Port Nelson reports strong year despite recession
Port Nelson reports a strong year despite recession
At its annual general meeting today Port Nelson Ltd reported a pre-tax operating profit of $12.86 million, with a dividend of $4.1 million to its shareholders, the Nelson City and Tasman District Councils.
Chairman Nick Patterson said the dividend was in line with previous years and demonstrated a strong result for the company. While there was a one off tax expense of $3.1 million, related to a change in the way depreciation on buildings is treated as part of the Government tax changes announced this year, he said this took nothing away from what had been a satisfying result. Taking this depreciation expense into account, the after-tax profit for the year was $3.4 million.
Mr Patterson said it had been a positive year with cargo volumes of 2.754 million tonnes, which is 102,000 tonnes ahead of budget and only fractionally behind last year’s record.
“The boom in log exports to China resulted in increased stevedoring activity and the trend to shipping more traditionally break bulk cargoes such as sawn timber and processed wood products in containers resulted in increased activity for our Quaypack business,” he said. ‘While we have had to put a significant one-off tax expense through the books, this should not detract from what has been a very solid year, operationally speaking.”
Mr Patterson said the port continued to invest in the infrastructure required to operate a modern and multi-faceted port operation, while keeping capital expenditure at a sustainable level for the long term viability of the business.
He said there had been some good results from investment on the environmental front, which included reducing and monitoring noise, and reducing the amount spent on water for dust mitigation by installing rain water tanks on cargo sheds.
Looking ahead, Mr Patterson said while some shipping lines have managed to attain some degree of profitability, this recovery remains fragile.
“The decision by many lines to rationalise services has already created space issues for exporters during the peak season period and it is clear to everyone in the industry that a hierarchy of container ports is likely to emerge,” he said. ‘”We see Nelson standing in the second tier of these ports with a mix of direct calling international services as well as coastal feeders taking cargo to a larger New Zealand port for export.”
Mr Patterson said changes in shipping services combined with a softening in the Chinese market for logs would make for very challenging times ahead.