South Port net profit flat, volumes up

02:28, Nov 01 2012

South Port is forecasting a 2013 bottom line result in line with a 2012 net profit of nearly $6 million.

In August the Bluff-based port company reported an annual net profit of $5.99m, slightly lower than the 2011 result of $6.26m.

South Port chairman Rex Chapman today told shareholders a flat trading period might continue in the short-to-medium term as there was still a flow on effect from uncertainty in the United States and European markets.

Primary industries would be the on-going key area for both the port and the region.

In the June 2012 year, South Port's reported profit was influenced by extraordinary items or one-off adjustments such as the one-off gain of $270,000 on the sale of a surplus mobile harbour crane. Normalised profit was $5.72m compared with $5.98m in 2011.

The reduction in profit did not mean operating performance had deteriorated but in part represented the cost of providing additional resources to service a sustained lift in cargo.

In 2012, a new record volume of 2.69 million tonnes was achieved.

The company also absorbed increased depreciation on recent plant purchases and significantly higher charges for insurance.

South Port declared a 14.5 cents per share final dividend resulting in a full year dividend of 20 cents per share, representing a pay-out ratio of 88 per cent of reported net profit.

The port company was pursuing a strategy of acquiring non-port businesses, preferably with links to the cargo business. Blue Sky Meats has become a cold storage customer and the business of Southland Cool Stores was acquired in September.

South Port was building a 5900 square metre dry warehouse on its island harbour. This would be available in March 2013.

Chief executive Mark O'Connor said there were substantial variances in cargo flows during 2012, with wood chip volume up 42 per cent, stock food up 114 per cent, petroleum up 20 per cent and sawn timber up 13 per cent.

On the other hand, the logs trade was down 28 per cent and alumina volume fell 8 per cent.

New Zealand Aluminium Smelters-based imports comprised 32 per cent of the 2012 year cargo by volume and the aluminium smelter's exports represented 11 per cent of the cargo mix.

"Overall, however, cargo volumes had risen 45% over the last three years. To meet this increase in business, South Port had invested in a modern mobile harbour crane and in infrastructure such as large forklifts and a reach stacker, and upgraded berth paving," O'Connor said.

Cold storage capacity was now 8700 tonnes on Island Harbour and 7700 tonnes at the South Port Foreshore Road facility.

Chapman said that calls for port rationalisation had become more muted than previously and South Port was not aware of any catalyst that was likely to stimulate developments.

The company's share price over the past four years had increased from $2 per share to around $3 a share, reflecting the increase in underlying profitability and dividend payments, Chapman said.

South Port shares were 14c higher at $3.30 in afternoon trade.


The Press