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Port of Tauranga signals strong earnings despite Q1 freight decline

Friday 25th October 2019

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Port of Tauranga is forecasting a full-year profit of up to $101 million despite slightly weaker cargo volumes in the September quarter and a 6 percent decline in earnings.

The country’s largest port will likely report full-year earnings of $96 million to $101 million, chief executive Mark Cairns told the firm’s annual meeting in Tauranga. The firm reported a record net profit of $100.6 million in the year ended June 30. That was up 6.7 percent on the back of a 10 percent increase in cargo to 26.9 million tonnes.

Cairns noted today’s earnings guidance matched that given at last year’s annual meeting.

Shares in the company, 54 percent-owned by the Bay of Plenty Regional Council, fell 0.3 percent to $6.46. That trimmed their gain this year to about 30 percent.

Port of Tauranga is the country’s biggest export hub and draws freight directly from across the upper and central North Island. The firm also has interests in ports at Marsden Point and Timaru and inland ports in Auckland and Canterbury.

Freight volumes handled in the three months ended Sept. 30 fell to 6.8 million tonnes, 1.1 percent less than in the same quarter last year, due to weaker forestry and dairy volumes.

Net profit in the period was $21.7 million, down from $23.2 million the year before.

Log exports in the period fell to 1.7 million tonnes, down 5.2 percent from a year earlier.

Cairns told the meeting the decline reflected a sharp drop in log prices earlier this year and weaker demand. Volumes had been “a bit patchier” in recent months, he said in speech notes. 

“Overall, the guidance we are getting from our larger customers is that log volumes are likely to drop back to about the same volumes we saw in the 2018 financial year.”

Dairy export volumes in the quarter were about 1.7 percent lower than the year before.

Container movements were equivalent to more than 312,000 twenty-foot containers, 5.8 percent more than a year earlier. Transhipments, container transfers from one service to another at the port, climbed 9.2 percent to more than 92,000.


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