UPDATE: Port of Tauranga 1H profit rises on volume gains, C3 sale, retains FY guidance
(Adds comment from chief executive Mark Cairns, spells out change to dividend policy)
Feb. 21 (BusinessDesk) – Port of Tauranga posted record first-half earnings on increased volumes export volumes of dairy products, meat and logs and affirmed its full-year guidance.
Net profit rose to $74.2 million in the six months ended Dec. 31 from $34.6 million a year earlier, reflecting a 12 percent gain in sales to $188.6 million and a one-time gain of $35 million from the of its half-share in stevedoring firm C3, the company said in a statement.
Excluding C3, profit rose 13 percent to $39.6 million, about matching a forecast from brokerage Forsyth Barr. The shares climbed 1.4 percent to $14, matching the record high set earlier this month. The company will pay an interim dividend of 20 cents a share, up from 12 cents a year earlier, after changing the percentage of its annual payments paid in the first half to 45 percent from about 33 percent.
The Tauranga-based port, which is 55 percent-owned by Bay of Plenty Regional Council, has benefited from industrial strife at rival Ports of Auckland, which has seen freight diverted south and spurred shipping lines to switch, allowing the company to give itself the title of “pre-eminent national freight gateway.”
Auckland’s misfortune helped Tauranga lift the volume of export dairy products by 87 percent to 935,000 as it received all of Fonterra Cooperative Group’s volume from the upper North Island. Meat exports rose 31 percent to 184,000 tonnes and log volumes gained 14 percent to 2.6 million tonnes.
Container volumes rose 26 percent to 431,840 twenty foot equivalent units.
Port of Tauranga’s MetroPort hub in south Auckland, which connects by rail with its main facility in the east coast city, lifted volumes by 26 percent to 101,440 TEUs.
Total trade volume growth of 10 percent to 9.4 million tonnes was driven by exports, which jumped 16 percent to 6.4 million tonnes, while import volumes held steady at about 3 million tonnes.
Chief executive Mark Cairns said his company has kept the majority of the volumes it won off strike-bound Auckland, with about 5 percent having flowed back to Ports of Auckland.
The Auckland port and the Maritime Union have indicated they are close to settling their 18-month dispute.
The company is embarked on a three-year, $170 million programme to expand its container terminal, increase berthage, add a sixth gantry crane and dredge its shipping channel. Cairns said he is hopeful the company will gain resource consents for the dredging in the next few weeks.
The bulk of its sales gains came from port operations, where revenue rose to 14 percent to $96 million. Property services revenue rose 3 percent to $9.87 million and transport services rose to $1.2 million from $704,000.Operating expenses rose to $58.6 million from $51.8 million.
The company reiterated its full-year forecast of underlying profit of $75 million to $$79 million, up from $73.5 million last year.
It said log volumes are expected to continue growing on demand from China and it sees growth in container volumes.