Port firm in line to further profits

Northland Port Corporation (NZ) saw its trading surplus for the interim period rise 8.8 per cent .

Northland Port Corporation (NZ) Ltd is on track to continue increasing profit growth which saw its trading surplus rise from $6 million in 2011/12 to $7.25 million for the 12 months to June last year.

Interim financial results for the second half of last year record a tax paid net surplus of $3.806 million (9.22c/share), up 3.7 per cent on the $3.672 million surplus for the same period in the previous financial year.

Chairman Sir John Goulter highlighted the improvement in underlying earnings, which had seen the trading surplus for the interim period lift by 8.8 per cent to almost $4 million with all operational areas of the group.

He also noted the overall result had been impacted by a non-cash, fair value writedown of $170,000 for the group's shareholding in Fonterra, with the quoted price for shares in the co-operative reduced by about $1.50 a share during the six-month period. The Fonterra shares relate to the 385-cow dairy farm Northland Port Corporation (NPC) operates on 115ha of its land and 80ha of adjoining leased land at Marsden Pt.

The NPC group owns 50 per cent of the port - run by its associate Northport Ltd - in partnership with Port of Tauranga. NPC also has a 50 per cent share of Northland Stevedoring Services.

The improvement in underlying earnings is largely due to expansion of Northport Ltd export log trade, which increased by 24 per cent to 2.4 million tonnes in 2012/13.

Log volumes increased over the second half of last year, when cargo throughput reached 1.659 million tonnes, up 7.6 per cent on the same period in the previous financial year.

Indications suggest export log volumes through Northport will continue at existing levels for the foreseeable future while annual cargo throughput for all trades is expected to exceed 3.2 million tonnes in the current financial year (2012/13: 3.095 million tonnes). Group earnings for the year are expected to rise if these tonnages are reached.

Sir John said initiatives over the past 18 months to increase storage capacity in the port terminal were already producing operational efficiencies. Growth in cargo volumes was likely to ultimately require construction of a fourth berth, for which initial designs were now being reviewed.

A fully imputed interim dividend of 5c a share (2012/13: 4.5c/share) will be paid out on March 21.