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ANNUAL REPORT

2018

CentrePort Annual Report 2018 2

CENTREPORT. THE PORT OF CHOICE FOR CENTRAL NEW ZEALAND. CentrePort is a key strategic asset for central New Zealand. Facilitating economic growth in regions in the North and South Islands through safe and efficient movement of cargo. Providing supply chain solutions and expertise. Playing a key role in the New Zealand Lifelines Network.

• Contributes $2.5bn to GDP1

• Supports 21,000 jobs in central New Zealand2

• Facilitates $20bn of freight3

• Enables $3.3bn of exports and imports with international markets

1. Economic Impact of CentrePort on Central New Zealand – May 2016 - BERL2. Economic Impact of CentrePort on Central New Zealand – May 2016 - BERL3. Economic Impact of CentrePort on Central New Zealand – May 2016 - BERL 4. JAS – Japanese Agricultural Standard – the global industry standard measurement of log volume. 1 JAS is approximately 1 tonne 5. Cruise New Zealand

2018 Highlights• Revenue up 16 percent to $73.8m

• Underlying profit up 37 percent to $11.8m

• Ship-to-shore cranes operational

• Health & Safety: lost time through injury halved

• Record: log volumes up 23 percent to 1.3m JAS4

• Record: vehicle volumes – 28K

• Record: First time back-to-back 1m tonnes petroleum

• Container volumes rebounded by 64 percent

• 238,000 cruise passengers and crew boosted economy by $59m5


Strategic PrioritiesOur strategic priorities are designed to build resilience into the business, and continue growth to enable CentrePort to reach its

full potential as a world-class, freight-handling operation and regional asset for the central New Zealand economy.

1. Build resilience and regenerate the port to create a long-term sustainable business.

2. Grow freight capacity.

3. Review our property portfolio and assets to align with port needs.

Chairman’s ReportCentrePort achieved a strong financial result with a 37 percent increase in underlying profit, and trade volumes rebounding.

Chief Executive’s ReportA busy year in which significant progress was made in remediation and resilience works, while the business continued to

grow. Big strides in health and safety performance were achieved. Exciting and ambitious future strategies were developed/

commenced.


OUR YEAR

Big Focus – The Inland Strategy Boosting Regional New ZealandInto its fifth year, CentrePort’s inland strategy continued to benefit the business and help drive economic prosperity in the regions.

Since 2013, CentrePort and KiwiRail have provided a CentreRail service for container shippers through facilities in Taranaki,

Whanganui, Palmerston North, the Wairarapa, and Marlborough. What began as a rail network solution is evolving into a logistics

supply chain with various services wrapped around the CentreRail service.

This provides a cost-effective, reliable connection and logistics service between central New Zealand importers and exporters

and global markets. The past year saw record CentreRail volumes, with more shippers coming on board and the continued

development of the hub network.

There was further development of the Waingawa hub near Masterton, which helped manage the ongoing heavy demand to move

logs. Waingawa provides storage, weighing, and scaling services with loading onto the rail link to the Port. Further prospective

log hub sites in the Wairarapa are being considered for future development.

Development of the Smart Road facility in New Plymouth continued. This is a dedicated container transfer site with heavy lifting

equipment that makes it easy for shippers to connect efficiently with rail across Taranaki. To further enhance the growth of the

facility, CentrePort is working with potential strategic partners to boost logistics capacity and capability.

The Whanganui hub continued to be highly successful, supported by the partnership with Ali Arc Logistics. The purchase of a rail-

fed site in Palmerston North will enhance services to that location. Strong growth in demand from Marlborough, largely from the

wine industry, will help drive hub development in that region.

ANZCO FOODS: BOOSTING THE REGIONAL ECONOMY

ANZCO Foods is a meat processing company, contributing approximately $100 million to Taranaki and

Manawatu-Whanganui.

The company operates two processing plants in Manawatu-Whanganui, providing much-needed jobs

and income to the region.

ANZCO has had a long-standing relationship with CentrePort and moves all of its containerised export

product through the Port.

ANZCO exports to over 100 countries, and relies on CentrePort’s daily rail service to send its products

across the world.

“Looking to the future, the Port will be focused on ensuring the shipping lines keep calling at Wellington. Improvements to Port facilities will be a key factor for us too.” Grant Bunting of ANZCO Foods


“We want to work with a port that is flexible and versatile. It’s important that our partners keep pace with our speed of change.” Brendon Bartley of Ali Arc

Big Focus – ResilienceCentrePort made significant progress in improving the resilience of the company. While there is much still to do, a major

programme of works achieved several milestones during the year. Applying the lessons from the 2016 Kaikoura earthquake,

CentrePort is building enduring assets and putting systems and strategies in place so it is in a strong position to handle

geological, environmental, and commercial challenges of the future.

The resumption of service of the two 750-tonne ship-to-shore cranes in September 2017 was the result of a massive collaborative

effort. A $28m temporary works programme commenced in the previous year presented complex engineering and construction

challenges. HEB Construction was rewarded for its work, winning the Construction Excellence Award at the Civil Contractors New

Zealand Awards. Holmes Consulting, Opus NZ, Tonkin+Taylor, Aurecon, NorthPower, Rich Rigging, Liehberr, and Downer all played

important roles in getting the cranes up and running.

The project secured 125 metres of the 585-metre Thorndon Container Wharf and included temporary paving works. A total of

185 piles, made up of more than 1000 tonnes of steel, were driven an average of 40 metres into the soil. Additionally, 644 gravel

columns were embedded in the ground to reduce any liquefaction from future quakes and provide resilience to temporary works.

Ten buildings were demolished or partially demolished along with a portion of Thorndon Container Wharf. The demolished

structures included the former Statistics House, the Port Coldstore and part of Shed 51 — the former cruise terminal.

The demolition programme creates opportunities to implement resilience. Demolition of old storage sheds on the E-site (the 0.8h

space between CustomHouse and the former BNZ Building) has paved the way for development of a marshalling area for the

Strait NZ Bluebridge ferry operation. After the Kaikoura quake marshalling had to be moved from the damaged Kings Wharf and

temporarily relocated to the Glasgow and Interislander Wharves. The partial removal of Shed 51 will allow a second log berth.

Other resilience work included investment in the Seaview Wharf fuel facility, resulting in improved operability.

ALI ARC: CONNECTING OUR REGIONS

Ali Arc Logistics works in partnership with CentrePort to connect Whanganui to the world. The long-

standing relationship has enabled Ali Arc to offer customers a set price and certainty around the timing

of freight.

CentreRail’s reliability, efficiency, and flexibility are all key drivers for why the partnership works so well.

“It provides a streamlined rail network, making our supply chain more efficient,” said Ali Arc General

Manager Brendon Bartley.

“Before using CentreRail we had to coordinate 20 to 30 trucks a day, or a train which diverted through

Palmerston North. There were always delays. Now we have one train and we know when it arrives and

when it leaves.”

More than 20 Whanganui businesses use Ali Arc and CentreRail to send their products to the world.


Thousands of tonnes of asphalt were laid as part of repair and remediation work. Major running roads for large container-moving

equipment were replaced while work began on improving areas of the log yard.

Responsible environmental management of waste from these wide scale works is a big focus. The waste minimisation project is

helping ensure effective recycling and sustainable disposal of waste.

“We have to take advantage of the opportunities in front of us so we evolve into a Port of the future. Our challenge will be to keep growing while we go through these changes.”

Anthony Delaney, GM Infrastructure and Environment

Result AreasContainer Services

“We’ve set ourselves a lot of ambitious goals this year and we’ve achieved them. We’ve moved from recovery to growth. It’s been hard, but now we’re ready to meet the growth that we know is coming.” Ray Mudgway, GM Container Services

An ambitious "bounce back" back strategy followed by the implementation of a "platform for growth" saw CentrePort rapidly ramp

up container volumes to be well on track to surpass pre-Kaikoura 2016 earthquake volumes.

The previous year’s volumes were significantly impacted with the two ship-to-shore gantry cranes out of action for 7½ months.

The cranes were unavailable for a further 2½ months in FY18 before they returned to service on 18 September 2017. The

provision of geared ships with their own cranes provided by the ANL shipping line was critical during this challenging 10-month

period.

Container Services GM Ray Mudgway said he was always mindful of the pressure on customers as CentrePort pursued an

aggressive strategy to get the cranes up and running.

“We knew some shippers were facing 800 percent increases in domestic transport costs if they couldn’t move cargo through

CentrePort. CentrePort set steep goals because we knew we had to look after our customers,” he said.

While the cranes are back working, there are ongoing operational constraints with just 125 metres of the former 585-metre

Thorndon Container Wharf available. A new multi-berth wharf is being planned, but in the meantime innovations and significant

efficiency gains have enabled operations to track towards pre-quake levels.

Once the cranes were operational, the "platform for growth" was implemented to ensure the right resources, management

structures, ICT systems, business processes, and workforce models are in place to meet current and future growth.

Ray Mudgway said driven by record volumes on the CentreRail network, the outlook for the container business is bright.

“We are achieving great operational outcomes. CentrePort’s productivity levels are as good as any port in New Zealand. We’re

achieving stability and certainty and adding value for our customers.

“It’s been hard but we’re back. CentrePort is in a really good place to service the market and meet the growth we know is

coming,” he said.


“New Zealand has unique logistics challenges. Having access to a local port gives us a leg up in the market and helps us remain internationally competitive.” Daniel Charpienter of Whittaker’s

FY16 FY17 FY18

Container stats

(all in Twenty Foot Equivalent Units – TEU)

131,645 51,750 84,755

(NB: 64% growth

on the previous

financial year)

WHITTAKER’S: BRINGING NEW ZEALAND’S FAVOURITE CHOCOLATE TO THE WORLD

In 2018, Whittaker’s Chocolate exported record volumes of its product across the globe. Internal

Logistics Coordinator Daniel Charpienter said this wouldn’t have been possible without CentrePort’s

help.

“The Port was under significant volume pressure this year. They worked hard to bring back customers

and also meet the challenges created by demolition and repairs. The service we received was top

notch. There were no delays and we always knew where our chocolate was.”

CentrePort’s smooth, efficient supply chain is crucial to Whittaker's' success, especially in overseas

markets. Every day or week counts when products have a shelf life and countries have strict

requirements around what they will and won’t accept.

CONTAINER VOLUME GROWTH

131,645

51,750

84,755

FY16 FY17 FY180

25000

50000

75000

100000

125000

150000

Container Volume Growth FY16-FY18


Break Bulk

BREAK BULK VOLUME GROWTH

It was a remarkable year for break bulk with volumes up across the board despite operating on a reduced footprint due to

ongoing remediation / repair work.

In addition to healthy volumes in logs, vehicles, cement, and wheat, there were other bulk items that helped boost revenue. These

included 69,049 tonnes of boulders, some the size of small cars, shipped by barge from Tarakohoe in Tasman. The boulders were

then moved by truck up to the Transmission Gully project, mainly used for river / stream diversion work.

Break Bulk General Manager Blair Spencer said managing the continually increasing volumes is made possible by planning,

efficiency, and capability, which leads to more throughput.

Focussing on throughput rather than storage means it’s a supply chain exercise. It’s about having a plan to get cargo through the

Port continuously.

“CentrePort seeks to improve the supply chain to increase efficiency and remove fragmentation. The CentreRail network / inland

hub strategy is a core element of this. We’re a supply chain asset,” he said.

ActualsFY15

ActualsFY16

ActualsFY17

ActualsFY18

FY18 vs FY17Growth %

Total Vessel Arrivals 620 644 553 638 15%

Logs

JAS

875,029 1,044,248 1,096,089 1,343,330 23%

Vehicles

Units

21,393 20,901 27,529 28,099 2%

875,029

1,044,2481,096,089

1,343,330

FY15 FY16 FY17 FY180

250000

500000

750000

1000000

1250000

1500000

Logs

Logs (JAS) Actuals FY15-FY18


Ferries and Fuel

“Part of our role is to help Wellington through a natural disaster. We have to think about lifelines and resilience for the region — ferries and fuel are a key part of this.” Andrew Steele, GM Ferries and Fuel

Fuel

For the first time in CentrePort’s history the Port received back-to-back volumes of one million tonnes of petroleum. The 1,024,938

tonnes for FY18 was slightly up on FY17.

The CentrePort facilities are vital to helping keep the region moving, with all of Wellington’s aviation fuel and a significant amount

of vehicle fuel for the lower North Island being handled through the fuel berths.

Ferries and Bulk General Manager Andrew Steele said there is a strong focus on resilience for the fuel berths, not just for

CentrePort’s benefit but for the regional economy.

“At Seaview Wharf, for example, we have an ongoing programme of works to enhance operability while better understanding seismic

resilience. We are working with our oil industry stakeholders to ensure the wharf operates efficiently and effectively,” he said.

Logs – Big Growth Continues

Driving the big numbers in the Break Bulk business were the continued large increases in log volumes. A new record 1,343,330

JAS6 was exported — a 23 percent increase on the previous year. The growth in log volumes through CentrePort has been huge,

nearly doubling in the past five years.

Blair Spencer said managing the demand has been challenging but was achieved effectively and safely. He says CentrePort

achieving supply chain efficiency has benefits all up the line.

“It has implications all the way from Wellington up to the bush. Making sure the logs are getting through the Port as quickly and

efficiently as possible prevents back-ups up the line. My job is to help the guys in the bush keeping going.”

Key to accommodating this growth area is the continued development of log hubs as part of the inland hubs strategy. The

Waingawa hub near Masterton provides temporary storage, weighing, and scaling of logs, helping ensure quick movement

through the Port. An expansion to Waingawa and the establishment of new log hubs in the Wairarapa is being planned.

LOGS STATS (RELATING TO FINANCIAL YEAR)

6. JAS – Japanese Agricultural Standard – the global industry standard measurement of log volume. 1 JAS = approximately 1 tonne.

2013 2014 2015 2016 2017 2018

Logs stats

all in JAS (Japanese

Agricultural Standard)

659,328 807,338 875,029 1,044,248 1,096,089 1,343,330


FUEL FIGURES

Ferries

CentrePort continued working with partners and stakeholders on plans to develop the Northern Gateway, a multi-modal ferry

terminal. CentrePort is working with the Northern Gateway Stakeholder Group that consists of representatives from the Greater

Wellington Regional Council, Wellington City Council, NZTA, Strait NZ Bluebridge, Interislander, and KiwiRail.

The new terminal would be a resilient northern gateway to Wellington and the South Island and provide much improved

connectivity between transport modes. It is hoped this project will progress in the coming year.

Planning was completed and remediation work commenced on the 0.5ha area between the Customhouse building and the former

BNZ building to create a new primary vehicle marshalling site for the Strait NZ Bluebridge ferry operation. Kaikoura earthquake

damage to Kings Wharf had forced vehicle marshalling to be temporarily relocated to Glasgow Wharf (heavy vehicles) and

Interislander Wharf (light vehicles). The new marshalling area is expected to be operational in the latter part of 2018.

Cruise

It was another year of strong growth in the cruise ship business, benefiting both CentrePort and the local economy.

The Port received 81 ship visits, contributing to a 15 percent increase in visitors. Cruise New Zealand estimates the 238,000

passengers and crew arriving in Wellington provided a $59m boost to the local economy.

Significant further growth is forecast with 110 ship visits booked for the 2018/19 season.

“The cruise industry adds tens of millions of dollars to the capital’s retail, hospitality and tourism sectors. We also know from

research that many passengers return to Wellington to spend longer in the region as independent travellers.”

The busiest day of the season was 11 February 2018 with 7,000 people arriving in the capital on the Ovation of the Seas and the

Pacific Jewel.

FY15 FY16 FY17 FY18

Fuel figures

(all in tonnes)

918,456 951,507 1,020,096 1,024,938


Property

CentrePort continued to review its property portfolio to ensure it aligned with the Port’s strategic objectives.

Commercial Buildings

The demolition of the former Statistics House was completed. The property was classed as a destroyed asset as a result of the

Kaikoura earthquake.

Following reaching a settlement with insurers with regards to the CentrePort commercial properties on 4 October 2018, it was

announced the building formerly tenanted by the BNZ would be demolished.

Customhouse was reoccupied by New Zealand Customs in December 2017.

Port Buildings

A range of Port buildings were removed during the year. These included the Port Coldstore and part of Shed 51 (the former cruise

terminal), and storage sheds. These areas will be utilised for a range of purposes including creation of a log berth and vehicle

marshalling areas.


OUR FOCUS

Regeneration PlanCentrePort is embarking on an ambitious plan to better serve the needs of our customers, our people, and our region.

“We have a once-in-a-lifetime opportunity to plan for our future. We’re looking at how we create resilience, adaptability and flexibility in our people and infrastructure. The decisions we make now will impact the Wellington region, as well as wider central New Zealand and our place in it for decades to come.” Anthony Delaney, GM Infrastructure and Environment

Planning for CentrePort’s future: an innovative, future-focused Port for central New Zealand

CentrePort’s vision is to build a 21st century operational asset of which central New Zealand can be proud.

To achieve this, the business is working with customers and other stakeholders to inform its long-term plan for the next 30 years

and beyond, with the first iteration to be delivered in June 2019.

CentrePort’s response to the 2016 Kaikoura earthquake is a key driver for this long-term plan. The earthquake led to a wide-scale

demolition and Port improvement programme. These improvements have created opportunities to reconsider the port’s layout.

Included in longer term planning is the multi-user ferry terminal project and the shipping channel deepening project.

CentrePort is also looking at how technology can be used to make the Port more resilient.

“We need to evolve into a port of the future that benefits our community and our business goals.” Anthony Delaney, GM Infrastructure and Environment

World Class Expertise

CentrePort is working with several international experts to inform future design and approach.

A key partner is Hamburg Port Consulting of Germany, who are specialists in port design. Their team has been onsite looking at

the space available and considering different options for the most effective and efficient layout and supply chain solutions. The

team will consider all options, from how the Port uses its land to how technology can be brought into the business.

CentrePort has also engaged international experts to help the business understand the hazards and risks it faces, and how it can

mitigate these risks.


Projects Towards Long-Term Vision As the long-term plan is developed, CentrePort is focussed on five key areas encompassing a range of projects — some current,

some in the medium term. These focus areas all provide a path towards the long-term vision to support an innovative, future-

focused port.

1. Enablers: to create efficiency through the use of technology and space to enable the big future regeneration projects while we keep the Port going.

• Projects creating space and enhancing utilisation to ensure we are growing our freight capacity.

• Building demolition programme. A total of 10 buildings were demolished / partly demolished including;

- Shed 29 (G&A Building) and the former Seaworks building on the ‘E Site’ to create a new vehicle marshalling area for

Strait NZ Bluebridge.

- Former Statistics House – vehicle parking.

- Partial demolition of Shed 51 to create a second log berth.

- Shed 37 to expand the log yard capacity.

- Wellington Port Coldstore

- Former Quay Marine Building

- Dimond Building

• Separation for improved health and safety and control; access realignment and improvements including Hinemoa Street and

North Gate improvements projects (at planning stage).

• ICT and technology platforms and operational efficiency measures; new systems and container-handling equipment introduced

improving container operations.

2. Resilience: We are tackling key areas of Port operations resilience to ensure continuity for the business and the region.

• Upgrades to Seaview Wharf including fenders, lighting, and improved mooring systems.

• Planning for resilience work on Kings Wharf, Aotea Quay berths 1-3, and demolition of Thorndon Container Wharf 1.

3. Reinstatement/repair.

• Pavement works across the Port including the log yard, as well as improving storm water drainage.

• Significant horizontal infrastructure repair / replacement including communications and power systems.

4. Inland Hub Developments: to ensure we can grow freight capacity.

• Expanding and investing in development our network of inland freight hubs in New Plymouth, Whanganui, and the Wairarapa.

5. Temporary Works Programme.

• 5000 tonnes of asphalt laid to repair paving improving depot running roads, container transfer sites, and log yard.

• Completion of $28 million gantry crane project.


OUR CENTREPORT

Our Role CentrePort is a key strategic asset for central New Zealand:

• Facilitating economic growth in regions in the North and South Islands through safe and efficient movement of cargo.

• Providing supply chain solutions and expertise.

• Playing a key role in the New Zealand Lifelines Network.

Chairman’s ReportThe Board is pleased to report a return to pre-2016 Kaikoura earthquake levels of performance in most areas of the business,

helping drive a strong financial result.

Healthy trade volumes saw revenue increase by 16 percent to $73.8m, which was achieved against the background of ongoing

operational constraints.

Underlying net profit after tax and before fair value and earthquake impact adjustments was $11.8m — a 37 percent improvement

on the previous year.

An excellent operational performance saw volumes of logs, vehicles, and petroleum at or surpassing pre-quake levels. The

business is well on the way back in container volumes. CentrePort also experienced a bumper cruise ship season with a 15

percent increase in visitors arriving.

JR’S ORCHARDS: CUSTOMER-FIRST APPROACH SETS CENTREPORT APART

JR’s Orchards has relied on CentrePort to connect it with international markets for the past 10 years.

JR’s Orchards plans to double its export volume by 2021, and will continue to grow with CentrePort.

JR’s Orchards Managing Director Jaimee Burns said with major shipping lines returning this year, the

company has been able to maximise its returns.

“Last year CentrePort moved heaven and earth to ensure we had what we needed after the

earthquakes. We can now grow together.”

For JR’s Orchards, CentrePort’s streamlined and customer-centric approach is what sets them apart.

JR’s Orchards is the largest exporter by volume in the Wairarapa. It employs 26 fulltime staff, which

grows to 140 during the harvest season.


“CentrePort’s customer-first approach is what sets them apart from other ports in New Zealand.” Jaimee Burns of JR’s Orchards

The strong performance enabled the payment of a dividend of $2m to our shareholders (Greater Wellington Regional Council and

Horizons Regional Council), after no dividend the previous year due to capital requirements as a result of the Kaikoura quake.

Resilience to Regeneration

This year saw a short-term focus on the recovery of all business units, which was achieved. Our medium- and longer-term

strategic priorities are designed to build resilience into the business, and continue growth to enable CentrePort to reach its full

potential as a world-class freight-handling operation and regional asset for the central New Zealand economy. Several elements

of the resilience work have already been completed or are underway.

The Board supports the business in developing a regeneration plan which will help create a 21st century strategic logistics asset

benefitting the business, stakeholders, and the wider New Zealand economy in the decades to come.

I thank our shareholders, customers, and partners for their ongoing support.

I also thank my fellow Directors for their input.

The Board thanks the CentrePort team, including Chief Executive Derek Nind, for their hard work and great progress in the quake

repair and remediation while getting on with "business as usual". Achieving growth whilst dealing with operational constraints

was an excellent achievement.

Chief Executive’s ReportMajor progress was made both operationally and strategically. The business rebounded from the impact of the 2016 Kaikoura

earthquake, while projects and strategies were progressed that are growing the business, building resilience, and setting the

course for the future of CentrePort for decades to come.

Driving these achievements has been our people. Keeping our people healthy and safe was a major focus and all CentrePort’s

metrics in this area showed significant improvement, with big shifts in some areas such as lost time through injury more than

halving. While senior management and the Board strongly supported health and safety, it was the attitude and engagement of

staff that was key.

I congratulate the efforts of our people, suppliers, and contractors for their hard work.


Business Rebounds

The business completed the rebound from the impacts of the 2016 Kaikoura earthquake. While repair, remediation, and resilience

works continued, operationally the business returned to and in some cases surpassed pre-quake levels. Exporters and importers

across central New Zealand and shipping lines returned to help achieve a year of record volumes in several areas including logs,

vehicles, and petroleum.

The return to operation of the two ship-to-shore cranes in September 2017 after having been out of action for 10 months was

a major boost. By year end we were tracking to return to pre-quake volumes with potential for strong growth. For example,

CentrePort hit its highest ever January container volume in 2018.

Insurance

Good progress was made on the three earthquake insurance claims. Settlement was reached in two of the claims in relation to

joint venture activities (Wellington Port Coldstore and Commercial Properties). Port infrastructure remains to be settled.

To 30 June 2018 CentrePort had received a total of $233m on all three claims, with a further $100m received in July 2018. We

continue to work closely with our engineers and insurers in relations to the Port claim. Of the total of $333m received to date,

$210m relates to the Port infrastructure claim.

As at the end of the year, $61.4m had been spent on earthquake-related expenditure including the partial demolition of Thorndon

Container Wharf and several buildings.

Investing in Resilience, Growth, and Regeneration

Investment and planning to improve resilience of the business remains a strong focus. Applying the lessons from the Kaikoura

earthquake, we are building enduring assets, and investing in technology and — most important of all — our people.

That investment in people included over 12,500 hours of training for the Container Services team, crane drivers travelling to

Belgium to access state of the art simulators, and marine pilots using the latest training technology in Australia. There are

ongoing leadership training programmes and we have launched a future leader’s programme.

We continued to create space on-port through the demolition of damaged / destroyed buildings and assets including the former

Statistics House, the Coldstore, part of Thorndon Container Wharf, Shed 51 (partial demolition) and storage sheds on the "E site"

between Customhouse and the former BNZ building. This work has paved the way for projects, enhancing resilience. Work was

underway or planning had commenced on projects including vehicle marshalling for the Strait NZ Bluebridge operation, a second

log berth, and improved traffic flows.

We continue to work with partners on options for a multi-user ferry terminal, while the channel-deepening project remains part of

our medium-term plans.

Growth

The inland hub strategy put in place in 2013 continues to drive growth in the business. The partnership with KiwiRail for the

CentreRail service saw record volumes this year helping connect central New Zealand exporters and importers and shipping

companies. We invested in further development of our hubs including the Smart Road facility in New Plymouth and Waingawa in

the Wairarapa. Plans were developed for new hubs being created in the future.

A platform for growth plan was rolled out in the container services business. It focussed on ensuring the correct resources,

management structures, ICT systems, business processes, and workforce models are in place. This will lay the foundation for our

target to achieve further growth.


Regeneration

CentrePort has embarked on an ambitious plan to better serve the needs of our customers, our people, and our region. We are

developing a plan to create a 21st century logistics supply asset in the decades to come. Enabling projects and programmes are

already underway, such as the inland hub network. We are developing medium- and long-term plans to build resilience and grow

capacity. Working with our stakeholders, including customers and partners, will help inform this planning.

We’re accessing world-class expertise to help ensure we make the right decisions. In the past year this has included working with

world-renowned port planning company Hamburg Port Consulting, and engineering consultancy Royal Haskoning DHV from the

Netherlands.

People

“The Port is changing so quickly, which has made it tough for our people. We spend a lot of time checking in on the basics — we’re making sure people are sleeping right, eating right and taking care of themselves so they can cope with the changes happening around them.” Murray Julian, GM People Safety and Culture

OPEN COUNTRY: A DIFFERENT WAY OF WORKING TOGETHER

Open Country is a dairy ingredient manufacturer with four plants across New Zealand. It sources

ingredients from 900 farms across the country, and works closely with CentrePort in Whanganui.

CentreRail is crucial to Open Country’s success in Taranaki and Manawatu. All of Open Country’s

exports from its Whanganui plant go through the rail hub. The rail hub has made everything more

efficient and has created a smoother supply chain.

During the latest dairy season, Open Country worked with the port to send its largest volume of exports

ever through the Port. Logistics Lead Jameel Afiz said this is testament to the Port’s commitment to

recovery and growth.

“Part of what sets CentrePort apart is their personal touch and commitment to their customers.

“CentrePort generates so much value for their customers by working with cargo holders, carriers, and

the port — they transcend the conventional boundaries.”

“Thinking innovatively about how to use transport modes to make supply chains more efficient is what

will keep CentrePort ahead of the competition.” – Jameel Afiz, of Open Country


Kate Gardner — Senior Administrator for People and Capability

“How often do you get the chance to work for a port that’s regenerating? In the last year, we’ve hired more than 50 people who all

want to be part of something unique.”

“We look for people who have a health and safety attitude that matches our own — it’s about making sure we all get home safely.”

Jason Tauau — Container Services Cargo Handler and Trainer

“Everything is different from when I started and when I think about the future, I think everything will be bigger and better —

bigger cranes, bigger ships, and more exports and imports.”

“On the job, we always look out for each other. When you walk through the gates to start your day you need to know you will

always walk back out at the end.”

Euan Slight — Container Services Depot Team Leader

“Technology will be a big part of our future. It has to be.”

“Our team wants to succeed and prove we’re one of the best depots in the country. We work as hard as we can for each other to

make that happen.”

“For us, health and safety is about taking our time and learning from one another.”

Captain Charles Smith — Marine Services

“I’m excited that we have a clear way forward. We’ll be welcoming more larger ships and I can’t wait to meet that challenge

head-on.”

“Ships come and go at all hours of the day and night and in any kind of weather. We need to check for fatigue and make sure our

team is safe out there. Health and safety is an ingrained attitude and everyone plays their part.”

Craig Riddell — Cargo Supervisor, Break Bulk Services

“After 21 years at the Port, I still love my job. Every day I get challenged, I meet great people, I have a laugh, and then I go home

to my family. The Port is in my blood.”

“Sometimes I’m surprised by how much volume we can move. It’s about having the right people with the right attitude.”

“Health and safety is crucial. It’s about leading by example from the moment we step into a company vehicle and for the entire

time that we’re on the Port. We keep our eyes open to spot issues and learn from our mistakes.”

Health and SafetyWorker participation has been key to major progress being made across the board in health and safety performance at

CentrePort. All key metrics saw positive trends, including lost time injuries more than halving.

General Manager People and Capability Murray Julian says while the Board and senior management are committed to a healthy

and safe workplace, it’s been the actions and attitudes of workers that have helped achieve big gains.

“We’ve done a lot of work identifying safety leaders through the Safety Representative system. They’ve been trained and the

business is utilising them to help people take ownership in their areas of the business to drive health and safety. The reps are

helping drive innovation and improve cultures.


“The mind-set has changed from how do we work operationally to how do we do things safely? That’s a big culture shift.

“Our bSafe reporting system has been brilliant at driving innovation and improvement. Improved levels and quality of reporting

have helped us identify trends which allows us to design, with our workers, solutions and correction actions,” Murray said

Ports are busy workplaces with up to 1000 people on CentrePort at various times, including multiple Persons Conducting

Business or Undertakings (PCBUs). All PCBUs involving works on Port are put through a three-stage health and safety process.

In the past year:

• 281 contracting companies went through the CentrePort accreditation process

• 2,685 staff from those companies were inducted

• The health and safety team reviewed 517 Safe Work Method Statements / work methodologies.

Capability and Capacity for Growth CentrePort is in growth mode, and to be ready to handle that growth means having sufficient people capability and capacity.

There’s been a heavy emphasis on recruitment and ensuring the right people with the appropriate skills join the company. There

were 59 new staff recruited in FY18, which contributed to a 10 percent growth in head count.

A comprehensive training programme is in place to ensure staff have the appropriate skills. Fifty-eight staff in Container Services

received 12,678 hours of training.

Specialist world-class training was provided, such as cargo handlers attending a crane driving programme in Antwerp, Belgium.

The Antwerp facility provides state-of-the-art crane simulators. The Marine Pilot training programme includes utilising a

simulator at a facility in Brisbane that provides a 360-degree view of Wellington Harbour, and a manned ship model training

facility at Port Ash, New South Wales.

There is an ongoing training programme to upskill current managers and team leaders, as well as a future leader’s programme.

Centreport has 29 health and safety reps out of 237 staff


Community CentrePort partners with organisations that reflect both community engagement with the local environment, and the business

sector boosting the local economy.

The company continued its support of the CentrePort International Youth Match Racing Regatta staged by the Royal Port

Nicholson Yacht Club. The event, held in fresh conditions on Wellington Harbour in February 2018, was won by Leonard

Takahashi’s Pacific Racing Crew.

CentrePort was proud to sponsor the Export New Zealand "Medium to Large Exporter Award", which was won by innovative

games publisher Pik Pok.

The Maritime Heritage Trust received continued support for its restoration of the Hikitea Floating Crane. This working piece of

history receives ongoing maintenance and restoration from a group of dedicated volunteers. The 92-year-old Hikitea, built in

Scotland and located in Wellington Harbour since 1926, is thought to be the oldest remaining self-propelled operable floating

crane in the world.

EnvironmentCentrePort has a concrete commitment to environmental sustainability — literally.

The Waste Minimisation Project launched in August 2017 is dealing with the large amount of waste material being generated by

ongoing remediation, repair, demolition, and resilience work on-port. Significant quantities of waste concrete, steel, and asphalt

have potential environmental impacts and this programme seeks to manage those.

UNION AGREEMENT

An “absolutely revolutionary” Collective Employment Agreement (CEA) will be a major boost for staff,

CentrePort and customers according to People and Capability GM Murray Julian.

In March 2018 the Terms of Settlement on a new three year CEA was ratified and signed off between

CentrePort and three Unions – the Maritime Union of New Zealand (MUNZ), the Rail and Maritime

Transport Union of New Zealand (RMTU), and Etu.

Murray Julian says the agreement allows the business to improve the way it utilises labour, allowing

for flexibility of roles. It also provides greater certainty and better work-life balance for workers.

RMTU Organiser Todd Valster and MUNZ Wellington Branch Assistant Secretary John Whiting said the

agreement was based on a strong working relationship between CentrePort and the Unions.

“We had a shared vision with CentrePort in what we wanted to achieve for workers. Greater stability

and certainty around work were good outcomes from this agreement,” they said.

Murray Julian believes the agreement also positions CentrePort and its people well for the future.

“For a number of years volumes were relatively static and we ran a ‘defensive’ labour model. This

agreement puts us in a prime position for growth,” he said.


Instead of being trucked to landfills, waste concrete is recycled through crushing machines at a Kaiwharawhara Point site and

turned into gravel fill. This is then used for remediation and construction projects on-port. To date 32,908 tonnes of concrete have

been recycled.

With not a gram of the waste concrete leaving Port, to date the operation has saved more than 2,035 hours of truck movements

on our roads. This has reduced emissions by 218 tonnes of CO2. In addition nearly 4000 cubic metres of asphalt and 1210 tonnes

of steel have been recycled.

Improved storm water management

A new regulatory regime will improvement storm water management on Port. CentrePort engaged with the Greater Wellington

Regional Council under the Proposed Natural Resources Plan (PNRP) process. An application was developed over the year and

lodged for a ten year consent.

Environmental Management

A thorough environmental control programme was applied to all Port activities, including the demolition, remediation and

construction works. Extensive risk assessments were conducted as part of pre-planning. An adaptive approach was taken,

amending plans as new risks were identified.

CentrePort’s environmental approach is guided by the Board's Health, Safety and Environment sub-committee that meets

quarterly, an internal sustainability committee, and three meetings annually of the Environmental Consultative Committee, which

includes representatives from community groups, the Greater Wellington Regional Council, and the Wellington City Council.

Governance

Approach to Corporate Governance

The CentrePort Board of Directors (the Board) is committed to maintaining best-practice governance policies and behaviours.

Policies are tested against applicable standards detailed in NZX’s Corporate Governance Code. The Board’s governance

framework adheres to the majority of applicable standards as if the company were a listed public company.

In addition, the Directors support the principles set out in the Code of Practice for Directors, issued by the Institute of Directors

in New Zealand. While recognising that this code expresses principles and does not purport to determine any detailed course of

conduct, the Directors support the need for the highest standards of behaviour and accountability.

Board of Directors

The Board is elected by shareholders. The Port Companies Act 1988 and the Companies Act 1993 govern the relationship between

CentrePort and its shareholders.

Role of the Board and Responsibilities

The Board has statutory responsibility for the affairs and activities of CentrePort Limited and its subsidiary companies (the

Group). Without undermining this responsibility, the day-to-day leadership and management of the Group is delegated to the Chief

Executive and management of CentrePort.


Key areas of responsibility that remain with the Board are:

• setting the direction, strategies, and performance benchmarks of CentrePort, including the monitoring of progress, and

implementing and achieving strategies and performance objectives

• approving, at least annually, a strategy, business plan and budget

• monitoring compliance against statutory requirements

• appointing and reviewing the performance of the Chief Executive

• safeguarding and growing the value of CentrePort Limited’s assets.

Composition

The Board continues to give close consideration to its size, composition, and spread of experience and expertise.

Procedures for the operation of the Group are governed by the company’s constitution. Under this constitution, the Board must

consist of between six and nine Directors.

Shareholders appoint Directors by ordinary resolution or by written notice to the company, signed by a majority of shareholders

in the company. Not more than two members or employees of the shareholders may hold office as Directors.

Each year one-third of the Directors are required to retire by rotation at the annual general meeting. The basis for determining

which Directors retire by rotation is length of service in office since their last election or appointment. In addition, any Director

who has been a Director for more than three years is required to retire. Retiring Directors are eligible for re-election.

Conflicts of Interest

Directors are cognisant of the possibility of conflict of interest between their duty to CentrePort and their own interests. Where

conflicts do exist, the company maintains an interests register in which certain transactions and matters involving the Directors

must be recorded.

During the year, the Group was involved in business with companies for which the Directors have provided general disclosures.

The names of those entities have been recorded in the interests register. Where transactions have taken place, these were

completed under normal commercial terms and on an "arm’s length" basis. Details of the specific interests an individual Director

has in a transaction are also entered in the interests register.

Board Meetings

The Board met 12 times during the year. Directors receive papers and regular management reports for consideration in advance

of meetings. Directors have unrestricted access to company records and information.

Finally, executives are regularly involved in Board deliberations and Directors have opportunities, including visits to the Group’s

various operations, for contact with a wider group of employees.

Board Committees

Three Board committees assist in the execution of the Board’s responsibilities, each of which is subject to a defined charter:

• Audit and Risk Committee

• Remuneration Committee

• Health, Safety and Environmental Committee.

Other ad hoc committees are established as required. The committees have a number of scheduled meetings to achieve their

charter objectives. The committees make recommendations to the Board and only exercise the Board’s decision-making powers

when they have specific delegated powers to do so.


Audit and Risk Committee

Members as at 30 June 2018

Mr D Benham (Chair), Mr L Johnstone, Mr RM Petersen and Mrs S Haslem.

Number of meetings held

This committee met four times during the year. The external auditors attended four meetings.

Principal function

The Audit and Risk Committee assists the Board in fulfilling its duties and responsibilities relating to:

• financial reporting and regulatory compliance

• taking of any reasonable steps necessary to safeguard the Group’s assets, and to prevent and detect fraud and other

irregularities

• reviewing treasury risk management controls.

The Audit and Risk Committee assists the Board to fulfil the above responsibilities by:

• considering the adequacy of the form and content of published financial statements

• determining whether accounting policies adopted by the Group are appropriate, consistently applied, and adequately disclosed

• ensuring that significant estimates and judgements made are reasonable and prudent, and that all applicable financial

reporting standards have been followed

• ensuring the Group keeps proper accounting records that disclose, with reasonable accuracy, the financial position, results of

operations, and cash flows of the company and the Group

• reviewing the establishment and continued effectiveness of the Group’s policies, practices, procedures, and systems of internal

control and risk management

• meeting with the external auditors to:

- discuss the adequacy of internal controls and any areas of concern

- examine any recommendations made by the auditors for improvement.

Remuneration Committee


Dr R S Janes (Chairman), Mr L Johnstone and Mrs S Haslem


This committee met four times during the year.

Principal function

The Board is responsible for:

• establishing and maintaining the integrity of remuneration practices in a way that supports achievement of the company’s

business goals

• ensuring that remuneration practices at all times seek to improve the performance of individual employees, the organisation,

and the teams that comprise it.


The Remuneration Committee assists the Board to fulfil the above responsibilities by:

• reviewing the company’s remuneration policies and practices, to ensure they develop, motivate, and reinforce high levels of

performance, in a way that promotes the trust and understanding of the company’s employees

• monitoring compliance with remuneration legislation and case law

• reviewing with management the company’s performance review and incentive system

• considering detailed recommendations for the remuneration of executive management to ensure they are appropriate

• reviewing succession planning, talent management plans, and staff engagement surveys.

Health, Safety and Environmental Committee


Dr R S Janes (Chairman), Mr J A Monaghan and Mr L Johnstone


This committee met four times during the year.

Principal function

The Board has ultimate accountability for ensuring, so far as is reasonably practicable, the health and safety of workers and

others affected by CentrePort’s business and undertakings and ensuring the company’s compliance with health, safety and

environmental laws, regulations and ethics.

The Health, Safety and Environmental Committee assists the Board to fulfil these responsibilities by:

• monitoring compliance with:

- the Board’s safety and environmental policies

- health, safety and environmental legislation and case law

• reviewing with management:

- hazard analysis and accident prevention systems of the company

- work practices by visiting the Group’s operations to determine that work is conducted in a safe and hazard-free manner

- the implementation of new systems and procedures to enable all activities to be carried out in a safe and environmentally

responsible way

- the implementation of the Group’s strategic objectives for quality as identified in the strategic plan

• monitoring the coordination with other agencies, customers and stakeholders on environmental and disaster planning,

including consideration of emergency response plans.

CENTREPORT LIMITED GROUP SUMMARY FINANCIAL STATEMENTS FOR THE YEAR

ENDED 30 JUNE 2018

-2-

CentrePort Limited Group

2018 Results Overview

2018 Results Overview The tables presented in the 2018 results overview on pages 2 to 5 present unaudited non-GAAP financial information prepared using financial information derived from the audited financial statements.

2018 2017 $'000 $'000

Operating Revenue 73,801 63,689 Operating Expenses (69,058) (60,065) Earnings from Operations Before Equity Earnings, Interest, Tax, Earthquake Impacts, and Changes in Fair Value 4,743 3,624 Business Interruption Insurance Income 8,477 8,985 Earnings from Operations including Business Interruption Insurance 13,220 12,609

Share of Associates Profit After Tax (excluding Earthquake Impacts and Changes in Fair Value) (1) 3,873 3,242 Gain/(Loss) on Sale of Assets (32) (4) Earnings from Operations Before Interest, Tax, Earthquake Impacts, and Changes in Fair Value 17,061 15,847 Net Interest Costs (excluding interest rate swaps) (1,842) (5,062)

Underlying Net Profit Before Tax, Earthquake Impacts and Changes in Fair Value 15,219 10,785

Income Tax (Expense) (excluding tax effect on Earthquake Impacts and Changes in Fair Value) (2) (3,390) (2,148)

Underlying Net Profit After Tax Before Earthquake Impacts and Changes in Fair Value 11,829 8,637

Earthquake Related Items: - Insurance Income less Impairments 10,881 73,783 - Associates (1) 17,628 (30,220) - Income Tax on Earthquake Items (2) (2,324) (13,155) Total Earthquake Costs, Net of Tax 26,185 30,408

Underlying Net Profit After Tax Before Changes in Fair Value 38,014 39,045

Change in Fair Value of Financial Instruments 8,778 10,330 Realised Loss on Termination of Interest Rate Swaps (9,543) (4,347) Investment Property Fair Value Adjustments (826) - Fair Value Adjustments in Associates (1) 1,500 8,364 Income Tax on Fair Value Adjustments (2) 172 (1,675) 81 12,672 Net Profit/(Loss) After Tax from Continuing Operations 38,095 51,717

Other Comprehensive Income - Increase in the Value of Port Land - 9,012 - Provision for Land Resilience - (63,000) Total Other Comprehensive Income/(Loss) - (53,988) Total Comprehensive Income / (Loss), Net of Tax 38,095 (2,271)

Note:

1. Aggregates to Share of Profit / (Loss) of Investments using the Equity Method of $22,999k (2017: $(18,614k))

2. Aggregates to Income Tax (Expense) / Benefit of $(5,541k) (2017: $(16,978))

CentrePort Limited Group 2018 Results Overview

(continued)

-3-

Results from Port and Property Operations Port Property Group Port Property Group 2018 2018 2018 2017 2017 2017 $'000 $'000 $'000 $'000 $'000 $'000

Operating Revenue 72,145 1,656 73,801 61,748 1,941 63,689 Operating Expenses (65,632) (3,426) (69,058) (56,819) (3,246) (60,065) Earnings from Operations Before Equity Earnings, Interest, Tax, Earthquake Impacts, and Changes in Fair Value 6,513 (1,770) 4,743 4,929 (1,305) 3,624 Business Interruption Insurance Income 7,895 582 8,477 8,457 528 8,985 Share of Associates Profit After Tax (excluding Earthquake Impacts and Changes in Fair Value) 81 3,792 3,873 208 3,034 3,242 Gains on Sale of Assets (32) - (32) (4) - (4) Earnings from Operations Before Interest, Tax, Earthquake Impacts, and Changes in Fair Value 14,457 2,604 17,061 13,590 2,257 15,847 Preference Share Dividend CPPL-CPL 1,500 (1,500) - 1,500 (1,500) - Net Interest Costs (excluding interest rate swaps) 520 (2,363) (1,842) (2,845) (2,217) (5,062) Underlying Net Profit Before Tax, Earthquake Impacts and Changes in Fair Value 16,477 (1,259) 15,219 12,245 (1,460) 10,785 Income Tax (Expense) (excluding tax effect on Earthquake Impacts and Changes in Fair Value) (4,865) 1,475 (3,390) (3,649) 1,501 (2,148) Underlying Net Profit After Tax Before Earthquake Impacts and Changes in Fair Value 11,612 216 11,829 8,596 41 8,637 Earthquake Related items: Insurance Income less Impairments 6,689 4,192 10,881 81,029 (7,246) 73,783 Associates 1,179 16,449 17,628 3,591 (33,811) (30,220) Income tax on EQ items (1,150) (1,174) (2,324) (13,403) 248 (13,155) Total Earthquake Costs Net of Tax 6,718 19,467 26,185 71,217 (40,809) 30,408

Underlying Net Profit After Tax Before Changes in Fair Value 18,330 19,683 38,013 79,813 (40,768) 39,045

Change in Fair Value of Financial Instruments 8,778 - 8,778 10,330 - 10,330 Realised Loss on Termination of Interest Rate Swaps (9,543) - (9,543) (4,347) - (4,347) Investment Property Fair Value Adjustments 37 (863) (826) - - - Fair Value Adjustments in Associates - 1,500 1,500 - 8,364 8,364 Income Tax on Fair Value Adjustments 214 (42) 172 (1,675) - (1,675) Net Profit/(Loss) After Tax from Continuing Operations 17,816 20,278 38,095 84,121 (32,404) 51,717

Other comprehensive income - Increase in the Value of Port Land - - - 9,012 - 9,012 - Provision for Land Resilience - - - (63,000) - (63,000) Total Other Comprehensive Income/(Loss) - - - (53,988) - (53,988) Total Comprehensive Income, Net of Tax 17,816 20,278 38,095 30,133 (32,404) (2,271)

CentrePort Limited Group2018 Results Overview

(continued)

Performance against Statement of Intent

Unit FY18 Target

Underlying Net Profit Before Tax, Earthquake Impacts, and Changes in Fair Value $m 15.2 20.1

Underlying Net Profit After Tax Before Earthquake Impacts and Changes in Fair Value $m 11.8 15.9

Dividend $m 2.0 0

Return on Assets (1) % 6.0% 10.8%

Return on Port Assets (1) % 7.6% 13.2%

Return on Property Assets (1) % 2.8% 5.0%

Return on Equity (2) % 5.5% 8.0%

Dividend as a % of Underlying Net Profit After Tax Before Earthquake Impacts and Changes inFair Value % 16.9% 0.0%

Underlying Net Profit After Tax Before Earthquake Impacts and Changes in Fair Value per share $ 0.51 0.68

Dividend per share $ 0.09 0

Net Assets per share $ 10.01 10.43

1. Return on Assets = Earnings Before Interest, Tax, Earthquake Impacts, and Changes in Fair Value / Average Openingand Closing Total Assets

2. Return on Equity = Underlying Net Profit After Tax Before Earthquake Impacts and Changes in Fair Value / AverageOpening and Closing Total Equity

The SOI Targets are from the Statement of Intent for the financial years ended 30 June 2018 to 2020 which was approvedfor issue in May 2017. At the time that the SOI Targets were approved the financial impact to CentrePort Ltd of theNovember 2016 earthquake was highly uncertain.

-4-

CentrePort Limited Group 2018 Results Overview

(continued)

-5-

Five Year Trends 2014 2015 2016 2017 2018

$'000 $'000 $'000 $'000 $'000

Revenue from Continuing Operations

Port 60,820 66,237 72,546 61,748 72,145

Property 5,105 3,557 3,651 1,941 1,656 Total 65,925 69,794 76,197 63,689 73,801 Associate Profit After Tax (excluding Earthquake Impacts and Changes in Fair Value)

Port 13 (391) 205 208 81

Property 6,669 6,724 5,820 3,034 3,793 Total 6,682 6,333 6,025 3,242 3,874 Earnings Before Interest, Tax, Earthquake Impacts, and Changes in Fair Value

Port 13,885 15,931 16,793 13,590 14,457

Property 7,928 6,841 5,824 2,257 2,605 Total 21,813 22,772 22,617 15,847 17,062 Underlying Net Profit After Tax from Continuing Operations and Before Earthquake Impacts and Changes in Fair Value

Port 8,099 8,914 10,417 8,596 11,612

Property 3,736 3,347 2,889 41 218 Total 11,835 12,261 13,306 8,637 11,830

Total Comprehensive Income/(Loss)

(4,460) 13,666 11,604 (2,271) 38,095

Total Non-Current Assets Port 183,702 211,400 212,322 127,821 128,721 Property 135,246 101,894 103,393 70,239 93,433 Total 318,948 313,294 315,715 198,060 222,154 Total Bank Term Borrowings Group 114,000 102,000 102,000 36,000 -

Total Equity Group 195,180 196,510 201,314 198,343 234,439

2014 2015 2016 2017 2018

Dividends Declared per Share $ 0.11 $ 0.27 $ 0.29 $ 0.03 $ 0.09 Underlying Earnings per Share (after EQ costs) $ 0.12 $ 0.60 $ 0.58 $ 1.67 $ 1.63 Net Assets Backing per Share $ 8.33 $ 8.62 $ 8.61 $ 8.47 $ 10.00 Gearing Ratio (Debt to Debt plus Equity) 39% 36% 38% 19% 9%

-6-

CentrePort Limited Group Summarised Financial Statements

Summarised Financial Statements

For the year ended 30 June 2018 Financial Summary

CentrePort Limited Group Summary Financial Statements The summary financial statements of CentrePort Ltd Group for the year ended 30 June 2018 on pages 6 to 11 have been extracted from the full financial statements. The summary financial statements have been prepared in accordance with FRS 43: Summary Financial Statements. The full financial statements of the Group have been prepared in accordance with generally accepted accounting practice and they comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS). The Group is a profit oriented entity. The Group has made an explicit and unreserved statement of compliance with International Financial Reporting Standards in note one to its full financial statements.

The summary financial statements are represented in New Zealand dollars and all values are rounded to the nearest one thousand dollars ($000).

The financial statements for the year ended 30 June 2018 were authorised for issue by the Board of Directors on 12 September 2018 and have been audited with an unmodified audit opinion issued with an emphasis of matter in relation to the uncertainties of the effects of the Kaikoura earthquake on the financial statements of the Group. The full financial statements are available from the CentrePort website www.centreport.co.nz or CentrePort offices at CentrePort House, 1 Hinemoa Street, Harbour Quays.

The summary financial statements were authorised for issue on 25 September 2018.

The summary financial report cannot be expected to provide as complete an understanding as provided by the full financial statements of the Group.

Earthquake Provisions and Impairments

The results include the financial impacts of the 14 November 2016 Kaikoura earthquake. The earthquake significantly damaged Port infrastructure and Port properties including the land on which the Port operates.

The Group has separate insurance policies for CentrePort Ltd and CentrePort Properties Ltd. An insurance claim process has commenced and engineering damage assessments are being completed.

CentrePort Ltd has a total insured value (in relation to port infrastructure) of $600.0m for both Material Damage and Business Interruption combined. The Business Interruption covers a 36 month indemnity period. Insurance progress payments of $60.0m were received by CentrePort Ltd in the year ended 30 June 2018 (2017: $100.0m) bringing total progress payments received to 30 June 2018 to $160.0m.

CentrePort Properties Ltd, including its associate entities (SPVs') has a total insured value of their property portfolio of $276.8m including loss of rents (of up to $49.8m). The indemnity period is 36 months. CentrePort Properties Ltd received a progress payment of $40.0m in the year ended 30 June 2018 (2017: $10.0m) bringing total progress payments received to date to $50.0m. An allocation totalling $41.0m (2017: $7.2m) has been made to the SPVs.

The carrying value of CentrePort’s key infrastructural assets were assessed for impairment following the earthquake. Those assets considered to be destroyed have been completely impaired. For assets that were partially damaged CentrePort has estimated the impairment adjustments. An impairment of $63.9m was recognised in the year ended 30 June 2017. A further impairment of $2.6m has been made in the current year.

An adjustment of $63.0m was made to the fair value of port land in the year ended 30 June 2017 to recognise the resilience work that needs to be undertaken to support the land. No change has been made to this adjustment in the year ended 30 June 2018.

Special Purpose Vehicles

The Group has interests in SPVs that own commercial property. The properties owned by the SPVs were significantly damaged by the earthquake and the Group’s equity accounted earnings have been affected by the estimated earthquake related costs and insurance proceeds. In particular, the financial statements for Harbour Quays F1F2 Ltd, the owner of BNZ House, have been prepared on the basis that the insurance claim for the earthquake damage to the building will be accepted for the full loss to the building (being the indemnity value of $84.8m). This is a change from the prior year where the proceeds from the insurance claim were based on the estimated costs to repair the building.

-7-

Subsequent Events

Subsequent to balance date, CentrePort Ltd received an insurance advance of $50.0m and CentrePort Properties Ltd received an insurance advance of $50.0m of which $3.6m has been allocated to Harbour Quays A1 Ltd and $46.3m to Harbour Quays F1F2 Ltd.

Subsequent to balance date, CentrePort Properties Ltd and the insurers have agreed terms for a final settlement of the insurance claim for CentrePort Properties Ltd, Harbour Quays A1 Ltd, Harbour Quays D4 Ltd and Harbour Quays F1F2 Ltd. At the date of approving the full financial statements on 12 September 2018, the final settlement documentation has not been finalised.

Dividend

An interim dividend of $2.0m was paid on 29 June 2018. A final dividend of nil was declared after balance date (2017: nil).

-8-

Summarised Statement of Comprehensive Income For the year ended 30 June 2018

2018 2017

$'000 $'000

CONTINUING OPERATIONS Operating Revenue 73,801 63,689 Operating Expenses (69,058) (60,065) Earnings from Operations Before Interest, Equity Earnings, Earthquake Impacts, Changes in Fair Value, and Tax

4,743 3,624

Net Interest Costs (11,385) (9,409) Share of Profit of Investments Using the Equity Method 22,999 (18,614) Net Gain/(loss) on Disposal of Assets (32) (4) 16,325 (24,403)

Earthquake Related items: Temporary works expenditure and demolition costs (33,628) (19,305) Impairment of assets relating to earthquake damage (2,596) (63,968) Insurance proceeds income 55,583 166,042 19,359 82,769

Changes in Fair Values Increase / (Decrease) in Fair Value of Investment Property (826) - Increase/ (Decrease) in Fair Value of Financial Instruments 8,778 10,330 7,952 10,330

Profit before Income Tax 43,636 68,696 Income Tax Benefit / (Expense) (5,541) (16,978) Profit for the Year from Continuing Operations 38,095 51,718

Other Comprehensive Income

Increase / (Decrease) in Value of Port Land after Tax - 9,012 Adjustment to fair value for land resilience impact - (63,000) Other comprehensive income for the year - (53,988)

Total comprehensive income / (loss) for the year, net of tax 38,095 (2,270)

-9-

Summarised Statement of Changes in Equity For the year ended 30 June 2018

Attributable to equity holders of the Company

Share Capital Retained earnings

Revaluation reserve Total equity

$'000 $'000 $'000 $'000

Balance as at 1 July 2017 30,000 159,759 8,585 198,344

Total Comprehensive Income for the Year, Net of Tax - 38,095 - 38,095 Dividends - (2,000) - (2,000) Balance as at 30 June 2018 30,000 195,854 8,585 234,439

Share Capital Retained earnings

Revaluation reserve Total equity

$'000 $'000 $'000 $'000

Balance as at 1 July 2016 30,000 108,741 62,573 201,314

Total Comprehensive Income for the Year, Net of Tax - 51,718 - 51,718 Increase in the value of Port land after tax - - 9,012 9,012 Adjustment to fair value for land resilience impact - - (63,000) (63,000) Dividends - (700) - (700) Balance as at 30 June 2017 30,000 159,759 8,585 198,344

-10-

Summarised Balance Sheet As at 30 June 2018

2018 2017 $'000 $'000

EQUITY 234,439 198,344

Represented by:

ASSETS Insurance Receivable 59,268 62,685 Other Current Assets 12,727 9,178 Total Current Assets 71,995 71,863

Non-current Assets Property, Plant and Equipment 126,338 118,604 Investment Properties 18,179 16,772 Intangible Assets 3,053 3,287 Investments in Joint Ventures 74,584 59,397 Total Non-current Assets 222,154 198,060

Total Assets 294,149 269,923

Less: LIABILITIES Current Liabilities Borrowings 22,040 146 Other Current Liabilities 13,660 9,014 Total Current Liabilities 35,700 9,160

Non-current Liabilities Borrowings - 36,000Other Non-Current Liabilities 24,010 26,419Total Non-Current Liabilities 24,010 62,419

TOTAL LIABILITIES 59,710 71,579

NET ASSETS 234,439 198,344

Authorised for issue for, and on behalf of, the Board of Directors

L J C Johnstone D J Benham Chairman Director 25 September 2018 25 September 2018

-11-

Summarised Cash Flow Statement For the year ended 30 June 2018

2018 2017

$'000 $'000

Net Cash Flows from Operating Activities 8,513 10,879

Cash Flows from Investing Activities Earthquake insurance progress payments received 16,895 75,066 Proceeds from Sale of Property, Plant and Equipment 229 6,696 Purchase of Property, Plant and Equipment (7,651) (22,280) Development of Investment Properties (2,707) (2,076) Acquisition of Joint Venture (7,750) - Cash Balance from acquired Joint Venture 16,758 - Earthquake capital expenditure (6,141) (2,357) Other transfers (90) - Net Cash Flows (used in) / from Investing Activities 9,543 55,049

Cash Flows from Financing Activities Repayments of borrowings (18,000) (66,000) Dividends Paid to Shareholders of the Parent (2,000) (700) Net Cash Flows (used in) / from Financing Activities (20,000) (66,700)

Net Decrease in Cash and Cash Equivalents (1,944) (772) Cash and Cash Equivalents at the Beginning of the Year 215 987 Cash and Cash Equivalents at End of Year (1,729) 215

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INDEPENDENT AUDITOR’S REPORT TO THE READERS OF CENTREPORT LIMITED’S GROUP

SUMMARY FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018

Opinion The summary consolidated financial statements of the CentrePort Limited Group (“the Group”) on pages 6 to 11, that comprise the summarised balance sheet as at 30 June 2018, the summarised statement of comprehensive income, summarised statement of changes in equity and summarised cash flow statement for the year ended on that date, and related notes, are derived from the audited consolidated financial statements of the Group for the year ended 30 June 2018.

In our opinion, the summary consolidated financial statements are consistent, in all material respects, with the audited consolidated financial statements for the year ended 30 June 2018, in accordance with FRS-43: Summary Financial Statements issued by the New Zealand Accounting Standards Board.

Summary Consolidated Financial Statements The summary consolidated financial statements do not contain all the disclosures required by New Zealand Equivalents to International Financial Reporting Standards and International Financial Reporting Standards. Reading the summary consolidated financial statements and the auditor’s report thereon, therefore, is not a substitute for reading the audited consolidated financial statements and the auditor’s report thereon.

The summary consolidated financial statements and the audited consolidated financial statements do not reflect the effects of events that occurred subsequent to the date of our auditor’s report on the audited consolidated financial statements.

The audited consolidated financial statements and our audit report thereon

We expressed an unmodified audit opinion on the audited consolidated financial statements for the year ended 30 June 2018 in our auditor’s report dated 17 September 2018. That report also includes an emphasis of matter in respect of uncertainties related to the effects of Kaikoura earthquake. Note 3 of the audited consolidated financial statements explains the material impact of the Kaikoura earthquake on the Group. This note explains and links to other disclosures in the financial statements that outline the assumptions around the insurance proceeds expected to be received, and the extent of the impairment of assets, and related tax treatment, and the significant uncertainties and judgements involved in estimating them. Note 16 of the audited consolidated financial statements also explains how the Kaikoura earthquake affected the equity accounted results of the Group’s joint ventures, including the significant uncertainties and judgements involved in estimating earthquake related costs and insurance proceeds. Our opinion was not modified in respect of this matter.

A summary of these disclosures are presented on pages 6 and 7 of the summary financial statements.

Responsibility of the Board for the summary financial statements

The Board is responsible on behalf of the Group for the preparation of the summary consolidated financial statements in accordance with FRS-43: Summary Financial Statements.

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Auditor’s responsibility

Our responsibility is to express an opinion on whether the summary consolidated financial statements are consistent, in all material respects, with the audited consolidated financial statements of the Group, based on our procedures, which were carried out in accordance with AG ISA (NZ) 810 (Revised): Engagements to Report on Summary Financial and Performance Information.

Other than in our capacity as auditor, we have no relationship with, or interests in the Group.

James Shepherd, Partner for Deloitte Limited On behalf of the Auditor-General Wellington, New Zealand 25 September 2018

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