Port of Tauranga result: Coronavirus concern pulls down profit guidance

Port of Tauranga has adjusted its profit guidance as coronavirus wreaks havoc around the world. Photo / File

Port of Tauranga has reduced its full-year profit guidance as coronavirus continues to cause trade uncertainty.

New Zealand's largest port, announcing a 1.4 per cent decrease in group net profit for the six months to end December, said its revised full-year profit guidance was $94-$99 million compared to the previous $96-$101m.

Group net profit after tax was $48.3m, only slightly down on the same period the previous year despite total cargo volumes dipping 4.2 per cent to just under 13.3m tonnes.

Revenue was up 1.2 per cent to $154.8m.

The interim dividend is steady on the previous period at 6c per share.

Chief executive Mark Cairns said the full impact of coronavirus on trade had yet to be determined.

Log exports had been hardest hit, down 8.4 per cent to 3.4m tonnes, with volumes already impacted by lower international prices and demand since mid-2019.

Log inventories in China had surged with resulting shipping cancellations and delays, a situation the port expected to continue into next month.

"Port of Tauranga continues to be well-positioned to weather market fluctuations as its customers are primarily large forest owners, who are less susceptible to commodity pricing volatility than smaller, at-the-wharf-gate log exporters," Cairns said.

However, the trade outlook for the second half of 2020 remained uncertain and dependent on the length of the market shutdown in China and any slowdown in other countries taking extreme measures to manage the coronavirus risk.

Chairman David Pilkington noted the revenue increase despite the 4.2 per cent dip in total trade, and said the longer-term outlook remained positive for cargo growth, particularly in containers.

Container volumes rose 3.4 per cent to 642,209 TEUs. However global commodity cycles resulted in exported cargo dipping 2.6 per cent to 8.6m tonnes.

Imports fell 6.7 per cent to nearly 4.7m tonnes. Dairy exports were up 6.3 per cent to 1.2m, while frozen meat exports jumped 10.8 per cent in volume.

Ship visits decreased 7.4 per cent from 842 to 780 during the period.

Earnings from subsidiary and associate companies increased 17.2 per cent with a strong performance from Northport, up 9.7 per cent, and PrimePort Timaru up 29.2 per cent.

Coda Group returned to profit in the second quarter and Quality Marshalling also performed solidly, the company said.

The port had just taken delivery of its ninth container crane and the first of seven new straddle carriers, three of which were hybrids expected to be up to 40 per cent more fuel-efficient that diesel-electric models. The company said the port would extend its container terminal wharves by up to 220m by converting storage land to the south of the existing berths.

The company has appointed a new commercial manager, Blair Hamill, currently Zespri's chief global supply officer.

Future expansion stages would be driven by cargo volume growth and primarily involve rail-mounted electric stacking cranes and more ship-to-shore cranes.