Port of Tauranga keeps profit stable as volumes slump

Port of Tauranga is not immune to the drop in volumes passing through the rest of the country’s ports, but has managed to maintain its profit level.

The listed port company today announced a 2% lift in net profit to a record $23.1 million for the last six months of 2009, even though tonnage through the port fell 5% to 6.5 million tonnes.

Overall container volumes slumped by 18%, wiping out a 10% gain in exports led by a 31% lift in log exports and a 44% rise for dairy.

The solid profit has seen the port maintain the interim dividend payment at nine cents per share.

Port of Tauranga chairman John Parker said despite an “extremely challenging” year for the business that saw a 9% reduction in revenue, it recorded an increase in earnings largely through cost reductions.

Chief executive Mark Cairns said the short-term future of the entire container market remained volatile, with about 10% of the global container capacity sitting idle.

“It is difficult to accurately forecast the remaining half of this financial year, but we anticipate a gradual improvement in economic growth and at this stage we maintain our previous guidance of achieving a full year earnings result similar to last year’s, which was a record.”

The company has positioned itself for the future by lodging resource consent applications to dredge harbour channels to cater for the next generation vessels, with a consent hearing scheduled for next month.

If consent is granted, the port said it would be the only New Zealand port capable of providing 14.5 metre draught at low tide.

The company noted that net borrowings at the end of 2009 were $206.3 million, with a debt to debt plus equity of 29%, and an interest cover of 6.2 times.

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