- Release Date: 23/08/12 16:15
- Summary: FLLYR: SPN: South Port Year End Result
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SPN 23/08/2012 14:15 FLLYR REL: 1415 HRS South Port New Zealand Limited (NS) FLLYR: SPN: South Port Year End Result NZX STATEMENT 23 AUGUST 2012 Strong Result in Mixed Cargo Year for South Port The 2012 year saw a mix of cargo volume gains and losses across the wharves at Bluff, yet South Port New Zealand Ltd's reported after tax profit of $5.99 million is only slightly lower than the 2011 result of $6.26 million. Overall substantial cargo volume gains for petroleum, stock food, sawn timber and woodchips outweighed tonnage declines in other categories, particularly logs and imported products used by NZ Aluminium Smelters. "A number of South Port's customers encountered challenging operating conditions in the past season and this created either slow moving inventory or reduced margins for these businesses," said South Port Chairman, Mr Rex Chapman. "We were pleased to post another strong trading result aided by a primary produce sector that has demonstrated resilience," he said. "Total cargo volume passing through the Port was at a record level for a second consecutive year." The reported result included a one-off tax-paid adjustment of $270,000 from the sale of a Liebherr mobile container crane where the sale proceeds exceeded the book value of the asset. The plant became surplus to requirements and was sold in January, having been replaced by a larger more modern crane a year ago. Excluding this adjustment 2012 normalised profit was $5.72 million, compared with $5.98 million in the prior corresponding period. South Port recorded revenue from port and warehousing operations of $26 million, an increase of 4% on the $25.1 million achieved in the pcp. In 2011 the Port experienced a 25% lift in cargo volume and the on-going gain in activity has been supported by employment of additional personnel, plant and infrastructure. The costs of the additional resources and higher insurance premiums resulted in a 5% decline in operating profit to $8.3 million ($8.7 million). After net financing costs of $375,000 ($339,000), South Port's surplus of $5.99 million was 4% down on the previous financial year. Earnings per share were 22.8 cents (23.9 cents in FY11). Total equity of $29.6 million is after dividend payments of $5.25 million ($4.72 million). The final dividend is 14.5 cents, taking the full year dividend to 20 cents, consistent with 2011. The dividend payment represents a gross return of 9.4% (net 6.6%) based on a share price of $3.05 as at 30 June 2012. The dividend pay-out ratio for 2012 was 88%. Net asset backing is $1.13. South Port has strengthened its balance sheet during the year. Current liabilities were held at 2011 levels of $4.5 million but current assets were improved to $5 million, compared with $3.4 million, thus resulting in a net working capital improvement to $0.5 million versus -$1.1 million in the prior year. Total Group assets reached $34.8 million. PORT ACTIVITIES Containerised cargo activity was stable in the 2012 year with total TEU volume at 32,500 (33,000 last year). South Port Chief Executive Mr Mark O'Connor said, "the global container shipping market sustained significant losses and this has necessitated both schedule and tariff rate realignment." Mr O'Connor noted that this can cause disruption and financial adjustment for cargo providers. "Container shipping lines are entering business alliances and vessel sharing arrangements which are designed to reduce operating costs in what can only be described as a brutal freight market." "This is partly attributable to the economic events occurring in Europe which have severely impacted trade volumes flowing between that market and Asia." "It is important that companies providing international connections are able to maintain viable shipping services", he said. In June Messrs Chapman and O'Connor were in China to sign a Technical Co-Operation Agreement with Lanshan Port, the largest New Zealand export destination for Pinus Radiata logs in eastern Shandong province. Mr O'Connor said the Chinese market is an important export prospect and appropriate effort must be invested by New Zealand businesses to understand the dynamics of the market and trading opportunities. In the latest year South Port sustained a sizeable decline in log export activity over the final three quarters. Over the full year this trade fell by 90,000 tonnes, or around 27%. Mr O'Connor noted that the expectation of forestry customers was that more favourable trading conditions would re-occur in the spring. It had been fortunate that strong outflows of woodchip and higher tonnages of sawn timber had offset the decrease in log volume. He said NZAS (now part of the Pacific Aluminium Group of six Australian and New Zealand assets of Rio Tinto) reduced production capacity by around 15%. This action was necessary due to the deterioration of market conditions, including the uncertainty around electricity market pricing, the high exchange rate and low aluminium prices. "A resilient dairy sector offers a growing range of import and export cargoes", said Mr O'Connor. Fertiliser tonnages remained at all-time highs, linked to general economic activity in the region and petroleum matched the record cargo levels of 2005. Cold storage contributed to the overall result. Sluggish market conditions saw higher levels of customer inventory for meat and fish. OUTLOOK "It is unlikely that New Zealand will be immune from the economic ills being suffered by a wide range of countries", said Mr Chapman. "An unhealthy European zone does not bode well for our Asian trading partners who rely on Europe for consumption of their manufactured goods." "The US market is stuttering with no real upward economic trends evident and China's superior growth levels are finally beginning to wane, although indicators suggest that the slowing in China's growth may have stabilised." "Should conditions in the US and Europe deteriorate further, the Chinese authorities will need to consider other measures if they are to meet the current 7.5% growth target." "Some sectors will be buffeted around while others will continue to perform well. For a number of South Port's customers it will be a matter of bracing themselves for the bumpy road that lies ahead." South Port management considered that risks to business growth lie firmly on the negative side of the ledger. "Whilst New Zealand is better placed than many other nations, it is likely to be some time before economic growth returns to stimulatory levels." South Port will focus on cost containment and prudent management in the year ahead and is optimistic of a stable profit result for FY13. FOR FURTHER INFORMATION PLEASE CONTACT: Mr Mark O'Connor Mr Rex Chapman Chief Executive Chairman South Port New Zealand Ltd South Port New Zealand Ltd Tel: (03) 212 8159 Mob: 027 454 8455 Mob: 0272 560 407 COMPANY PROFILE South Port New Zealand Ltd (South Port) is the southern most commercial port in New Zealand, located at Bluff and operating on a year round, 24 hour basis. It is situated in the rich productive province of Southland which is responsible for generating a sizeable proportion of New Zealand's total exports by value. The region's major cargo producing sites are situated within 30 to 80 km of the Port. The Port of Bluff has been operating since 1877 while the Company was formed in 1988 having taken over the assets and liabilities of the former Southland Harbour Board. South Port was listed on the NZ Stock Exchange (NZX) in 1994 and has Environment Southland, the region's local government environmental agency, as its 66% majority shareholder. SOUTH PORT FACTS o Owns and manages assets which have a book value of $35 million o Directly employs more than 65 full time equivalent staff o Is the only Southland based company listed on NZX - market capitalisation as at 30 June 2012 equates to $80 million o Handles in excess of 2.6 million tonnes of cargo in a normal trading year o Offers full container, break-bulk and bulk cargo capability and services the following main cargoes: - import - alumina, petroleum products, fertiliser, acid, fish, stock food and cement - export - aluminium, timber, logs, dairy, meat by-products and woodchips o Has split its land-based operating resource into four main divisions - warehousing & packing, containers, cool & cold storage and dairy o Undertakes its primary port operation on a 40 ha man-made Island Harbour situated at Bluff o Operates a separate dedicated fuel berth at Bluff Town Wharf plus provides the Tiwai Wharf facility to NZAS under a long term licence o Services vessels carrying approx 1.0 million tonnes of cargo destined for movement across the Tiwai Wharf each year, of which 2/3 is raw material imports while 1/3 is finished aluminium product o Has approximately 8 ha of on-port land available for further port development or industry establishment End CA:00226369 For:SPN Type:FLLYR Time:2012-08-23 14:15:18
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