Port of Tauranga, New Zealand's biggest port company, reported a 9 per cent drop in first-half profit as export log volumes fell and after the year-earlier result was inflated by a one-time gain. The company guidance is for flat full-year earnings.
Profit fell to $38.6 million, or 28.3 cents a share, in the six months ended December 31, from $42.6 million, or 31.3 cents, a year earlier, which included a $4.1 million gain from an asset sale, the Tauranga-based company said in a statement. Profit about matched brokerage Forsyth Barr's forecast. Operating income fell 9.8 percent to $121.9 million.
The company warned shareholders at their annual meeting last October that earnings growth may stall in 2016 because of uncertainty about log and dairy export volumes, which could counter the benefits of increased container traffic.
Today, the company affirmed that full-year profit was likely to be unchanged at about $79 million.
In the first half, log exports fell 16 percent to 2.4 million tonnes, although dairy volumes were up 29 percent and container volumes rose about 10 percent to 470,928 TEUs (twenty foot equivalent units).
Port of Tauranga is aiming to be the key hub port in the North Island servicing a future shipping trade expected to be characterised by fewer, larger vessels that need deeper berths. Freight would be brought around the coast from smaller ports to fill the big ships or carried by rail or road.
The company said today that it is about a third of the way through its project to dredge Tauranga's harbour channels to a depth of 14.5 metres inside the harbour and 15.8 metres outside the entrance, work that's expected to be completed in July.
Port of Tauranga was the first in the sector to pioneer inland freight hubs, with its Metroport facility in Auckland, which helped drive a 24 percent increase in container volumes railed to Tauranga from Auckland.
Overall export volumes across its wharves rose 0.8 percent to 6.5 million tonnes, while import volumes rose 1.6 percent to almost 3.7 million tonnes.
The company will pay a first-half dividend of 23 cents a share, up 1 cent from a year earlier but below the 25.3 cent payment forecast by Forsyth Barr. The dividend will be paid on March 25, with a record date of March 11.
The shares last traded at $18.05 and have gained 2.6 percent in the past 12 months. The stock is rated a 'sell' based on the consensus of five analysts polled by Reuters.