Good result but port wary

00:00, Oct 24 2012

Port Nelson Ltd has reported a strong financial result but warns that difficult times are ahead.

The port company, jointly owned by the Nelson city and Tasman district councils, held its annual meeting yesterday and announced total earnings before interest and tax of $14.4 million on revenue of $38.8m, including investment property revaluations. This compares with $12.6m and $38.3m the previous year.

It attributed the result - $1.6m above budget - mainly to the contribution from Unimar, the marine services company in which it has a 44 per cent shareholding and which has been closely involved in the salvage of cargo from the wreck of the Rena off Tauranga.

This had also "significantly changed" Unimar's fortunes from a year ago, port company chairman Nick Patterson said in the annual report.

"It's been satisfying to see a Nelson-based company having the expertise to take a leading role in this important salvage project."

Excluding Unimar, operating earnings were $12.3m, down on last year's $12.8m.


The dividend total for the year, split evenly between the councils, was $12.2m, including $8m as a special dividend in March and an additional $1m as an interim dividend.

This brought the dividend total since the port company was formed in 1988 to nearly $122m, Mr Patterson said.

It had been a good year in the face of challenging conditions in the wider economy.

"As we head into another financial year, it is clear that 2012-13 will be a difficult one, with cargo volumes predicted to remain static and costs such as insurance and electricity continuing to rise."

Chief executive Martin Byrne said the substantial drop in log exports to China - 636,000 tonnes against 723,000 tonnes the previous year - reflected a very apparent softening of the Chinese market and the current volumes were likely to "be the reality for some time to come".

There was also a drop in ship visits, from 850 to 733, mainly attributable to the withdrawal of Strait Shipping's weekly Nelson-Wellington service and fewer export fruit carriers.

The decision of container giant Maersk to review its Nelson service had caused "considerable consternation" in June and although this was successfully resolved, Maersk's decision to withdraw its Timaru service emphasised the continual state of change in the ports industry, Mr Byrne said.

Nelson's wide and varied cargo base for shipping lines was a major point of difference from other regional ports and although continuing growth in container ship size was a concern, the company believed the port remained the logical centre of exports.