Port of Tauranga profit sinks
Port of Tauranga investors appear to be shrugging off a 30 per cent drop in the company's full-year profit.
The country's biggest port company by cargo volumes has posted a profit after tax of $78.25 million for the year to June 30, down from $112.1m in the previous year.
However, that year's profit was boosted by a $34.9m gain from the sale of the port's stake in associated company C3.
Port of Tauranga shares jumped 25 cents to $15.55 in early-afternoon trading, not far from their peak of $15.85 last month.
Craigs Investment Partners' head of private wealth, Mark Lister, said that once the gains were stripped out, the port's profit had improved by 1.3 per cent.
''I don't think anyone will be upset with the performance," he said.
"It's another good result. It's only up 1.3 per cent but it's still a record result, and they've managed to grow their bottom-line number every year for as long as I can remember."
The company declared a dividend of 29c a share, lifting the total dividend to 50c a share, an increase of 4c a share.
Chief executive Mark Cairns said the company was positioning itself for the long term with strategic investments at Timaru's port and at a site near Christchurch for an inland hub, in addition to its alliance with logistic firm Kotahi.
The extra container traffic that the Kotahi deal would bring meant the port could afford to invest in infrastructure that would bring in bigger ships, including a $50m dredging programme.
Lister said most investors would be happy that the port had the cashflow to make the big investments that were looming.
''There's plenty of growth opportunities for the next five to 10 years and there's always execution risk when you're spending big amounts of money on growth, but Port of Tauranga have always been able to deliver on what they say they'll do."
He said that if there was a risk it was in the port's strong log exports.
Total exports rose 2 per cent on the back of higher dairy and forestry exports, but both commodities were seeing world prices coming off the boil.
Total trade volumes were up 3.5 per cent to 19.7 million tonnes and imports rose 6.4 per cent to nearly 6.4 million tonnes.
Meanwhile, the port's biggest rival, Ports of Auckland, also put out a strong annual result.
The council-owned company produced a net profit of $74m, up 90 per cent, showing a good recovery from its industrial action two years ago.
Lister said Ports of Auckland's result was off a low base, whereas Tauranga had had a much less volatile history.
Marcus Curley, an analyst with JB Were, said Auckland's container volumes continued to recover and it was making stronger margins on the strength of its location and better productivity.
"Tauranga, you saw the drop-off in containers as the share moved back to Auckland, substituted by some strong outcomes in logs." In the longer term, he said, Tauranga's strategy would lead to more growth in container volumes, thanks to an agreement with shipping company Maersk, while Auckland's would decline.
Both ports had different strategies and both could succeed, he said.