Port posts strong half-year result

Port Otago has delivered a strong half-year to December financial result and $2.5 million interim dividend to the Otago Regional Council, forecasting expectations of an up-to-20% boost in full-year before-tax profit.

Port Otago presented its half-year to December result to the ORC yesterday, with combined port operations and subsidiary Chalmers Properties rising from $34.1 million a year ago to $34.7 million, while after-tax profit was down slightly from $5.03 million to $4.94 million.

While Chalmers Properties is subject to the vagaries of property reevaluations at the end of the financial year, its rental income of $6.2 million for the half year repeated last year's contribution.

Port Otago chairman Dave Faulkner said the latest half year was ''very similar'' to a year ago.

It was largely underpinned by increased container movements, up 7% to 84,000, from more dairy and refrigerated meat and fish exports, while there was a 4% decline in conventional cargo handling to 633,000 tonnes. Log and woodchip volumes were up, but fuel and fertiliser were down.

The $2.5 million interim dividend to the ORC, repeating last year's dividend, represented 51% of the half-year after-tax profit. To date, the ORC has received more than $117 million in dividends since 1988.

Mr Faulkner estimated the full-year operating profit before tax could increase from last year's $16.6 million to between $18 million and $20 million - up within a range of 8.4% to 20%.

With the board yet to decide in May on ordering a new $11 million tug in May, Mr Faulkner was asked if the increased operating profit meant the possibility of a larger dividend for the ORC.

''That's what the board will have to consider in May,'' Mr Faulkner said.

''A tug is a large chunk of money, but that is inevitable with [handling] larger ships,'' he said.

Mr Faulkner said Chalmers Property had made a ''great contribution'' to the overall group result, having neither purchased or sold properties during the six months, but maintained good occupancy rates in Auckland holdings.

He noted land titles would be available to Chalmers in September or October for commercial property developments in Hamilton, enabling them to go on the market for sale.

Capital expenditure for Port Otago during the period was $4.5 million, including a $1.7 million replacement of the container crane rails on the wharf, a 4000sq m $5 million warehousing development at Sawyers Bay and a $3 million oil wharf redevelopment in the upper harbour.

- simon.hartley@odt.co.nz