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South Port NZ lifts FY net profit 14% as bulk cargo growth continues

Thursday 23rd August 2018

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South Port New Zealand, which operates the country's southern-most port, lifted full-year profit 14 percent as cargo flows - in particular wood products -  continued to push higher.

Net profit rose to a better than forecast $9.66 million, or 36.8 cents per share, in the year to June 30 from $8.45 million, or 32.2 cents, a year earlier, the Bluff-based company said in a statement. The result was ahead of the $8.7 million to $8.9 million the company had forecast. Total operating revenue rose 10.9 percent to $41 million. 

Total cargo flow through Bluff was a record 3.445 million tonnes versus 3.053 million tonnes due to strong growth in bulk cargoes, which represented 85 percent of all volumes handled across its wharves.

"Bulk forestry cargo (logs and woodchips) for the first time in the port’s history, have eclipsed the one million tonne mark and is now the largest contributor to the port’s volume and profit," said chief executive Nigel Gear.

“Favourable market conditions in both China and India have supported the increase in log trade and the export of eucalyptus woodchip into Japan has remained buoyant."

Stock food imports lifted 80 percent compared to the prior year due to a particularly dry summer and poor pasture growth. Specialised products are typically shipped in containers with bulk coming in the form of molasses and palm kernel.

South Port also benefited in March after the Mediterranean Shipping Company, which calls at South Port on a weekly basis with their Capricorn Container Service, enhanced their South-East Asia – Oceania network by splitting their service into two separate loops, one to cover the South Island and the other the North Island. 

“This greatly improves the service out of Bluff with increased capacity to load/discharge more cargo and provide faster transit times to markets worldwide. These changes have already delivered an increase in containerised cargoes handled through the Port," said Gear. 

South Port chair Rex Chapman noted concerns over an escalating tariff war between major economies but said trade forecasts for South Port remain steady. Forestry exporters are still predicting healthy export markets in China, India and Japan. Cargo volumes and revenues are expected to be stable, he said.

The board declared a final dividend of 18.5 cents per share, payable on Nov. 6 with an Oct. 26 record date. That takes the annual return to 26 cents, unchanged from a year earlier.

Looking ahead, the company said earnings in the current financial year are likely to be approximately 10 percent lower and "increased expenditure this year will continue to be a factor that will have a bearing on profitability, however, the directors will endeavour to maintain the current level of dividend payment." 

The shares, of which the Southland Regional Council owns two-thirds, last traded at $6.65. Thay have gained 14 percent over the past 12 months. 


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