool. But one of our absolute nonnegotiables was it had to be someone from our region so that actually, we are growing our pool in our region. So we're delighted, Scott, that you're joining us for the next 12 months as our very first Future Director. So I'd now like to welcome Leonard to share an update of the company's trade and operational performance over the past year as well as some of the insights, Leonard, from the first quarter of the 2025 financial year.

Thank you, Julia. [Foreign Language]. As Julia described, the second half of the year saw a marked turnaround with cargo volumes bouncing back despite the economic downturn reducing demand for imports, along with challenging export commodity prices. Despite these fluctuations in cargo volumes and the fact that only around 30% of container vessels are currently arriving on schedule, our continuous focus on operational performance has seen significant positive improvements in service delivery for our customers. Productivity for the year improved with container moves per hour per crane increasing by 7.9% to just over 30 moves per hour. This compares with the national average of 25 and the average of the top 5 Australian ports at 24 moves per hour. Our team has done an outstanding job in improving productivity without any compromise to safety. Our total recordable injury frequency rate for employees and contractors significantly dropped 36% to 13.2 per million hours worked. Pleasingly also, our lead indicators improved, with safety observations up 9.3% and near-hit reporting up 7.1%. This reflects an increased focus on proactive risk management at all levels across the organization. We have introduced a new safety recognition program where our people can nominate their colleagues for the Team Safe Award. This award recognize the behaviors that demonstrate our value of having a safety-always mindset. As New Zealand's largest port, we continue to take a leadership role in health and safety across the industry. Our General Manager for Health and Safety, Pat Kirk, is the Chair of the Port Industry Association and also participates in the port sector health and safety leadership group. Looking now at some of the detailed cargo trends over the past year. Imports were most affected with the economic downturn, with lower domestic consumption reducing imports 13.4% to 7.8 million tonnes. Exports overall remained steady, increasing 0.9% to 15.8 million tonnes. Container volumes for the year decreased 2.5% to 1.15 million TEU. With regard to our export commodities, log exports increased 7.5% and volume to reach the second highest year on record at 6.7 million tonnes. This was due to around 1 million tonnes related to Cyclone Gabrielle, with forests in the Central North Island damaged in the severe weather event and exported earlier than planned. Direct dairy exports decreased 3.4% in volume with softer production in the North Island and challenging commodity prices. This also affected dairy sector inputs, with both fertilizer and stock feed imports decreasing 16.7% and 17.2%, respectively. Throughout the year, there were several ship changes to coastal shipping services, which resulted in volume decreasing transshipment volume, decreasing 12.1%. Kiwi fruit, however, bounced back following a challenging 2023 season, with volumes for the financial year, which spans part of 2 growing seasons, increasing 8.5% in volume for the 12 months to June. Our total ship visits for the year were 1,427, 5 fewer than the previous year. 109 of those ship visits were cruise vessels over the summer season, which is close to our record of 116 visits during the -- prior to the COVID pandemic. The first cruise ship of the current season arrived on October 18 and we're expecting around 90 cruise ships this season. And we will welcome a number of first-time callers, including the Disney one calling in December of this year. We remain New Zealand's largest port, handling 32% of New Zealand's total imports and exports, both by volume and value. Importantly, however, as an export trading nation, we facilitate just under half of all New Zealand's export trade by value at 47%. A year on from the official opening, we are pleased with the progress of the Ruakura Inland Port, our joint venture in Hamilton with Tainui Group Holdings. Trains running -- trains run daily between Port of Tauranga and our Inland Port Metro Port in Auckland and call at Ruakura Inland Port on a daily basis. Earthworks are underway on Stage 2, creating an empty container depot adjacent to the inland port facility and there's exciting development and growth of the inland port, which is on track to handle somewhere between 25,000 to 30,000 TEU this year. Back here in Tauranga, as Julia has described, we are currently assessing the newly announced fast-track legislation as an option to speed up the Stella Passage consenting progress. This the Stella Passage port development is both regionally and nationally significant. It is important, particularly at the Sulphur Point container terminal as we reach the current limits of our existing berth capacity. While we wait for the necessary consents, we are continuing to pursue plans to introduce a level of automation into the container terminal following the berth extension. Despite this project being delayed, we have developed the necessary electrical infrastructure and are close to selecting a vendor for this project. Our automation will involve fully electric rail-mounted gantry cranes that will work together with hybrid or electric straddles between the container yard and shipside. Similar automation models have been used for over a decade in some of the world's most productive container terminals. We have recently taken delivery of a new container crane which, weather permitting, will be assembled and operational by the end of the year. Last year, we dismantled the oldest crane in the fleet and we are currently in the process of dismantling its sister crane as both have reached the end of their working life. As part of the ongoing -- we've taken a range of initiatives to reduce airborne dust, resulting in a dramatic improvement in air quality since intense monitoring began in 2019. Vacuum sweeper trucks operate 24/7 with bark from export logs recycled into garden products. Concrete barriers keep traffic on frequently swift roadways and we continue to expand our wind fencing network, which encourages dust to settle where it can then be swept up. We also enforced strict wind limits for handling dusty cargoes on our bulk wharves. All of this has seen a 25% reduction in fine dust measured at the T?tara Street and Waimarie Street intersections between 2017 and 2023. We also have an extensive program monitoring water quality, which regularly test for suspended solids, heavy metal toxins and other contaminants. Whilst the results are currently well within the compliance of our resource consent limits, we are not content to just comply. And in this regard, we will install our first aboveground storm water treatment system on the Mt Maunganui wharves in the oldest part of the port. We have just published our first climate-related disclosures report under the new mandatory reporting regime for listed companies. The report reviews our risk management systems, discusses the specific climate-related risks and opportunities and outlines our current greenhouse gas emissions. Our total Scope 1 and 2 emissions, which are those which we directly control, reduced 3.9% over the year. And when we take into account Scope 3 emissions, which are those we do not directly control, from our chartered metro port trains and waste to landfill, we achieved a 13.5% decrease. Whilst total emissions reduction will remain a priority, we will also focus on emissions' intensity or greenhouse gas emissions per tonne of cargo. We will be doing a significant amount of work this year to further develop our metrics, targets and better defined Scope 3 boundaries which we will continue to report on into the future. Our pursuit of the big ship strategy has a positive impact on the national emissions profile for New Zealand with larger, more fuel-efficient vessels producing significantly fewer greenhouse gas emissions per container. Over the past year, we are pleased to announce some new community partnerships. The largest 2 of which are the sponsorship of the Mt Maunganui lifeguard service, as well as funding towards the living seawall that has been built on the strand with the aim to attract more submarine life. We have also funded the natural playground on the Marine Parade Coastal Pathway along with a new viewing platform on the north side of the Mauao walking track. Now looking ahead to the year ahead. The current economic conditions and operating environment are both complex and challenging, but our scale and diversity continues to hold us in good stead. We continue to see the impacts of softer commodity prices, as well as escalating geopolitical instability, trade tensions and ongoing conflict in the Red Sea. And the Upper North Island over the next 2 decades represent a significant opportunity for growth in imported cargoes. To support this growth in population, we must have all 3 ports in the Upper North Island, Tauranga, Northport and Auckland operating at maximum efficiency, supported by a network of rail enabled inland ports and creating a resilient Upper North Island supply chain. Now let's turn to the first quarter's results and the outlook for 2025. Total trade volumes for the quarter were 6.2 million tonnes, up 7.6% on the same period last year. Total container volumes were 293,000 TEU, up 16% on the same quarter last year based on the first quarter's results, and notwithstanding any significant changes to trading conditions, we expect the full year underlying earnings to be in the range of $110 million to $120 million. We remain confident in our ability to deliver sustainable financial returns over the long term due to our people, operational resilience and diversity of both cargoes and income streams. And now it just remains for me to thank our team, our customers, business partners, service providers, along with our community for their ongoing support. Finally, also, thank you to you, our shareholders, for your continued trust and support in our business. Together, we are connecting New Zealand and the world. [Foreign Language]. Thank you.

Thanks very much, Leonard. I'd now like to discuss our integrated report. And the 2024 integrated annual report containing the financial statements and the auditor's report for the year ended 30 June 2024 has been sent to those who have requested a hard copy. Some of you, I think, today, have been able to pick one up as you come in the door as well. And it's also available on our website. And we'll be happy to take any comments or questions that you may have in relation to the report during the general discussion that we have after the resolutions and the rest of the formal business has been dealt with. So I now propose that we receive the integrated annual report of the company for the year ended 30 June 2024, including the audit report and the financial statements. So ladies and gentlemen, we now come to the formal part of our business matters which require resolution. And these have been outlined in our Notice of Meeting. Moving to the resolutions. As I mentioned earlier, I propose to call a poll for each of these resolutions. Many shareholders have already voted by proxy, and the results of the polls will be announced by the stock exchange after the meeting and also available on our website. Director Alison Andrew and myself will both be retiring by rotation at this meeting and, being eligible, offer ourselves for reelection. Director Fraser Whineray was appointed to the Board on the 31st of October 2023, and Sir Robert McLeod on the 1st of July 2024, both as directors of the company pursuant to Clause 26 of the constitution, and they now offer themselves for election. As mentioned previously, Sir Robert was formerly a member of the Board, having initially been appointed on the 31st of October 2017 as a representative of Quayside Holdings, and he retired from the Board last year on the 31st of October 2023, having stepped down from his role at Quayside. He now rejoins the Board and is considered and confirmed by the Board as an Independent Director as defined in the NZX Listing Rules. Biographical details for all directors are contained on Pages 56 and 57 of our annual report and also, again, available on our website. So we will deal with the reelection and election of the 4 directors separately. Just a reminder, for those of you in the room, your votes on all resolutions will be collected at the end of the formal part of this meeting. And as I'm up for reelection, I'm going to hand over to one of my fellow directors, Dean Bracewell, to chair this part of the meeting. So thanks, Dean.

[Foreign Language] Firstly, we'll deal with the reelection of Julia Hoare. The Board recommends Julia to you as a Port of Tauranga Director and unanimously supports her reelection. I invite Julia to address the meeting on her proposed reappointment.

Thanks, Dean. Look, I would like to thank you all for your ongoing support. I think there's a spider hanging off here. That's interesting. I'm glad I'm not scared of spiders. Ongoing support of both Port of Tauranga and myself over my time on the Board. It's been an absolute privilege to serve you as both a Director, and more recently, as Chair of your company. For those of you who don't know me, my earlier career was in professional services, and I was a partner with PwC for 20 years. My governance career has spanned the last 12 years, and I currently serve, not only on our Board here, but also the Boards of Auckland Airport, where I took over as Chair last week and also Meridian Energy. I'm also a Director of 2 of our Port of Tauranga investments, being Northport and PrimePort in Timaru. As I reflect on my time with the Port of Tauranga Board, I'm reminded of the incredible resilience and adaptability that we've demonstrated in navigating the challenges that we've had over the recent years. We've weathered the storm of the global pandemic, supply chain disruption and adapting to new realities in trade. Throughout, we've continued to be New Zealand's most productive port despite the constraints that we faced around our actual capacity development. We've repositioned ourselves and we really embrace a future filled with new opportunities. I'm really proud to have been part of such a strong group of governors and management who have guided the port through these challenging times while always maintaining our long-term vision for sustainable growth, authentic community engagement and operational excellence, and that is at the heart of our decision-making. In seeking reelection, I bring an understanding of the complexities and opportunities we have ahead as well as a commitment to continued collaboration with all of our partners, employees and all stakeholders. I also bring a passion for Port of Tauranga. I want to ensure that we will be an icon for New Zealand. We'll be physically, economically, socially, culturally that icon. We're not only New Zealand's largest port, but we're the best port in our country's premier export gateway. Look, I welcome your support to continue as a Director and also as Chair of Port of Tauranga as we move into our next phase of development and growth and innovation. So again, I thank you all very, very much for your support, and I look forward to continuing this journey with you. So thank you very much.

I now propose that Ms. Julia Hoare be reelected as a Director of Port of Tauranga Limited. Are there matters for discussion or questions from shareholders concerning the resolution relating to Julia's reelection?

We've got a microphone coming to you.

Yes. My name's [ Beryl Plummer ]. I'm the representative of the Shareholders' Association and we've got a mic. It's not -- we are now. [ Beryl Plummer ] I'm the representative of the Shareholders' Association, holding their proxies and also a shareholder in my own right. Julia, you now chair 2 very, very large corporations and do a fantastic job. And perhaps it's a walk in the park after COVID. But -- and are you also a Chair -- on the Board of Comvita?

No.

No, which is on the report, but you're not any longer. Is the workload -- obviously, you think you can deal with the workload. As long as we don't have another COVID?

Look, thanks for that question. And look, it's a really good question. I'm very, very comfortable with the level of workload. And I think it's a case of horses for courses with directors as to whether they view themselves as a full-time capacity across their portfolios or just want to do it as a part-time possibly later in life piece. But certainly, having had 20 years as a partner at PwC, this is a lot less of a workload than I'm historically used to. Look, I feel very, very comfortable with the workload, and I don't ever feel that I've been in that situation that I haven't been able to manage. And I think it's really important for directors, and we're all different as to how much we want to do, so it's very important to think about your own workloads and making sure that you've got capacity when, the -- what I'd call, interesting things suddenly pop up along the way that you've got capacity to deal with them, and I'm really comfortable that I do. But thank you for your question.

Okay. Thank you. There are no further questions from shareholders. For those online, please submit your vote by marking for, against or abstain in the appropriate place on your online voting card. Shareholders participating through the virtual meeting should now submit their votes. For those in person here, your voting papers will be collected at the end of the meeting resolutions. Thank you.

Thanks very much, Dean. Now I'd like to move to our second resolution, which is the reelection of Ms. Alison Moira Andrew. The Board recommends Alison Andrew to you as a Port of Tauranga Director and unanimously supports her reelection. So I'd like to invite Alison to address the meeting and her proposed reappointment. And Alison, don't get a shock when the spider shoots around.

Thank you, Julia. [Foreign Language] I'm Alison Andrew, and I've served as a Director of the Port of Tauranga for the last 6 years, and I'm seeking your support for reelection today. It's a really exciting time for the port, and we've got several interesting growth opportunities in front of us, including the proposed wharf expansion. However, the path ahead is not easy, and it's going to require careful navigation. I believe we have the Board and the management team and capability to execute on our plans. And I'm keen to continue to be part of realizing this future. I stepped down as the Chief Executive of Transpower at the end of June this year, 3 months ago, after over 10 years leading that essential infrastructure business. I have ample time and capacity that I can apply to port governance as required. I bring a broad corporate background across several manufacturing and capital-intensive businesses. So prior to my time as Chief Executive of Transpower, I was Global Head of Chemicals for Orica PLC. And I spent time in senior management and operating in staff roles in Fonterra Cooperative Group and across the Fletcher Challenge Group of Companies, Energy, Forestry and Paper. I have an engineering and business education background. With your support, I look forward to continuing to work with the talented Board and management to continue to deliver value for our shareholders from this excellent business. Thank you.

Don't go too far, Alison, in case there's any questions, but I'd now like to propose that Ms. Alison Andrew be reelected as a Director of Port of Tauranga Limited. So are there any matters for discussion or questions concerning the resolution relating to Alison's reelection? No, that's great, and there are none submitted online either. So as there are no questions from shareholders. Thank you, and thank you, Alison. Again, for those of you online, could you please submit your vote by marking for, against or abstain in the appropriate place on your online voting cards and you should now submit your votes. Okay. Hopefully, that's time for you to do that. So thirdly, we'll deal with the election of Mr. Fraser Scott Whineray. The Board recommends that Fraser Whineray to you as a Port of Tauranga Director and where you unanimously support his reelection. So I'd like to invite Fraser to address this meeting on the proposed appointment.

Thank you, Chair. [Foreign Language]. I'm very pleased to be here at this AGM and also very pleased to be a director on the Port of Tauranga. Like, you, who are shareholders or shareholders representatives, as I am a shareholders' representative being one of the Quayside nominees to the Port of Tauranga Board, owing to the 54% ownership position and also acknowledge Lyndon Settle, the Chief Executive of Quayside; and David Fear, who's a Director of Quayside, a colleague who are here today. These are very important processes to engage with shareholders. Just on Wednesday, Quayside did the same thing with their shareholders because it's always important on a periodic basis to look shareholders in the eye and know who we, as a Board and executive, are working for. My experience, which Julia has outlined earlier in the introductions, covers a few things, in particular, relevant to the port infrastructure, export logistics, transactions and significant projects. I was on the Board, when I was Chief Operating Officer of Fonterra, on the Board of Kotahi, which involves partnerships, indeed, with the Port of Tauranga, and Fonterra itself is responsible for a huge amount of export cargo, Kotahi handling 1/3 of New Zealand's export containers itself. My focus in business is on running a very tidy shop, including safety and the environment, a very clear strategy from robust debate, which Julia certainly entertains, and we enjoy around the Board table and then supporting management and excellent execution, and they were introduced earlier. They are a very good team, and we're very pleased to have their competence and enthusiasm and dedication. So I'm very grateful for your consideration of my reappointment, and thank you very much. Happy to take questions.

Thanks, Fraser. So I now propose that Mr. Fraser Whineray be elected as a Director of Port of Tauranga Limited. So are there any matters for discussion or questions concerning Fraser's election? No, and none online. Thank you, Fraser. So again, look, thank you very much. And for those of you online, can you please submit your vote, at this point, by marking for, against or abstain in the appropriate place on your voting cards, and I'll give you just a minute or so to do that. Thank you. Fourthly, we'll deal with the election of Sir Robert Arnold McLeod. The Board recommends Sir Robert to you as a Port of Tauranga Director and unanimously supports his election. So I'd like to now invite Sir Robert to address the meeting on his proposed appointment.

[Foreign Language] As the Chair mentioned, I am -- I was originally a Director of the Port of Tauranga for the period from October 2017 to October 2023. And I was appointed to that position by virtue of being the Chairman of Quayside Holdings Limited, which as you've heard, a 54% shareholder in the Port of Tauranga. I resigned from that position in October of 2023, that's from Quayside, after having served 7 years with that company. And as a result of that, since my appointment on to the Port of Tauranga was conditional effectively on my position at Quayside Holdings Limited, I came off the Board of the Port of Tauranga. That's after a 6-year duration. My reappointment to the Board of the Port of Tauranga took effect on the 1st of July 2024, at which point, the Board evaluated me as being independent because by virtue of being Quayside Director, I was not independent, and that was a very relevant criteria. And also, of course, I came in back into the Board on invitation through the standard appointment route as opposed to being appointed there by virtue of being a shareholder representative. The basis of my reappointment, I think I would summarize the key points of it anyway, are first: My independent status; secondly, the 6-year experience that I've had in the company; thirdly, the skills, particularly in accounting and finance, which were a need on the Board, particularly with the impending retirement of Alastair Lawrence and his vacation of the Chair of the Audit Committee; also extensive governance skills and also my executive management skills. I think they, essentially, underpin the invitation to be -- to return to the Board, which I was delighted to do. Just perhaps in terms of an elaboration on my skills and why I consider myself useful to the Board. I was a former Chief Executive of Ernst & Young Australia and Ernst & Young New Zealand. Prior to retiring from the accounting profession after many decades of involvement there, and my primary skill and focus in those times was on taxation, but also on executive management of those kinds of firm. I've also been, through the years, a director of many public companies, companies such as telecom, Sky City Entertainment and others, I currently also serve as Chairman of Sanford Limited, a public company. And I have also directorships in the private realm with family offices that continue today. One of those is actually Chairman of the Ngati Porou commercial company, Ngati Porou, being the second largest iwi in the country. I am Ngati Porou myself. And I think that iwi connection is another basis for why the Port of Tauranga was interested in my skills. I've been delighted to have been a past Director of the company, and I would be delighted -- I have been delighted to rejoin it and certainly to continue on the role. The company is a fantastic company and I think it's one of the blue-chip companies to be a director of. I think it has an exciting future, and I think that my skills can contribute to that future. So I hope that I can have the shareholder support for the renewal of my appointment there as a director. [Foreign Language]

Thanks, Sir Rob. I'd now like to propose that Sir Robert McLeod be elected as a Director of Port of Tauranga Limited. Are there any matters for discussion or questions concerning Sir Robert's election?

If Quayside intends -- or no longer intends to, as a right, appoint 2 directors to the Port of Tauranga, particularly in view of the also advertised intention to drop 50% of the shares they have? Thank you.

Do you want me to answer that, Rob? Or do you want to -- I'd note just -- I think that, really, at this stage, certainly Quayside have indicated that they may obviously divest of some shareholding in the port, but that hasn't occurred at this point. So we have spaces for 2 non-independent directors on our Board, which can be appointed through the Quayside process, and we have our 2 who are exceedingly good. Obviously, Fraser, who you've heard from today; and Doug, further down the line there. So look, at some point in the future, should they end up being a sell-down of some sort and that's not definite, obviously, from the Port of Tauranga side, we will look at the level of representation on the Board. But as that's not a an issue right now, it's certainly not something that we're needing to turn our mind to. Any other questions? No? Thank you, Sir Rob.

Okay. Again, for those of you online, could you please submit your votes marking for, against or abstain in the appropriate place on your online voting card. And those of you online, if you could submit those votes now, and I'll give you a little bit of time just to do that. Hopefully, that's sorted. So our fifth resolution is -- relates to the remuneration of our auditor. For those of you that don't appreciate, we -- our auditor is the Auditor-General. And actually, in a number of shareholding meetings, there's been questions about entities and auditor rotation. But unlike companies that aren't under the Auditor-General's space, our auditor is our auditor via statute. So the Auditor-General is our auditor pursuant to Section 19 of the Port Companies Act and is automatically reappointed as auditor for the year ended 30 June 2025. How the Auditor-General actually conducts those audits is that they will appoint often a firm to conduct that audit on their behalf and that firm will do the audit in terms of the Auditor-General's guidance as well. And for us, our auditor in that respect is KPMG. And KPMG will undertake the audit on behalf of the Auditor-General as we go ahead in 2025. So this resolution concerns the fixing of the auditor's remuneration and also seek shareholder approval that the directors be authorized to fix the auditor's remuneration. Port of Tauranga's statutory audit fees for the financial year ended 30 June 2024 were $393,000, including disbursements. So I'm now proposing that directors are authorized to fix the remuneration of the auditor. So are there any matters or questions around this resolution? I can't see any, and there's none online. So again, for those of you that are online, if you could please submit your vote by marking for, against or abstain on the appropriate place on your online voting card and if you could press submit on that. So now our share registrar, MUFG Corporate Markets, is going to come through the room and collect the voting cards from those of you who are in the room today. And for those online, while they're doing that, if you could just make sure that you have submitted all of your votes. Voting will remain open until 5 minutes after the conclusion of the meeting for those of you online today. As I mentioned earlier, the results are going to be announced to the NZX by the end of the day after the conclusion of this meeting and will also be on our website. I'll just give a moment or 2 for the voting pieces to be... [Voting]

Okay. I'm going to now move into the area of general business, and this is the opportunity for you to ask any questions that you may have, and we really welcome this interaction with our shareholders. So do feel free to ask any questions. How I'm going to go about it is I'm going to -- there's been a couple of questions that have been submitted in advance, so I will deal with those first. And then I'm just going to alternate between those of you in the room and those online and just sort of juggle it in that sort of way. So that's how I propose to do it. For those in the room, please do not start to ask your question until you've got a microphone in front of you. And although people in the room might be able to hear you, those online can't. So if you could just wait until you've actually got the mic, and then you can ask your question, that would be great. So let me just get into this. The other thing, too, is when you stand up -- for those in the room, when you stand up, if you could please give your name, because I'd like all names to be recorded for our minutes. And similarly, for those of you online, I'll only be asking questions of those who are submitting their name with their questions. So please, could you just make sure you include your name.

So the first question I have is from [ Jason Mark Thompson ]. But he says, "Not a direct question, but it was great to be able to participate in a port tour while I was visiting Tauranga earlier this year. Looking forward to when PrimePort Timaru has an open day." So look, thank you, Jason. I'm glad you got the opportunity to visit PrimePort. I do sit on Timaru, and so I will follow up with them as to what they plan to do in terms of tours. But for those that are interested in Port of Tauranga tours, we hold public tours in the 2 weeks of January and during the school holidays in July. So anyone that doesn't get a tour today and wants one, there's an opportunity there. The next question is from [ Kevin Barry Taylor ]. And his question is, "Have we considered a dividend reinvestment plan?" Yes, we have we're constantly looking at capital management for the port. And it's really important to us that we preserve cash and strengthen our balance sheet. But we do have a large capital investment program ahead of us as well in the near future. But we've got a very strong balance sheet, and we believe that we are able to undertake these investments using debt and cash flow. So at this stage, whilst we might talk about things like a dividend reinvestment plan, we have no intention, we're not considering having one. So they're the 2 online. Are there any questions? I'll start with on the floor. Has anyone got a question from the floor? There's 1 -- there's 2 there. So if we come here first and then to here, and then I'll jump online.

Phil Simon, shareholder. I'd just like a bit of expansion on why this -- the resource consents bogged down. Is there a -- I cannot understand why this is dragging on so, so long. That's one question. The other one is the depreciation through the tax changes seem quite significant. I presume that's to do with the amount of buildings we -- the port holds. Could you just expand on that?

Sure. Let me -- I'll answer the first one, and then I'll pass to Simon for the second one. In relation to the resource consents, you'll appreciate there's a lot of discussion at the moment in New Zealand in relation to resource consents and the shape of the RMA. And I think, sadly, the RMA is broken at the moment. And it's not just us, there's a lot of businesses that have had a lot of time trying to get resource consents and there are issues that are holding them up. So we've been pursuing it for quite some time. As I mentioned, we did our -- we had our court hearing 20 months ago. We've got an interim decision. We're still working through our court directions to try and secure that. So it is unfortunate. We're not alone. I don't think there's anything actually specific for Port of Tauranga. It's just where the legislation has got to. And I'm looking forward to seeing what the new legislation will look like. And hopefully, whilst I'm not trying to get around anything that might be adverse from an environmental perspective or issues that are serious, I think they do need to be dealt with. I just think that the resource consent process has had its issues. So we are hopeful, and we have been included on the fast track for the Stella Passage project. That gives us options. We are still going through the formal RMA process. We've done responding to court direction. So we're not out of that process, but we have some optionality in relation to the new one. And Simon, would you like to comment on the tax adjustment.

Sure. Thank you, Chair. Yes, last year, we had a deferred tax adjustment of $11.9 million, and that related to the government basically removing depreciation on commercial buildings. So that $11.9 million is across the group. So it's not just Port of Tauranga. That also included adjustments made at both PrimePort and Northport. Port of Tauranga has $137 million worth of buildings. And our buildings are not held for sale. They have operational purposes, and it just reflects the nature of the assets that we hold. I'd just like to also point out, it's an accounting transaction. It's not a cash transaction. It's just something we had to do for accounting purposes.

Sorry, we had a second one down here, and then I'll jump online.

Yes, [ Beryl Plummer ], Shareholders' Association again. Firstly, a bouquet for you. I'm really impressed when I come to a meeting like this, and I come to a lot of meetings at the start of the year. Your attitude and engagement with climate and environmental measures -- I go to a lot of AGMs and the Board just, oh, it was such a pain. And it's so nice to come to one where you really take what's been laid on you in some cases, but also try to excel. So very impressed with that. And the second is just a little question. On, I think, Page 32, you report on the percentage of women in different -- in your workforce cut 3 different ways. You talked not at all about remuneration. Have you got any statistics on comparative remuneration for women.