Port of Tauranga, the country’s biggest export port, has reported a record profit bang on expectations as it readies a dredging project to prepare for larger ships.
Net profit of $112.1 million in the year ended June 30 was up 52 percent on the previous year and in line with First NZ Capital’s expectation of $112.9 million.
After a $38.2 million gain on the sale of the company’s 50 percent stake in logistics company C3 and other items are removed the underlying profit rose 5 percent to $77.2 million.
The port is continuing to push for supremacy in the port sector with dredging planned, and after investing in its MetroPort facilities in Auckland and taking a 50 percent stake in PrimePort Timaru.
“The first stage of dredging, due to start in 2014, is estimated to cost $40 million to $50 million and will make Port of Tauranga the first port in New Zealand capable of hosting container ships with a capacity of 5,000 to 6,000 TEU,” chief executive Mark Cairns said.
The bigger ships will have lower operating costs, which should benefit New Zealand exporters and importers.
The largest ships to call in New Zealand carry 42,000 TEU. Cairns did not say when larger ships would arrive or name shipping companies likely to operate them.
The port company is paying a final dividend by 26 cents a share, down from 27 cents last year, but it increased the interim payment so the total dividend for the year of 46 cents is up from 36 cents last year.
First NZ Capital predicted total dividends of 47 cents a share.
Port of Tauranga’s revenue rose 7 percent to $244.1 million, helped by a 7 percent rise in container volumes and 3 percent rise in total trade volume.
Dairy exports rose by 27 percent and log exports rose by 14 percent. Kiwifruit export volumes fell 8 percent due to outbreak of the Psa vine bacteria.
Trans-shipments, which are shipped onto other destinations, rose by 12 percent.
“The strength of these trans-shipments underscores the pivotal role Port of Tauranga occupies in the New Zealand supply chain as a freight hub,” Cairns said.
Chairman John Parker, who retires at the annual meeting, said the balance sheet is strong with gearing measured by net bank debt to net bank debt plus equity of 20 percent providing capacity for the port to prepare for the future.
The shares fell 1.4 percent to $14.50, and have gained 12 percent this year, matching the NZX50 Index’s gain in the same period.
Cairns said earnings growth will continue in 2014 and guidance will be provided at the annual meeting on October 24.