Slight profit fall for South Port

South Port has reported a slight fall in normalised interim profit from last year after a drop in cargo volumes within a somewhat still fragile environment.

The port expects its full year result to June 30 to about match 2008 and 2009 when one time gains are removed. South Port yesterday said its 2010 first half net profit was $1.74 million, down from $2.29m in the six months to December 31, 2008.

The prior first half result included one-off gains totalling $580,000 after-tax. These gains arose from the realisation of a forestry investment, depreciation recovered on selling surplus plant and foreign exchange gains.

Net one-off gains in the first six months of the 2010 financial year were $70,000 after tax. Directors declared an unchanged fully imputed interim dividend of 4.5 cents a share payable on March 3.

Cargo volumes for the six months were 984,000 tonnes, 8 per cent down on previous interim period.

Mr Harrington said while the trading outlook for the remainder of the 2010 financial year appeared more buoyant than 12 months ago, there was still no clear economic and trading pattern for international markets.

"South Port believes it will take a further 12 to 18 months before complete confidence is restored to global markets and also considers that the New Zealand economy has still a sense of fragility.

"Nevertheless...demand for dairy, meat and forestry goods is relatively strong and should continue to underpin a steady resurgence in export activity."

Chief executive Mark O'Connor said South Port was forecasting a full year net profit of about $3.5m, down from $4.12m in the year to June 30, 2009. But when the $600,000 of one-off gains for the June 2009 were taken out the results would be very similar.

Mr O'Connor said there were indications that a higher level of fertiliser application will occur in the autumn, which would help imports. Yet a strong New Zealand dollar has prolonged the difficulties being experienced by export industries such as fishing and manufactured goods.

The company was looking to consolidate its cargo volumes after a weekly service had been introduced by the Mediterranean Shipping Co over the last 20 months.

There should be extra demand by South Port's largest customer by volume, New Zealand Aluminium Smelters which had reinstated the production capacity which was unavailable for several months due to a transformer failure.

In the dairy sector South Port was working with Fonterra management to establish future cool and dry warehousing requirements for product that had historically been stored at Bluff. The port was also looking at cargo opportunities surrounding New Zealand logs destined for China, oil and gas exploration and Solid Energy's plans.

- © Fairfax NZ News

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