South Port's reduction in profit does not mean operating performance has deteriorated, company chairman Rex Chapman says.
Mr Chapman, speaking at the annual general meeting in Southland today, said the reduction in profit did not mean operating performance had deteriorated but in part represented the cost of providing extra resources to service a sustained lift in cargo.
The company had also absorbed increased depreciation on recent plant purchases and significantly higher charges for insurance.
In the latest year, 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 dividend policy of South Port New Zealand has resulted in a sustained lift in dividends during a five-year period.
Rather than adopting a fixed dividend payout ratio, South Port's Board maximises dividend payments by linking them to Free Cash Flow and profitability.
"Improved profitability, together with this policy has more than doubled dividends from 7.75c per share in 2007 to 20c per share in each of the last two years," Mr Chapman said.
The company's share price during the past four years has increased from $2 a share to about $3 a share, reflecting the increase in underlying profitability and dividend payments, he said.
The financial result was close to last year's record profit. South Port declared a 14.5c a share final dividend resulting in a full-year dividend of 20c a share, and representing a pay-out ratio of 88 per cent of reported net profit. The total dividend equated to a gross return of 9.4 per cent on 30 June share price of $3.05.
During the 2011 year the port operator experienced a 25 per cent volume increase in cargo, and that was a "major step up". The goal for 2012 was to consolidate on such a substantial lift and in 2012 a new record volume of 2.69 million tonnes was achieved.
This lifted net surplus to just short of $6m.
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