Port of Tauranga chief executive Mark Cairns noted PoT had weathered the impacts of other global virus emergencies. Photo / George Novak
Port of Tauranga chief executive Mark Cairns noted PoT had weathered the impacts of other global virus emergencies. Photo / George Novak
The coronavirus scare will hit Port of Tauranga export volumes "no question", but the fallout will be short-term, says chief executive Mark Cairns.
The international hub port is New Zealand's largest export port and its share price is already feeling the bite of investor jitters over the China-origin virus, closingon Friday at $7.58 after an $8 high in early January.
Cairns expects exports for China from the forestry sector to slow and meat and dairy outbound volumes to potentially also be affected as parts of China continue to be locked down and quarantined with subsequent impacts on Chinese industry and business sectors.
He said PoT expected to learn more this week about the situation at Chinese ports.
"We're keeping a close eye on it, but it will have an impact on our exports, no question. But it's short term."
The company would give more guidance to the market in its interim 2020 financial year results announcement on February 28.
Cairns noted PoT had weathered the impacts of other global virus emergencies and economic crises and they had proved to be short-term.
Log exports were last year already reflecting a sharp decrease in international prices and demand. The port company in late October reported a drop of 5.2 per cent in log export volumes to just over 1.7 million tonnes in the first quarter of the 2020 financial year.
Port of Tauranga chief executive Mark Cairns noted PoT had weathered the impacts of other global virus emergencies. Photo / George Novak
Dairy product exports also decreased — by 1.7 per cent, compared to the corresponding July 1 to September 30 period in 2019. Container volumes however rose by 5.8 per cent.
At the company's annual meeting in October, Cairns told shareholders that based on the first quarter's performance and notwithstanding any significant market changes, full-year earnings were expected to be between $96m and $101m — the same guidance range given for the 2019 year record result.
Cairns' prediction that the coronavirus impact on the port would be shortlived is supported by Craigs Investment Partners head of private wealth research Mark Lister.
"It's a blue-chip structure asset. Its share price was over $8 and exports still need to move around the world. This is not going to be a showstopper [but] will it have a short-term impact? Yes. To what degree we don't know."
Lister said the port, with its national economic infrastructure component, was "a bit more resilient" than other businesses affected by international events.
The spike to $8-plus in its share price had been driven by expectations of politically-driven change in the ports sector and questions over the future of Auckland's port.
This, plus the Government's recently announced multibillion-dollar infrastructure funding package, was "still going on in the background".
"This is all a potentially bigger medium-term driver of the share price than what we are seeing with coronavirus.
"Usually markets stop panicking when it becomes clear the number of new cases is peaking and stabilising. But we're probably not there yet. The market shoots first and asks questions later."
