Port of Tauranga's loss of container trade is being offset
by a rise in bulk cargo. Photo supplied.
The shape of Port of Tauranga's earnings is changing, as
accelerating bulk volumes offset a near-term fall in container
numbers, Forsyth Barr broker Suzanne Kinnaird says.
The greater contribution from the Mount Maunganui bulk wharf
was offsetting the fall in containers at Sulphur Point.
''Our earnings revisions conclude little change in
profitability in the 2014 financial year but a changing
Ms Kinnaird said $1 million of revenue of bulk cargo was
worth more to profitability of the port company than $1
million of container revenue.
The port incurred costs in loading and discharging containers
but the stevedoring and marshalling of bulk goods was
undertaken by the shipper.
The net $1.6 million fall in Forsyth Barr's port operation
revenue estimate for 2014 equated to just a $400,000 fall in
group operating earnings forecast, she said.
Bulk cargo volumes, led by increased log exports, were
booming at Port of Tauranga. Log ship departures during the
first half of the financial year totalled 173, according to
shipping stem data on the company's website, up 12% on the
previous corresponding period.
International trade - exports and imports - accounted for
nearly 95% of bulk volumes at the port, with exports
accounting for the majority.
Port of Tauranga was losing a share of the container market
to Ports of Auckland. In the three months to September, Port
of Tauranga's container numbers were down 13%.
''In part, we suspect the Fonterra - a key shipper of export
product through the port - food safety scare impacted
performance as dairy exports slowed through August.''
In contrast, Ports of Auckland increased its container
throughput by 11%, Ms Kinnaird said.
Port of Tauranga was expected to continue to lose share to
Ports of Auckland through the rest of the financial year.
Ports of Auckland had significantly improved its productivity
rates which had helped restore shipping line confidence in
On the other side, Port of Tauranga was attempting to secure
volume commitments from shippers, notably Kotahi, which would
allow it to start dredging but also retain volume that may
have naturally reverted back to Auckland, she said.
Forsyth Barr's 12-month share price target for Port of
Tauranga increased slightly from $13.80 to $14.10 with a hold
recommendation on the shares. Yesterday, the shares were
trading at $13.58.
Port of Tauranga had historically traded at a material
premium to the market and that was expected to continue, Ms