Northland Port Corporation has taken a big hit to its bottom line from its former engineering subsidiary.
The Whangarei-based company reported a profit of $950,000 for the year to March 31, compared with $4.7 million for the same period last year.
Included in the latest figure was aloss of $8 million from Northport Engineering, which it sold in November.
The company will not pay a final dividend. Last month it paid a special dividend of 15c a share from the proceeds of asset rationalisation, and said then it expected to pay a special dividend of 5cps in December.*
Today's result saw net earnings per share fall to 2.3c from last year's 11.5cps.
Chairman Mike Daniel said the engineering blowout was due to $1.9 million in redundancy payments and one fixed-price contract (the conversion of the tug Asteri to a luxury yacht) which had proved "considerably more complex than originally anticipated."
The Asteri contract would be completed in the next few months, with provision made in yesterday's results for the cost of completion.
The company had also contracted out of remaining engineering contracts, and resulting redundancies and warranty claims had been met or provided for in the result, Mr Daniel said.
"We are well rid of this subsidiary which, while providing employment for many Northlanders, has cost shareholders many millions of dollars over the years."
He said results from the core port were "pleasing," particularly as log volumes were down on forecasts.
Restructuring was essentially complete, and $23 million was on bank deposit until the end of the year.
"Directors expect the current year's performance to result in tax-paid earnings from operations of at least 10c per share and to resume dividend payments of a substantial proportion of these earnings."
The company holds a 50 per cent stake in a new port being constructed at Marsden Pt, which is expected to begin operations early next year.
Shares closed 6c lower yesterday at $1.76.
* CORRECTION: The original version of this story incorrectly stated that Northland Port Corporation had said last month that it expected to pay a final dividend of 5cps.
