South Port posts 12.3% loss; affirms full year guidance

By Hannah Lynch

Feb. 9 (BusinessDesk) – South Port New Zealand, which operates the nation’s southern-most port at Bluff, posted a 12.3 percent decline in first half profit, while affirming its guidance for full year earnings.

Profit fell to $2.5 million in the six months ended Dec. 31, from $2.9 million a year earlier. Sales rose 6 percent to $12.4 million from $11.7 million.

A 25 percent increase in bulk cargo volumes, including fertiliser, stock foods and woodchips widened employees and infrastructure costs, Chairman Rex Chapman said in a statement to the NZX.

“The bottom line in the opening half-year reflected the cost of establishing appropriate resources to handle a sustained lift in base cargo,” Chapman said. “This on-going activity gain can only be sustained with additional personnel, plant and infrastructure and that comes at a cost.”

The port affirmed its full year earning guidance expected to be in the range of $5 million to $5.3 million, according to its annual report in September.

“This factored together with stable short to medium term cargo indications should enable the company to deliver a full year operating profit consistent with the range signaled at the time of generating its 2011 annual report,” Chapman said.

Earnings per share were 9.7 cents compared with, 11.1 cents in the same period last year. The company will pay an interim dividend of 5.5 cents per share, partially imputed.

In August, the Port spent $6.3 million on new cargo-handling facilities in the largest commitment of capital spending since it was formed in 1988, increasing its debt ratio to 28 percent from 17 percent in the same period a year earlier.

However, it warned of a tough year ahead for its customers, which include the Rio Tinto aluminium smelter and forestry exporters.

“For a number of South Port’s customers it will be a matter of bracing themselves for the bumpy road that lies ahead,” said Chapman, citing the likely impact of a weak Eurozone on key Asian markets.

While container ship route rationalisation continued, the port plans to include a new route to the Americas using the MSC line, owners of the container ship Rena, which ran aground off the Port of Tauranga in October.

Shares in South Port are currently trading steady at $3.50.

(BusinessDesk)

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