- Release Date: 01/11/12 13:00
- Summary: ADDRESS: SPN: South Port - 2012 Annual Meeting Release
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SPN 01/11/2012 11:00 ADDRESS REL: 1100 HRS South Port New Zealand Limited (NS) ADDRESS: SPN: South Port - 2012 Annual Meeting Release NZX STATEMENT 1 November 2012 South Port Highlights Dividend Policy The dividend policy of South Port New Zealand Ltd has resulted in a sustained lift in dividends over a five year period, the Company's Chairman, Mr Rex Chapman, told shareholders attending the Annual Meeting in Southland. Rather than adopting a fixed dividend payout ratio, South Port's Board maximises dividend payments by linking them to Free Cash Flow and profitability. "Improved profitability, together with this policy has more than doubled dividends from 7.75 cents per share in 2007 to 20 cents per share in each of the last two years," said Mr Chapman. The Company's share price over the past four years has increased from $2 per share to around $3 a share, reflecting the increase in underlying profitability and dividend payments, he said. In the latest year, reported profit was influenced by extraordinary items or one-off adjustments such as the one-off gain of $270,000 on the sale of a surplus mobile harbour crane. Normalised profit was $5.72m compared with $5.98m in 2011. Mr Chapman said the reduction in profit doesn't mean operating performance has deteriorated but in part represents the cost of providing additional resources to service a sustained lift in cargo. The Company also absorbed increased depreciation on recent plant purchases and significantly higher charges for insurance. The financial result was thus very close to last year's record profit. South Port declared a 14.5 cents per share final dividend resulting in a full year dividend of 20 cents per share, and representing a pay-out ratio of 88% of reported net profit. The total dividend equated to a gross return of 9.4% on 30 June share price of $3.05. In the 2011 year the port operator experienced a 25% volume increase in cargo, and that was a "major step up". The goal for 2012 was to consolidate on such a substantial lift and in 2012 a new record volume of 2.69 million tonnes was achieved. This lifted net surplus to just short of $6m. As part of the Company's strategy to protect existing trade, it is considered vital to have a cost effective and efficient container handling capability to service Southland's import/export container cargoes. A diverse range of bulk cargo also forms an important part of the business and this diversity "has been a real strength" in recent years. The Company is also pursuing a strategy of acquiring non-port businesses for the Port, preferably with cargo linkages. Blue Sky Meats has become a cold storage customer and the business of Southland Cool Stores was acquired in September. South Port is building a 5,900m dry warehouse on the Island Harbour. This would be available in March 2013. The Chief Executive, Mr Mark O'Connor, detailed the variances in cargo flows during 2012, with wood chips volume up 42%, stock food 114%, petroleum 20% and sawn timber 13%, while the logs trade was down 28% and alumina volume fell 8%. NZAS imports comprised 32% of the 2012 cargo by volume and the aluminium smelter's exports represent 11% of the cargo mix. Overall, however, cargo volumes had risen 45% over the last three years. To meet this increase in business, South Port had invested in a modern mobile harbour crane and in infrastructure such as large forklifts and a reach stacker, and upgraded berth paving. Mr O'Connor said cold storage capacity was now 8,700 tonnes on Island Harbour and 7,700 tonnes at the South Port Foreshore Road facility. He provided an update on the offshore exploration permit position and also the Southern lignite project by Solid Energy. A lignite-to-urea conversion plant would be a nationally significant project which would present very sizeable long term cargo opportunities for the region and South Port. Mr Chapman said, "Deteriorating economic conditions and falling coal prices have caused Solid Energy to undertake a major review of its activities but at this stage it is understood that Solid Energy remains committed to its longer term plans to develop Southland's lignite resource." Mr Chapman noted that calls for port rationalisation have become more muted than previously and South Port is not aware of any catalyst that was likely to stimulate developments. The Company estimates a 2013 bottom line consistent with 2012. A flat trading period may continue in the short-to-medium term as there is still a flow on effect from uncertainty in the US and European markets. Primary industries would be the on-going key for both the Port and region. FOR FURTHER INFORMATION PLEASE CONTACT: Mr Mark O'Connor Chief Executive South Port New Zealand Ltd Tel 03 212 8159 Mobile 0272 560 407 End CA:00229204 For:SPN Type:ADDRESS Time:2012-11-01 11:00:06
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- Ann: ADDRESS: SPN: South Port - 2012 Annual Meeti
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