Red ink dries up in trading for port

18:36, Feb 26 2013

PrimePort Timaru has incurred a $10,000 trading loss in its six-month report to December 31.

This compares with first-half red ink loss of $239,000 for the previous year. The port is also forecasting a trading profit of $1.3 million for 2013.

Revenue fell $1.03 m, or 10.9 per cent, to $8.194 m, reflecting lower container volumes and a decrease in log and fish trade. Staff redundancies totalled $670,000, contributing to the loss.

The restructuring and redundancies arose after the only dedicated container service, jointly run by shipping lines Maersk and Hamburg Sud, was withdrawn.

In terms of cost, the main changes were dredging and depreciation, which fell $839,000 and $595,000 respectively from the previous year.

Reduced depreciation followed the impairment resolved late last year, and relatively low capital expenditure. Cashflows remain positive with borrowings at $1 m.


The annual total container throughput would be the lowest for many years, close to 25,000 20-foot equivalent units , PrimePort said.

Full-time staff of 35 is nearly half those employed 12 months ago.

Port chairman Roger Gower said growth in the region remained strong at 6 per cent, centred on agriculture, which not only increased export volumes but generated the need for greater imports such as fertiliser and stock feed.

"Further irrigation will come on stream this year and a number of exporters such as apples and salmon processing in South Canterbury.

"The port is handling a number of cruise ship visits this summer, which is providing a new line of business and is expected to continue; there is a direct local economic benefit as these cruise passengers are accommodated with local tours and retail activity."

Irrigation would continue to develop with the Rangitata scheme coming on line this year, he said.

However, the volatility in containers was predicted to continue as various strategies were played out.

"That will depend on the direction by major exporters, shipping lines, and whether options for larger ships or coastal shipping are taken up, " he said.

The Timaru Herald