Port of Tauranga growth not reflected in earnings - Broker

Damian Foster.

Log exports and increasing container numbers from the Port of Tauranga are expected to underpin its half-year result, due for release next Monday.

Sales revenue is predicted to rise 5.1% to $148.7million, earnings before interest, tax, depreciation and amortisation to be up 4.3% to $80.5million and reported after-tax profit to grow by 6.3% to $50.1million, Forsyth Barr broker Damian Foster said.

''We expect robust trade cargo tonnage during first half 2019, driven by log exports up by 11% and container volumes, being up about 6%,'' he said.

The annual 6.5million cubic metres of log exports was close to the anticipated sustainable harvesting rate for the next decade, or more, he said.

He noted the container growth through the period had been assisted by congestion problems at rival Ports of Auckland, where port development had impacted on its recent performance.

Mr Foster said Port of Tauranga guidance had after-tax profit guidance in the region of $96million to $101million, which implied growth would be in a range of 1%-6%.

He said while cargo growth at Port of Tauranga ''had been impressive'', but to date that had not been able to be translated into superior earnings growth.

Given the rate of future profit growth was ''modest'' rather than strong, Mr Foster had Port of Tauranga stock rated ''underperform''.

An upper North Island logistics and freight review was under way, and it was not known at present how that might affect the Port of Tauranga, he said.