South Port posts record annual profit as stock food, logs drive cargo

South Port New Zealand chairman Rex Chapman
South Port New Zealand 12-month price history (NZX.com)

South Port New Zealand [NZX: SPN], the Bluff port operator, lifted annual profit 2.7 percent to a record as increased volumes of stock food and logs drove cargo growth.

Net profit rose to $6.68 million, or 25.5 cents per share, in the 12 months ended June 30 from $6.5 million, or 24.8 cents a year earlier, the Bluff-based company said in a statement. Trading revenue rose 6.7 percent to $31.3 million on a record 2.72 million tonnes of cargo going through the port. Imported stock food volume was twice the 2013 level, while log exports were at a record 390,000 tonnes, it said.

South Port anticipates similar cargo levels in 2015, though forecasts a "slightly lower" annual profit in the 2015 financial year as global demand for dairy and forestry goods comes off the boil.

"South Port and its customers operating in these sectors are taking a more conservative view of projected activity for the coming season," chairman Rex Chapman said. "This forecast takes into account both anticipated challenging conditions in certain sectors and the impact of investing in new container handling infrastructure which will require a number of years of container growth to generate an appropriate financial return."

The board declared a final dividend of 16 cents per share, payable on Nov. 10 with a Oct. 28 record date. That takes the annual return to 22 cents per share, unchanged from a year earlier.

The shares were unchanged at $3.45, and have gained 9.9 percent this year.

South Port said tonnage from the New Zealand Aluminium Smelters' Tiwai Point plant were steady, and it will have to make "key decisions" in the next 18 months on the implications of securing a smaller parcel of electricity from Meridian Energy.

Chapman said the recent partnership between Fonterra Co-operative Group [NZX: FCG] and Silver Fern Farms-led logistics company Kotahi and Port of Tauranga [NZX: POT] "will send ripples out into the NZ market" and it was unclear whether it will reduce competition and capacity.

"South Port maintains the view that market forces will ultimately dictate what level of service capacity and frequency is required by NZ exporters and importers," he said.

Last week, Tauranga's main rival Ports of Auckland announced plans team up with Napier Port and logistics group Icepak to build an inland port and freight hub in Palmerston North in a bid to make a cheaper freight distribution network.

(BusinessDesk)

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