South Port reports reduced profit

20:51, Feb 13 2014

South Port New Zealand's increased cargo volumes has failed to offset lower warehousing returns in its latest half-year.

The listed Bluff port yesterday announced that its interim net profit had fallen 7.6 per cent to $2.68 million, from the same 2012 December period.

The interim payout has fallen from 6.5c to 6c a share, payable on March 11.South Port chairman Rex Chapman said the result was encouraging, after the national freight market export off-season was quieter than normal in the September quarter.

In contrast to the 2012 half where tonnages declined, cargo volumes rose 101,000 tonnes, or 8 per cent, to 1.369m tonnes.

Chief executive Mark O Connor said the lift in cargo was driven mainly by strong fertiliser and stockfood imports plus increasing log exports. Notable declines occurred in dairy products, New Zealand Aluminium Smelters import cargo and sawn timber, he said.

While the 195,000 tonnes of logs exported through the port was a record for the 6 months, other parts of the forestry sector continued to encounter difficult markets.

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Fertiliser tonnages continued to be buoyant and supplementary stock food also demonstrated growth as a consequence of farmers adopting new feeding systems.

The Tiwai Pt aluminium smelter was a significant cargo generator at Bluff and continued to grapple with declining aluminium prices, he said. It was still working at less than full capacity, but had signalled that potential existed to reinstate the fourth potline later in 2014, provided it is economically viable.

South Port was working with its major container shipping line customer MSC on a review of the Bluff port infrastructure that would be necessary to service projected cargo growth in the region.

South Port was also working with Open Country Dairy to deliver an enlarged warehousing solution in order to cater for a planned lift in dairy output.

South Port and key regional groups continued to interact with oil and gas exploration companies interested in the Great South Basin.

Mr Chapman said the second half of 2014 should provide consistent cargo volumes across most sectors. However, the more rapid flow of meat, fish and dairy product to market had caused reduced warehousing margins for the company's cold storage division.

South Port forecasts annual earnings of between $5.8m to $6m, compared with 2013's $5.99m.

South Port's shares last traded at $3.50.

 

The Southland Times