PrimePort Timaru profits jump to $3.9 million
PrimePort Timaru says new partnerships, new staff and increased port traffic all contributed to its best financial result since 1989.
The company announced on Thursday operational profits rose 90.6 per cent to $3,991,000 for the year ended June 30, up from $2,093,000 in 2014.
Chief executive Phil Melhopt said profits were buoyed by a new arrangement where PrimePort leases container operations to Timaru Container Terminal Limited, which is owned by freight management partnership Kotahi and PrimePort shareholder Port of Tauranga.
"The operational costs savings through not operating the terminal directly have had a significant influence on this year's results," Melhopt said.
Operational expenses dropped from $14 million to $11m. Increased repairs and maintenance spending partially offset the savings from divesting the container operations.
Reconstruction of the port's number two wharf in support of cement company Holcim's new facilities caused payments for fixed assets to jump from $0.8m to $13.9m.
PrimePort expects the reconstruction project to cost $25m in total.
The container terminal also bought a Lieberr 550 mobile harbour crane. Melhopt said the crane was in a workshop, but its problems were "nothing that can't be sorted".
Lease income from the container terminal also contributed to PrimePort's revenues. Operational revenues rose 3.6 per cent to $13.1m.
PrimePort chairman Roger Gower said the volume of containers passing through the port had rebounded to previous highs.
"We are able to concentrate on building the bulk trades through the port."
A Timaru District Holdings Limited report suggests revenue from fertiliser, palm kernel, fuel and other bulk trades grew consistently.
The Timaru District Council-owned holding company owns 50 per cent of PrimePort.
PrimePort's after tax profit totalled $3,155,000, rising 67.2 per cent from $1,887,000 in 2014.
Although Melhopt said PrimePort's board was still considering the dividend it would pay, he expected it would "reflect the improved operating result of the port".
PrimePort paid TDHL and Port of Tauranga each a $300,000 dividend in 2014.
Although log exports dropped 36 per cent from a 2014 high of 450,000 tonnes, Melhopt said storm damage in 2013 forced unplanned forest harvests and caused the earlier peak.
Melhopt, who replaced former chief executive Jeremy Boys in December, said several other new staff and existing employees played an integral role in the results.
Melhopt said the company felt "very confident" about its medium to long-term prospects despite dairy producers' present challenges.
Gower said PrimePort's partnership with Port of Tauranga would allow for significant cost savings for South Island importers and exporters when larger vessels arrived there.
After tax profit: $3.15m (+67.2pc)
Revenue: $13.1m (+3.6pc)
Ships: 442 (+18pc)
Non-containerised cargo: 1.3m tonnes (+2pc)