SPN
13/02/2014 15:16
HALFYR
REL: 1516 HRS South Port New Zealand Limited (NS)
HALFYR: SPN: South Port Interim Result
13 February 2014
Cargo Lift Cushions South Port Half-Year
Increased cargo volumes offset by lower warehousing returns resulted in South
Port New Zealand Ltd achieving a slightly reduced net profit after tax of
$2.68 million for the 6 months ended 31 December 2013. This compared with
$2.90 million in the prior corresponding period.
"This result was encouraging after the Company and the rest of the freight
market in New Zealand encountered a quieter than normal export off-season in
the July to September 2013 quarter," said the Chairman Mr Chapman.
In the previous corresponding season the more rapid movement of dairy, fish
and meat product into the market created low inventory levels at the start of
South Port's financial year and directly impacted warehousing activity and
containerised cargo flows.
In contrast to the prior comparable period where tonnages declined, cargo
volumes rose by 101,000 tonnes or 8% during the first half of the current
year to 1,369,000 tonnes compared with 1,268,000 tonnes in the prior
comparable period.
"This lift in cargo was driven primarily by strong fertiliser and stock food
imports plus increasing log export volumes," said the Chief Executive, Mr
Mark O'Connor. Notable declines were recorded for dairy products, NZAS import
cargo and sawn timber.
"While the 195,000 tonnes of logs exported through South Port was a 6 monthly
record, other parts of the forestry sector continued to encounter difficult
conditions. The Japanese market for softwood chips remained weak and sawn
timber activity was back on the comparable 6 month period.
"Fertiliser tonnages continued to be buoyant and supplementary stock food
also demonstrated growth as a consequence of farmers adopting new feeding
systems."
In August 2013, NZAS, the operator of the Bluff aluminium smelter at Tiwai
Point, and Meridian, the operator of the Manapouri power station, confirmed
the renegotiation of a long-term electricity supply agreement.
NZAS is a significant cargo generator at Bluff and continues to grapple with
declining aluminium prices. The Company is still operating at less than full
capacity but has signalled that potential exists to reinstate the fourth
potline later in 2014 provided it is economically viable to do so.
Mr O'Connor said South Port is presently working with its major container
shipping line customer MSC on a review of the Bluff port infrastructure that
will be necessary to service projected cargo growth in the region.
"This review will encompass the full range of container related
infrastructure including vessel discharging/loading, terminal activity and
the container repair/service depot. The review could result in further
capital investment being made in this area of the business."
The new 6,000 m2 dry warehouse constructed at the west end of the Bluff
Island Harbour to accommodate bulk cargoes is proving to be a useful addition
to South Port's warehousing resources. During the first half of F2014 both
fertiliser and stock food cargo has utilised the additional space.
South Port is working with Open Country Dairy to deliver an enlarged
warehousing solution in order to cater for a planned lift in dairy output. A
second milk powder dryer is currently under construction at Awarua and will
be commissioned in spring this year.
South Port and key regional groups continue to interact with oil & gas
exploration companies interested in the Great South Basin. Shell NZ and its
consortium partners OMV NZ Ltd and Mitsui E&P Australia Pty Ltd announced in
January 2014 that exploration work would most likely start in the Great South
Basin in the early 2016 summer period.
Mr Chapman said the second half of F2014 should provide consistent cargo
volumes across most sectors.
"Offsetting this positive tone is the more rapid flow of meat, fish and dairy
product to market which will result in reduced warehousing margins for the
Company's cold storage division. An uplift in bulk cargoes such as
fertiliser, logs and stock food should enable the Company to achieve its
previously stated year-end profit target."
Based on all presently known factors South Port estimates that its full year
earnings should fall in the range of $5.8 million to $6.0 million.
After assessing the anticipated year end result, the Directors have declared
a fully imputed interim dividend of 6.00 cents per share (2013 - 6.50 cents)
payable on 11 March 2014.
FOR FURTHER INFORMATION PLEASE CONTACT:
Mr Mark O'Connor Mr Rex Chapman
Chief Executive Chairman
Tel: 03 212 8159 Mob: 027 454 8455
Mob: 0272 560 407
End CA:00246966 For:SPN Type:HALFYR Time:2014-02-13 15:16:25
