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Port of Tauranga eyes record $101mln 2019 profit on cargo growth

Wednesday 17th October 2018

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Port of Tauranga says annual profit may rise as much as 8.1 percent, based on increased cargo volumes in the first quarter. 

The country's biggest port expects net profit of between $96 million and $101 million in the year ending June 30, up from the record $93.4 million reported a year earlier. The port operator's earnings rose 4.6 percent to $23.2 million in the three months ended Sept. 30, due to increased volumes of bulk goods, logs, and shipping containers. 

Chief executive Mark Cairns told shareholders at today's annual meeting the economy is in good health, noting the 1 percent growth in the June quarter. He expects the port's cargo volumes and earnings will keep growing. 

"We are focusing our efforts ensuring that we have infrastructure and facilities in place to cater for the increase in cargo volumes we expect over the next five years," he said. 

The port operator had previously flagged its expectation of continued cargo growth but had refrained from providing earnings guidance until today's meeting.

Cairns said the company is pressing ahead with plans to extend its container terminal south of the existing berth and has ordered a ninth crane for delivery in 2020. 

The port shifted a total 6.6 million tonnes of goods in the September quarter, up 8.3 percent from a year earlier, while log volumes climbed 15 percent to 1.8 million tonnes. Containers increased 0.7 percent to the equivalent of 295,480 20-foot containers, and the number of transhipped containers rose 11 percent to 84,931 TEUs. Dairy was the only product to report a decline, down 7.1 percent to 414,000 tonnes. 

Chair David Pilkington reiterated his concerns about the government's plans for employment law reform preventing firms from opting out of multi-employer collective agreements. 

"If the opt-out provision is repealed, we fear industrial issues at one port will potentially lead to national strikes across the total sector, something we have not experienced since the ‘70s," he said. 

The port's shares fell 1.4 percent to $4.96. The shares are trading at a price-to-earnings ratio of 36 times, the eighth-highest on the S&P/NZX 50 index, where the average PE ratio is 17. 


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