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Another steady year for Port Nelson Ltd

Another steady year for Port Nelson Ltd

The embargo is timed so the release is published after the AGM on Friday 28 October. Please do not publish before then.

Port Nelson Ltd has reported another steady year, with logs again contributing to a good result. A dividend of $4.2million (total) will be paid to the Nelson City and Tasman District Councils .

Chairman Nick Patterson told shareholders at the company’s AGM today that it was pleasing to see the port performing consistently, given the global economic downturn of the past 18 months. He said there were several factors contributing to revenue being higher than expected.

“Logs were again a steady performer for us, with the demand from China contributing to cargo volumes being 51,000 tonnes up on budget,” he said. “This meant stevedoring activity was also stronger than expected, both in Nelson and for log operations out of Picton. Container volumes, while down on last year, were also higher than anticipated.”

However Mr Patterson said expenses had also been over budget, with the high cost of maintaining the port’s two existing cranes driving the decision to bring forward the purchase of the new LHM 550 mobile harbour crane. Electricity and fuel prices had gone up, and plant hire costs were also up because of the greater stevedoring activity.

The final cargo tonnage figure for the year was 2.711 million, down on the record of 2010 but still ahead of budget.

“As well as the strong figures for logs, apple volumes were ahead of expectations for the year, as were bulk wine shipments in flexi-tanks, thanks to another large grape harvest in Marlborough,” Mr Patterson said. “However, processed forestry volumes were down on budget, due to higher log prices, log availability issues and tough market conditions.”

Mr Patterson said while it had been a postive year to the end of June, there were indications the demand for logs from China was now softening. He said there were other major challenges facing key port users.

“The skyrocketing value of the New Zealand dollar has made life very difficult for many exporters, with the export apple industry again facing a difficult year,” he said. Mr Patterson said another cost would be the 200 percent hike in insurance premiums facing the port, following the Canterbury earthquakes.

And he said direct shipping services remained an ongoing issue within the industry.

“The move to larger vessels continues to be pushed by many parties, including the Shippers’ Council and the newly formed freight partnership Kotahi, currently consisting of Fonterra and Silver Fern Farms,” he said. “It certainly remains the long-term industry view that ships will only get bigger, even given recent moves by a number of lines to new services with smaller vessels.” Ends

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