Port of Tauranga posted a 2.3 per cent decline in full-year profit, missing some estimates, while announcing plans to return $140 million to shareholders over four years and a five-for-one share split to boost liquidity.
Profit fell to $77.3m, or 56.8 cents a share, in the 12 months ended June 30, from $79.1m, or 58.2 cents, a year earlier, the Tauranga-based company said in a statement. Operating revenue fell to $245.5m from $268m, which it said partly reflected having to equity account Tapper Transport as an associate company within its Coda partnership.
The port company has been reviewing its capital needs because its five-year, $350m capital expenditure programme, which has included dredging its shipping lanes to accommodate larger ships as soon as October this year, adding cranes, straddle carriers and tugs, expanding its wharf and marshalling areas, and buying property, comes to an end in 2017. The first installment of the capital return is by way of a fully imputed special dividend of $34m, or 25 cents a share, and the share split has a record date of October 17.
"Port of Tauranga is in a sound financial position with strong prospects," said chairman David Pilkington. "We are looking ahead to the future with confidence."
The company will retain a strong balance sheet after the capital return while returning excess capital in a tax-effective manner, he said. "A return of the full $140m to shareholders would still ensure the company retains a conservatively geared balance sheet and an investment grade credit rating."
The company will pay a final dividend of 30 cents, also tax paid, lifting ordinary payments for the year by 1.9 per cent to 53 cents. Including the special dividends, payments are 78 cents. The share split "followed strong enquiry from Port of Tauranga's retail shareholders and share market analysts" and is "a measure taken to enhance liquidity in the market for shares."
Port of Tauranga currently has 136 million shares on issue and a market capitalisation of $2.6 billion. TrustPower, which has a market cap of about $2.57b, has 316 million shares outstanding.
The company's shares rose 2.2 per cent to $19.75 on the news, even though full-year profit missed forecasts of about $79.8m.
Container volumes rose 12 per cent to 954,006 TEUs (twenty-foot equivalent units) in the year, and MetroPort alone recorded a 39 per cent increase in volumes to 248,309 TEUs. Total cargo throughput slipped to 20.1 million tonnes from 20.2 million, reflecting a decline in bulk cargo to 9.4 million tonnes from 10.6 million.
The port recorded a decline in log export volumes, meat, fertiliser bases and grain and dairy food supplements, while volumes of sawn timber, paper products, dairy products, kiwifruit and oil products rose.
The company plans to provide guidance for the 2017 year at its annual meeting on October 20.