Port of Tauranga lifts profit

Thursday 20th August 2009

Port of Tauranga, New Zealand’s biggest port company, posted a 7% gain in full-year profit as lower finance costs and increased returns from Northport made up for the impact of reduced volumes.

Net profit rose to $45.2 million, or 33.7 cents a share in the 12 months ended June 30, from $42.1 million, or 31.4 cents a year earlier, the company said in a statement. Operating revenue fell 3.5% to $143.6 million.

Total trade across Tauranga’s wharves slipped 0.5% to 13.5 million tonnes, led by a decline in processed forestry exports and a drop in kiwifruit shipments. Imports of oil, grain and fertilizer ingredients all fell, underlining the impact of the worst economic downturn in 30 years. Container volumes fell 6% to 546,521 TEUs.

“The financial market collapse caused a commodity boom to turn to bust and for Port of Tauranga, meant considerable change to trading patterns with overcapacity, especially in container shipping,” said chairman John Parker.

The company will pay a final dividend of 18 cents a share, bringing the annual payment to 27 cents, up from 25 cents a year earlier. The shares rose 0.8% to $6.55 and have climbed 8% in the past month.

The contribution from associate companies jumped 20% to $5.1 million, mainly reflecting its share of profit from Northport. Operating expenses fell to $77 million from $81.9 million.

Parker said the port’s balance sheet remains “very strong,” with a debt/debt plus equity ratio of 29.4%The port had renegotiated its bank facilities “at very favourable rates” prior to the credit crisis and is now in talks with bankers to secure new debt facilities to start June 30 next year.

Parker said New Zealand has a difficult terrain with a small population, which inevitably drives up the cost of its internal transport infrastructure. That meant the nation needed to prioritise investments on “economically important routes.”

“Ports are a critical part of the transport infrastructure, and especially so given the high volume of New Zealand’s imports and exports per capita, our distance from markets and the fact that our major exports are relatively low value per unit of weight,” he said.

“Port efficiency and the contribution to or burden they impose on infrastructure – be it internal to New Zealand or shipping costs – is important,” he said. That makes port rationalisation important and with the arrival of larger ships “a port hierarchy must develop where other ports feed in cargoes to the two primary ports by road, rail and sea.”

“If port owners don’t move, falling revenues and market forces will dictate change,” he said “The recent move by Fonterra to start consolidating their exports on fewer ports is part of that process."

Businesswire.co.nz

Comments from our readers

No comments yet