Port of Tauranga happy with profit
Port of Tauranga has spent six months gearing up for growth and is satisfied with its flat underlying profit for the six months to December 31.
The NZX-listed port reported a 47 per cent drop in net profit of $39.3 million for the half-year compared with the same period a year ago which was boosted by the sale of its cargo handling business.
The $74.2m profit for the comparable half-year in 2012 included a $35.3m gain on the sale of the port's stake in cargo handling group C3. Allowing for that one-off transaction, the underlying profit for that period was $39.2m.
Operating revenue in the latest half-year was up 15.7 per cent to $137.1m, and operating costs increased 20.1 per cent to $70.4m for the period.
Port of Tauranga chief executive Mark Cairns said it was a "solid result".
However, the first half was more about gearing up for what was going to happen during the next three to five years, he said.
The $250m project to widen and deepen the shipping channels in Tauranga Harbour for larger ships was in the final planning stages, with work expected to start next financial year.
And last year the port bought a 50 per cent stake in PrimePort Timaru and took over its container terminal operations.
Port of Tauranga had also expanded its Auckland operations, bought new tug boats and cranes, purchased a transport logistics company, and was developing a freight hub in Rolleston, southwest of Christchurch.
Cairns said there was a risk of the port pre-emptively pouring too much money into expansion before economic growth really took off, but judging by overall trade volumes, Port of Tauranga was on track to continue to grow.
"We've been responding to what our major exporters have been asking for for the past four years," he said.
Trade volumes were expected to improve during the second half and provided there were no significant market changes, the company expected to achieve a full-year profit for the year to June 30 of between $77m and $81m.
Shareholders would be paid a half-year dividend of 21 cents per share on March 21, up 5 per cent.
Cairns said the company had held on to the increased business won during Ports of Auckland's waterfront industrial dispute in 2011 fro longer than expected.
Ports of Auckland's trade volume was about 3 per cent higher than in 2011 before it was hit by industrial action from wharf workers, he said, while Port of Tauranga's volumes were about 35 per cent above where they were in 2011.
Despite the loss of Maersk's Southern Star service to Auckland Port of Tauranga was happy with its progress, he said.
Cairns said ports were often a good "bellwether" of the economy and judging by the increase in export cargo, the economy was on track to continue to grow.
Total imports and exports for the six months rose 4.1 per cent and 6.6 per cent respectively.
Overall trade volumes rose 5.8 per cent to 9.9 million tonnes during the six months.
However, container-handling volumes dropped 11.8 per cent due to a 17.5 per cent fall in dairy exports compared to a year earlier.
Port of Tauranga's shares were down 6c, or 0.4 per cent, at $13.79 this afternoon.