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Audits & Ratings: Hueneme, San Diego

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FY 2013 was a banner year for the Port of Hueneme, with gross operating revenues jumping 12 percent from FY 2012 to a record $13.7 million. Fitch Ratings and Standard & Poor's have each assigned an A+ rating to $19.3 million of refunding revenue bonds to be issued this month by the San Diego Unified Port District.

Hueneme Port Audit: Strong 2013 Financial Year Results, Revenue Up 12%

FY 2013 was a banner year for the Port of Hueneme, with gross operating revenues jumping 12 percent from FY 2012 to a record $13.7 million, according to an audited report submitted to the harbor commissioners at their meeting of October 28. July/June is the port’s fiscal year.

Underpinning the revenue gains was an 8.5 percent increase in cargo to a historic high of 1,438,596 metric tons, thanks in major part to strong gains by the port’s key fresh fruit and vegetable business, including bananas, and by shipments of fertilizer and "environmental solution products."

The audit shows the port ended the year with net income before capital contributions of $682,500, up from $221,300 in FY 2012. Overall total revenues rose by $1.5 million, while expenses increased by $1.02 million – primarily due to higher insurance costs and new accounting requirements. The port’s net assets grew by $7.2 million from $4.2 million.   

The port utilizes a monthly financial reporting system to monitor and maintain operating expenses versus current budget and prior year actual results to maintain expenses at the lowest possible levels.  

In FY 2012, the port refunded its entire outstanding revenue bond debt to take advantage of lower interest rates within the public bond market. That action allowed the port to realize a $2.7 million saving over the remaining term of the port’s entire outstanding debt which fully matures in 2024. 

The port’s capital outlay for FY 2013 amounted to $8.3 million, including: 
  • $ 3.1 million – Shoreside Power 
  • $ 2.0 million – Port Security (grant funded)
  • $ 2.8 million – Joint Operating Security Centers
  • $ 0.4 million – Facility Upgrades and Maintenance
The port has budgeted $12.2 million for its FY 2014 capital outlay program, 55.1 percent will be covered from the port’s general fund and the balance by revenue bonds (8.1 percent) and state and federal grants (36.7 percent).  

"We are proud of our record and most pleased to see the uptick in revenues, but recognize we are faced with climbing expenses and have challenges ahead," said Port CEO Kristen Decas. "The increases in revenue at this time are vital to replenishing our working capital reserves that have been depleted from the investment in major capital projects, including the installation of shoreside power. We commit to remaining vigilant in our effort to watch expenses and balance the budget."

The port’s comprehensive annual financial report is in final draft and will be available online at www.portofhueneme.org.   

San Diego Earns A+ Credit Ratings

Fitch Ratings and Standard & Poor's have each assigned an A+ rating to $19.3 million of refunding revenue bonds to be issued this month by the San Diego Unified Port District.

In addition, both agencies affirmed the A+ rating on approximately $39.2 million in outstanding port district revenue bonds issued in 2004.

The rating outlook on all bonds is "stable," which is an improvement from the previous outlook of "negative" by Standard & Poor's. Fitch based its rating on the port district's diverse maritime and real estate assets and specifically its real estate holdings in prime tourism/business areas of the city and two niche marine terminals primarily focused on break bulk cargo services.

Revenue performance declined during the recession, but moderate growth has been seen in recent years and is forecast to continue going forward, according to the Fitch Ratings report.
 

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