Port of Tauranga lifts dividend

Port of Tauranga expects strong demand for New Zealand's exports will continue to drive cargo...
Port of Tauranga expects strong demand for New Zealand's exports will continue to drive cargo volumes at the company's wharves. Photo supplied.
Port of Tauranga increased its interim dividend by 5% to 21 cents per share after reporting an operating profit of $66.7 million for the six months ended December, up 11% on the previous corresponding period.

Company chairman David Pilkington said Port of Tauranga was well positioned for its next phase of growth.

''We have delivered a strong first-half result, while our acquisition of a half share in PrimePort Timaru and our development of a freight hub in Rolleston, southwest of Christchurch, opens a new frontier of opportunities.''

Those investments, coupled with the emerging strength of the New Zealand economy and strong international demand for the country's agricultural and forestry exports, would continue to drive increases in cargo volumes across the company's wharves, he said.

Revenue was up 16% in the period to $137.1 million from $118.5 million in the pcp.

Last year, the company received a one-time boost of $38.3 million to its reported profit of $74.2 million. Without the boost, the reported profit in the current period was $39.3 million.

Forsyth Barr broker Suzanne Kinnaird said the result was below her expectations, following weaker container volumes and lower non-log bulk exports.

Container volume fell 12% against the pcp. In contrast, log volumes were up 29%.

The company maintained its guidance range of $77 million to $81 million, implying similar levels of profitability in the second half.

''Port of Tauranga is experiencing a period of lower growth. Increased competition for containers will likely remain a feature over the medium term.

Log volumes can rise further but at a significantly lower rate than in the first half.

While volume commitment for dredging may represent a near-term catalyst and strategic position, we think this is largely built into the current share price,'' she said.

However, Mr Pilkington said the group was well positioned to capitalise on the trends of growing cargo volumes and increasing average size of vessels.

Trade volumes were expected to improve over the second half of the year and provided there were no significant market changes, the company expected to meet its profit forecasts.

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