By Jenny Ruth
Wednesday 25th August 2010 |
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The key driver of Port of Tauranga's 9% rise to $49.4 million in normalised net profit was forestry-related export volumes, says Jeremy Simpson, an analyst at Forsyth Barr.
Forestry export volumes were up 19% to six million tonnes.
The company is "confident of increased profitability in (the year ending June) 2011 but remains wary of the volatile operating environment and the slow and patchy nature of the economic recovery," Simpson says.
"It is also indicating perhaps a near-term stalling in the rapid growth in log exports, given the global outlook, although volumes are expected to remain at high levels."
Simpson has cut his forecast for net profit in the year ending June 2011 to $51.5 million from $52.6 million previously and his 2012 forecast to $36.6 million from $38.1 million.
"Port of Tauranga has been a resilient performer in the slow economic environment. It remains well-positioned for any export-led recovery," he says.
But while there were improvements in imports and container volumes in the six months ended June this year, the near-term outlook for the port sector remains volatile, given the soft rate of economic recovery, he says.
"Port of Tauranga is trading in line with our valuation and at premium earnings multiples."
Recommendation: Hold.
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