Tuesday 8th May 2018
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Port of Tauranga, New Zealand's biggest port company, registered strong growth in container volumes in the first quarter, helping boost the Bay of Plenty economy, Westpac Banking Corp said in a report.
In the three months to March 31 economic conditions in the Bay of Plenty improved marginally from the prior quarter as the horticultural, agricultural and forestry sectors benefited from higher commodity prices, said Westpac New Zealand industry economist Paul Clark in the bank's latest quarterly roundup. However, "increased activity in the manufacturing, utilities, and retail sectors also made a meaningful contribution, while the Port of Tauranga has experienced strong growth in volumes handled," he said.
The improving economic backdrop is feeding through into improving economic and employment confident. In the latest quarter regional economic confidence lifted to 27 versus 13.4 in the prior quarter, slightly below the five year average of 28.9. Regional employment confidence was at 122.6 versus 112 in the prior quarter, above the regional average of 106.1.
In February, Port of Tauranga raised its full-year earnings guidance after posting a 13 percent gain in first-half profit that was driven by growth in cargo volumes. In the six months to Dec. 31, company figures showed import volumes rose 21 percent led by increases in grain and dairy feed supplements, while exports rose 9.4 percent, led by a 13 percent gain in log volumes. Growth has accelerated following the September 2016 completion of a major dredging project that was the culmination of a $350 million expansion programme.
Westpac's Clark said he looked at the trend in volumes rather than an actual data point and that the trend is moving higher. Data from Statistics New Zealand points to a strong lift in the March quarter from the same period a year earlier, with the gross weight in tonnes of total imports through the port rising 17 percent while total exports, also as gross weight in tonnes, were up 13 percent.
Port of Tauranga shares, of which 54 percent are held by the Bay of Plenty Regional Council's investment arm, recently gained 1.2 percent at $5.16 and have risen 7.1 percent since April 26. The stock reached a record $5.23 on Feb. 23, after accounting for a share split to improve liquidity in 2016.
The shares are trading at a price-to-earnings ratio of 39 times, compared to 19 times for South Port New Zealand and 21 times for Northport shareholder Marsden Maritime Holdings, and are rated an average 'sell' based on five analyst recommendations compiled by Reuters.
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