Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Port of Tauranga lauded for remarkable performance

Ports of Tauranga applauded for ‘remarkable’ performance during global downturn

By Peter Kerr

0ct. 20 (BusinessWire) - Port of Tauranga Ltd. has done a remarkable job of maintaining profitability against the tumultuous backdrop of the global economy said Morningstar research unit, AspectHuntley.

Shares of the port company edged up 0.7% to $7.25, nudging the $7.26 record it reached in mid-2007. The shares have climbed 49% from their low in March. AspectHuntley commenced coverage of the port company with a ‘hold’ rating, saying the stock is fairly priced given its rally.

Net profit rose 7.3% to $45 million, boosted by a lower corporate tax rate, while the company generated $27 million free cash last year. As the largest New Zealand port by trade volumes, POT's June 2009 revenues were $130 million, versus $138 million in 2008. Total trade for the year was down 5% to 13.5m tonnes, primarily blamed on imports being down 11% to 5m tonnes.

Most of this drop was due to a double digit decline in fertiliser imports, and a 6% fall in oil imports.

However, log exports grew 27%, with dairy exports up 24%, with bulk cargo accounting for 60% of trade, containers the rest. Logs make up 37% of POT's export volumes, and on the back of sustained Chinese demand port management is starting to plan infrastructure that can handle annual log volumes of over 5mt over the medium term.

The AspectHuntley report said POT's Metroport containerised cargo marshalling business in South Auckland is the fourth largest container terminal in NZ, accounting for 25% of POT's total containers handled.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

A merger between POT and Ports of Auckland could make sense, though at this stage "on all metrics, whether it be profitability, balance sheet strength or return on capital, POT is far superior to POA," the report said.

"The advantage POT has over POA is that it is capable of handling larger ships with lower capital investment. POA would have to spend north of $200 million to have the same capabilities."

A merger could stop overinvestment in cranes and dredging. POA is mainly a container port with annual container volumes of over 800,000 twenty foot equivalent (TEU) movements a year.

POT handles bulk as well as container ships, and "the merged company will be able to extract significant cost savings," the report said.

"As one of Australasia's most productive and efficient ports, its strong balance sheet and sizeable land bank, POT is well placed to grow its container and bulk business," the report said.

"However, a high NZ$ and an uncertain global economic outlook might impact volumes in the near to medium future. At the right price the stock will suit long-term investors with a modest appetite for risk."

(BusinessWire)

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.