Lyttelton Port optimistic despite fall in half-year profit

Lyttelton Port was optimistic today despite reporting an 11.9 per cent fall in its December half-year net profit to $4.9 million.

Earnings before interest, taxation, depreciation and amortisation (ebitda) rose 1.4 per cent to $11.5m.

The company is forecasting its full year net profit to be in the range of $12.3-$12.8m.

Revenue during the half year rose 9.3 per cent but operating costs rose 14.7 per cent increase in operating costs.

The company maintained its fully imputed interim dividend at 3.75 cents per share which will be paid February 18.

Company chairman Barney Sundstrum described the result as "encouraging", saying the company was progressing well on its growth plan.

Container volumes rose 14 per cent on the year-ago period with an 8 per cent rise in the number of containers.

Ship turnaround time at the container terminal improved 18 per cent.

There was a 6 per cent increase in coal volumes to over 1 million tonnes and there was an 11 per cent increase in dry bulk imports to 306,000 tonnes.

Revenue during the half year rose 9.3 per cent but operating costs rose 14.7 per cent increase in operating costs.

Lyttelton had secured a three year terminal contract with Mediterranean Shipping Company (MSC), the world's second largest shipping firm.

It had secured a two-year contract renewal with P&O Nedlloyd and a two-year stevedoring services contract with Australia National Line (ANL).

It was also negotiating extended contracts with international container lines COSCO, MISC and PIL.

Mr Sundstrum said operational costs rose because of trade volume growth and due to $1m being spent on additional maintenance.

"This spend was above the level of normal general maintenance and is required to bring our facilities up to the standard required to grow our business."

The company is upgrading its Cashin Quay, replacing the public loading and discharge facilities at its B Jetty and re-painting its container cranes.

"We signalled at last year's annual meeting that the company faced a significant 'catch-up' of both capital and maintenance expenditure," said Mr Sundstrum.

The company had bought four new straddle carriers in January at a cost of $5m bringing its fleet to 13, in a move designed to increase productivity.

Chief executive Peter Davie said the recent services announcement by MSC gave cause for optimism.

Coal volumes were still not at the level expected due to slower than anticipated development rates at Solid Energy's Spring Creek mine. However, the company said it was delighted with the agreement reached between Solid Energy and Toll Rail as it gave certainty on the future of the Midland rail line.

Log volumes fell significantly due to a severe downturn in exports, as experienced by several New Zealand ports.

Lyttelton shares closed yesterday at $1.81, having traded between $1.59 and $1.90 in the last year.

- NZPA