Port of Tauranga sees annual earnings growth up to 6.1%

Port of Tauranga [NZX: POT], the country's biggest coastal export hub, sees annual earnings growth of up to 6.1 percent and expects to finish plans to enable big ships to dock at its wharves over the coming year.

The port operator forecasts annual profit of between $78 million and $83 million in the year ending June 30, 2015, compared to earnings of $78.2 million in 2014, chief executive Mark Cairns told shareholders in Tauranga today. The company anticipates spending another $50 million dredging the harbour to complete its programme to allow larger vessels to berth, which it expects will help boost container volumes to 1 million twenty-foot equivalent units by 2017 from last year's 760,000 TEUs.

"We consider that our relative competitive advantages are strengthening," Cairns said. "We reckon we have a first class asset, unrivaled capacity for future growth with our strategic land holdings of 190 hectares and excellent road and rail connections."

The port has ramped up its push to be the pre-eminent hub in New Zealand, taking a 50 percent stake in PrimePort Timaru, developing a new freight hub south of Christchurch and inking the deal with Fonterra Cooperative Group and Silver Fern Farms-led logistics company Kotahi, which in turn made a 10-year commitment to ship containers with Maersk. Tauranga says the benefit amounts to 1.8 million export TEUs - 20 foot equivalent shipping containers - over 10 years.

Cairns said the company's first quarter group profit was down 3 percent from the same period a year earlier, due to higher interest and depreciation expenses from the capital expenditure programme, though earnings before interest, tax, depreciation and amortisation was up 3 percent. Container numbers were up 14 percent from a year earlier, and dairy exports rose 23 percent by volume, while log exports were down 14 percent, he said.

The company expects the Kotahi deal will deliver against contracted volume commitments, with milk production running 4 percent ahead of last year, Cairns said.

The company's shares rose 0.4 percent to $16.16, and have gained 17 percent this year.

(BusinessDesk)