Port of Tauranga reports decline in profit

Port of Tauranga has reported a 7.8 per cent decline in profit mostly due to the weak forestry sector it hopes will soon recover on the back of a lower New Zealand dollar.

The country's largest export port reported a net profit for the year to 30 June 2006 of $31.032 million. Excluding on-time items both this year and last year the profit was down 1.2 per cent.

Directors have declared a final dividend of 13c per share, payable on October 6, bringing the total payments to 20c.

The result was satisfactory given the difficult trading conditions, particularly in the forestry sector, chairman John Parker said.

"The beginning of 2006/7 has shown improved performance in the forestry sector. The weakening in the NZ currency, despite its effect on fuel imports, benefits exporters generally," said Mr Parker.

The result is the first under his leadership of Mark Cairns after Jon Mayson stood down at the last annual meeting and it comes as major shipping companies review where they are calling in New Zealand.

Revenue was lower partially because the volume handled by the port was lower but also because of a change in the accounting treatment of associate company Toll Owens.

Toll Owens was formed by merging 100 per cent-owned Owens Cargo Company with Toll Logistics. Previously all of its revenue was counted now only numbers reflecting the size of the equity stake in the merged business were recorded.

"As anticipated at the outset of the year, and acknowledged in our interim results, the (export) industry has experienced substantial challenges in the trading environment," said Mr Parker.

"Forestry, in particular has been under considerable pressure," he said.

Total trade for the year, at 12.278 million tonnes, was 344,800 tonnes less than last year.

Forest exports through the port were down 5.6 per cent, though there was a slight increase in paper exports.

Import volumes, especially fertiliser bases, were down on the previous year by 161,600 tonnes, or 26.3 per cent.

"The most significant improvement in import volumes was the throughput of coal imported from Indonesia to supply the Genesis power station at Huntly.

This amounted to 1.130 million tonnes, which represents an increase over last year of 28.5 per cent. Other increases in import volumes included cement (23,000 tonnes), and grain (31,000 tonnes)."

Container volumes were down 3.4 per cent but the port said recent performance in the container sector was encouraging.

- NZPA