South Port annual profit slips 3% but beating guidance

Freight volumes match 2016 record.

South Port New Zealand posted a 3% decline in annual profit, beating guidance, as the Bluff maritime hub operator matched record freight volumes set a year earlier.

Net profit fell to $8.4 million, or 32.2c per share, in the 12 months ended June 30, from $8.7 million, or 33.2c, a year earlier, the Bluff-based company said in a statement. Revenue increased 0.4% to $36.9 million as the hub repeated its 2016 record freight volume of 3.05 million tonnes handled and boosted container throughput to a record 39,300 TEUs (twenty-foot equivalent units) from 35,100 TEUs.

South Port had warned profit would be lower than the record result in 2016 due to increased spending on repairs and maintenance, forecasting earnings of between $7.75 million and $8 million.

"Main cargo flows are expected to show modest upside in the 2018 financial year while the improving profitability of the dairy sector should assist the region," chairman Rex Chapman said. "2018 financial year earnings are likely to remain stable and in that context, South Port directors would look to maintain the current level of dividend payment."

The board declared a final dividend of 18.5c per share, payable on November 7 with an October 27 record date. That takes the annual return to 26c, unchanged from a year earlier. The shares, of which the Southland Regional Council owns two-thirds, last traded at $5.85 and have gained 6.6% so far this year.

Chief executive Mark O'Connor, who departs in October, said bulk cargo was still the backbone of the business with forestry, aluminium, fertiliser, petroleum and other agricultural products showing growth or stability.

"Exports of forestry products have climbed and now represent almost 30% of the business throughput," Mr O'Connor said. "This cargo flow was made possible by a range of important export customers, the largest of which is Rayonier/Matariki forests."