Forum Archive Index - October 2000

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

>
> Are containers
> important to all ports or is there some variation?  
>
> LPC is a bit of
> an enigma isn't it - the lowest PE and the highest price to NTA.
>

Possibly the low asset base is because it is periodically asset 
stripped (via special dividends) by the Christchurch City Council 
which holds 65.6% of the shares.

And maybe the low P/E is a reflection of the Solid Energy Coal deal 
which makes up some 25% of the company's turnover and is up for 
renegotiation at the moment.

>
> I'm
> tempted to make this my second choice after POA. I'm still hoping
> that some more serious analysis might come in on this subject. 
>
> The three most important figures to
> me are EPS, dividends, and return on shareholder funds. I have these
> figures for the 2000 year from POA which are  32.3c   18c   and 
> 18%. Can anyone help with the figures for the other listed ports (I
> can get the prior years from the Investment Year Books) and any
> comments? 
> 
For the port of Lyttelton (LPC) the equivalent figures for year 
2000 (ended 30th June) are:

EPS: 14.6c
Final Dividend: 6.75cps plus special dividend 10cps, Paid 22/09/2000
Interim Dividend: 3.75cps declared 31/12/2000

Policy is to pay a minimum of 50% of earnings as dividends.

At balance date the shareholders equity was $32.994 million.  I can't 
find any info on the net on the total liabilities of the company, so 
am unable to give you a net asset value, so cannot calculate the 
return on the net assets.

Perhaps a reader who holds shares in the company might look it up for 
us?  Couldn't see info at http://www.lpc.co.nz.

Total trade in TEU (tonne equivalent units) was up 5% last year.

Made up of:  Coal Trade +30%,  Imported Vehicles +22%, Container 
trade up 9%, Bulk Fuel up 7%.   I note that since all of those 
figures are greater than the average increase of 5% some part of the 
trade must have increased less than 5% to make up the 5% average 
increase.  I wonder what that was?

Could it be that 'conventional' cargo has reduced dramatically?  
Even apples are going out in containers there days.

There is some concern the company might face action over forcing the 
recreational boaties out of the inner harbour, where most of 
their craft were subsequently destroyed in the worst storm in 
Canterbury in 25 years.  But I would bet on the Christchurch 
City Council facilitating a fix now, letting LPC off the hook.

The other 'stormy seas' factor in this company is that up until this 
year it wasn't earning enough money to, over time,  to replace its 
infrastructure.  This would cost $130m to rebuild in one hit.   Some 
dollar expenditure will be necessary so that the wharf facilities 
can be extended to cater for the new P&O Nedloyd Supercontainer 
vessels.

The required new container crane will cost $10million and 'several 
million' (quoting the company chairman) would be needed for more 
straddle carriers. and longer wharf length.  Let's say $20million all 
up as an educated guess that has to be spent over the next two years.

Given that the productivity gains of recent years have come from 
working the existing equipment harder (no major capital expenditure 
required), I wouldn't be looking to an increase in the dividend 
rate of 10.5cps for the next two years at least. 

Now it must be time for someone who lives in Tauranga to give us the 
good oil on POT.   All the best with the research Dick.  SNOOPY

Disc: Do not hold LPC, but thinking about it!

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