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Buoyant Southport plans $6.3M of capex as Bluff booms

Buoyant Southport plans $6.3M of capex as Bluff booms

Aug 25 (BusinessDesk) – The Port of Bluff operator, South Port New Zealand Ltd., will spend $6.3 million in the next financial year on new cargo-handling facilities in the largest commitment of capital spending since the company was formed in 1988.

South Port reported a net profit after tax of $5.98 million in the year to
June 30, a 15% improvement on the previous year as every major cargo category, including logs, processed sawn timber, meat and dairy-related exports and imports, and a record year of shipping from the Rio Tinto aluminium smelter at nearby Tiwai Point.

“In the port industry, it is unusual for almost all cargo sectors to be either growing or maintaining their existing tonnage levels at the one time,” said chairman John Harrington in a statement to the NZX.

Total tonnage through the port had increased from 2.17 million tonnes in the previous financial year to 2.674 million tonnes, and the port had “at times been stretched with its existing resources to service an elevated base level of cargo.”

Consequently, despite forecasting profits 15% to 20% lower in the current financial year, Harrison said the port was committing $5.8 million to a new, larger mobile harbour crane, and $700,000 on an additional heavy lift container forklift.

At the same time, South Port is lifting its total dividend payout for the year to 20 cents a share, compared with 17 cents last year. A final, fully imputed dividend of 14.5 cents a share, payable Nov.2, with a record date of Sept. 23.

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The result was built on record revenues of $25.1 million, up 11% on the previous year, while earnings per share lifted from 23.9 cents to 19.9 cents on a normalised basis, which ignores non-cash impacts of changes to rules
governing capital asset depreciation.

The reduced profit outlook owed to the strength of the New Zealand dollar, weakening dairy commodity prices, and debt-constrained European and American economies, along with a substantial increase in insurance premiums because of the Canterbury earthquakes.

At balance date, the port had only managed to replace some 80% of its expiring reinsurance cover, although the remainder had been purchased since then.

With just 26.2 million shares on issue and issued capital of $9.4 million, the thinly traded South Port shares were unchanged today at $3.20.


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