South Port posts flat half year net profit of $1.3M

Thursday 5th February 2004

Bluff port company South Port today posted a flat half year net profit of $1.3 million for the six months to December 31.

However, the company said the solid first half result would only partly cushion the expected financial fallout from the recent dropping of shipping links to the Port of Bluff by the trans-Tasman Butterfly Service.

"It may, unfortunately, be a year of two quite different halves," chairman John Harrington said in statement.

The result was on revenue of $7.75 million against $7.41 million for the same period a year previously.

Earnings per share were down slightly to 4.99 cents from 5.3 cents.

The company posted a fully imputed 2.75 cents per share (cps) dividend payable on March 5.

South Port estimates that the 2004 full year financial result will be reduced by approximately $400,000, or 15% on 2003.

However, a reduction in dividend was not anticipated.

South Port said it had spent strongly on substantial enhancements to the port's infrastructure over the half year.

Expenditure included the purchase of a mobile container crane and an additional heavy container forklift.

The capital outlay reflected the buoyancy South Port experienced during the opening half-year, Harrington said.

"These positive enhancements followed a significant rise in our container business and meant South Port was well positioned to handle an anticipated further substantial uplift in containerised cargo."

In the six months to December 2003, cargo volumes rose 8 percent to 1,129,000 tonne with a record throughput in October of more than 260,000 tonnes.

However, the weekly trans-Tasman butterfly service provided by MSC and P&O Nedlloyd was ended after international demand for vessels caused the shipping charter market to overheat.

The shipping companies re-evaluated the use of their vessels on the trans-Tasman routes and MSC, ANL and P&O Nedlloyd replaced four vessels operating two distinct services with one rotation involving two vessels.

The reduction in cargo capacity meant Bluff and Timaru were dropped from revised schedules.

"We are taking all possible steps to secure replacement shipping links," Harrington said.

During the likely delay before shipping links are restored, some customers would probably use land transport alternatives to move their cargo.

Southport was, "adjusting our prospective cash flows and financial performance for the disruption", he said.

Comments from our readers

No comments yet