Port of Tauranga first-half profit rises 2% on cost control as sales fall

Thursday 25th February 2010

Port of Tauranga posted a 2% gain in first-half profit by reining in costs as freight volumes fell, eroding revenue.

Net income was $23 million, or 17.2 cents a share, in the six months ended December 31, from $22.5 million, or 16.8 cents a year earlier, the company said in a statement today. Sales fell 9% to $67 million, while operating expenses declined about 11% to $36 million.

The port company said full-year earnings would be little changed from last year, when it had a profit of $45 million. While it has benefited from increased volumes of forest product exports, the container market is likely to remain “volatile” with about 10% of global container capacity currently idle.

“Despite reduced trade, we have achieved an increase in earnings, largely by cost reduction and without an increase in customer tariff rates,” said chairman John Parker. “In the face of a 9% reduction in revenue, this is a very satisfactory result and a great credit to all staff.”

The company will pay an interim dividend of 9 cents a share, unchanged from a year earlier.

Shares of Port of Tauranga rose 0.3% to $7, having earlier traded at $7.04. In the past six months the stock is up about 10%.

The net profit of $23 million was about in line with Forsyth Barr analyst Jeremy Simpson’s forecast of $22.7 million.

Tonnage through the port fell 5% to 6.5 million metric tons, with container volumes falling 18%.

Export tonnages of logs jumped 31% and dairy shipments climbed 44%. The port is one of a pared down list of exit points Fonterra Cooperative Group has chosen to use for its exports.

Businesswire.co.nz

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