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BUSINESSDESK: Port of Tauranga, whose shares rose to an all-time high this week, posted a 26% gain in full-year profit to a record and predicted more earnings growth in 2013 on rising volumes of freight.
Profit was $73.5 million, or 54.8 cents a share, in the 12 months ended June 30, from $58.4 million, or 43.6 cents a year earlier, the Tauranga-based company says.
Sales climbed 23% to $227.2 million. That beat the consensus of analyst estimates of $71.5 million profit and sales of $221.7 million.
Shares have almost doubled in the past two years as the nation's biggest port stepped up its competition with Ports of Auckland, taking freight from the city by rail via its MetroPort facility in south Auckland and benefiting from strikes that saw it win business from its rival.
The shares were unchanged at $12.25 when the market opened today.
In the latest year, Tauranga's container volumes rose 35% to 796,024 TEUs, trade volumes were up 20% to 18.5 million tonnes, logs rose 11% to 4.9 million tonnes and dairy soared 126% to 1.33 million tonnes.
The company says freight traffic diverted from Ports of Auckland as a result of industrial action made up "less than a third" of the increase in container volumes in the latest year.
Its performance has made it the envy of Auckland, which cites Tauranga's labour practices and productivity as benchmarks it strives for.
"The global economic outlook remains uncertain," chief executive Mark Cairns says.
"However, we believe earnings growth for the company will continue, based on the soundness of our diversification strategy and our continued investment in infrastructure to provide the capacity to accommodate anticipated future cargo growth."
In the first month of the new financial year, container and log export volumes are up on the same time last year, he says. The company will give an update at its annual meeting on October 25.
Much of the increase in container volumes reflected the arrival of seven new shipping services to Tauranga in the latest year, which contributed more than 200,000 TEUs to the total volume handled.
Containers handled through MetroPort rose 33% to 183,000 TEUs.
Port of Tauranga will pay a final dividend of 27 cents a share, making 39 cents for the year, up 26% from 2011.
The stock is currently rated a "hold" based on the consensus of seven recommendations compiled by Reuters, with a price target of $10.90. It is trading at 24.7 times per-share earnings.
Helping lift profit was a 7% gain in earnings from six associate companies.
Port of Tauranga is awaiting the outcome of an Environment Court hearing into consents to dredge its harbour to accommodate the next generation of bigger ships, up to 8000-equivalent TEU vessels. The decision is expected in October, it said today.
"We are now more confident that the $180 million capital expenditure programme over the next three years, expanding the port infrastructure, will prepare Port of Tauranga for the next period of growth," Mr Cairns says.