South Port at Bluff has posted a strong first-half trading result, with tonnage surprisingly up and a more than 50% boost to profits, but cautioned that second-half capital expenditure will bite.
Its dividend for the period rose from 7 to 7.5c per share.
Revenue for the half-year to December rose 11.2%, from $16.1 million to $17.9 million, while after tax profit was up 53.7%, from $3.29 million last year to $5.06 million.
Total cargo volumes rose by 33,000 tonnes, or 2%, to 1.51 million tonnes, compared with 1.47 tonnes million during the same period last year.
South Port shares are up more than 17% on a year ago, and were trading unchanged yesterday at $4.40.
South Port chairman Rex Chapman said rather than the expected decline in cargo volumes, there was a lift driven primarily by stronger exports of logs and woodchip and increased dairy volumes - the latter from production expansion at Open Country Dairy's Awarua plant.
However, Mr Chapman was quick to caution that the interim results would be influenced by a much higher proportion of scheduled annual maintenance during second-half trading with ‘‘sizeable second-half maintenance expenditure'' across several operating areas.
While after tax profit for the second-half would decline because of increased spending levels on repairs and maintenance, he forecast full-year profit would be in a range of $8.25 million-$8.75 million, compared with $7.74 million in the previous full year.
South Port chief executive Mark O'Connor said in addition to the lift in dairy and logs, fertiliser and petroleum imports were consistent and activity related to the NZAS smelter activity was stable.
‘‘Based on the cargo pattern for full-year 2016 to date, it would appear that financiers are supporting dairy farmers and accommodating continuing pasture maintenance and feed-related expenditure,'' Mr O'Connor said.
On the outlook for the next six months' trading to June, Mr Chapman said despite subdued demand for a range of cargoes, there were recent customer signals that stable second-half operations were likely.
‘‘South Port's main cargo flows are expected to hold up well and to track budget expectations,'' he said.
Mr O'Connor said the Shell-led oil exploration consortium was seeking more time for sub-surface analysis before deciding whether to drill an exploration well within its Great South Basin licence area.
South Port and regional stakeholders continue to interact with the exploration interests, who remain optimistic about medium to long-term energy potential in the basin, he said.
The major operational event of the half-year was delivery of the tug Te Matua, a larger vessel bought from the Port of Tauranga for $2.5 million.
●Port Otago's half-year result will be reported to its 100% owner, the Otago Regional Council, in mid-March.