Supply issues, logs hit South Port profit

An aerial view of South Port at Bluff showing Tiwai Point aluminium smelter in the background....
An aerial view of South Port at Bluff showing Tiwai Point aluminium smelter in the background. PHOTO: SUPPLIED
Continuing global supply chain issues and softer demand for logs in China have resulted in South Port’s net profit after tax (NPAT) drop by $200,000 in the first half of the financial year.

Yesterday, the Bluff NZX-listed port company released its half year results to the market which showed its NPAT dropped to $5.9million in the six months to December 31, 2021.

That was in comparison with $6.1million in the first six months of the previous financial year.

The port’s revenue for the six months was $23.3 million, down $100,000 on the first half of the past financial year.

Container volumes through the port were also negatively affected, dropping by 23% to 20,800 for the half-year.

Container vessel calls to South Port were also down 32% at 17 calls compared with 25 the year prior.

However, total cargo activity increased by 1.5% to 1,745,000 tonnes compared with 1,720,000 tonnes the year before.

Of that, the port had an increase of 41,000 tonnes of stock food and also 28,000 tonnes more of aluminium, but a decrease of 29,000 tonnes of logs compared with the first half of FY2021.

In its announcement to the market, South Port said the downward cycle in the log market, because of decreased demand and high inventory levels in the Chinese market, and continuing global supply chain issues, had affected its half year result.

It also said cold storage volumes had declined due to a reduction in meat storage and fishing vessels calling at the port and there were increased stock food volumes imported into the Southland region to service the dairy industry.

The port’s chairman, Rex Chapman, described the disruption in the container supply chain as a "worldwide phenomenon" which had reached all corners of the globe, including South Port.

The Covid-19 pandemic continued to create uncertainty in the marketplace and provided challenges to South Port’s operations.

Containerised activity would continue to be affected by disruption in the supply chain which was not expected to improve until 2023 at the earliest, Mr Chapman said.

As a result of its outlook, the port company estimated its full year profit should fall between $9.7 million to $10 million, down from its record profit of $10.71million last year.

South Port’s directors had declared a interim dividend of 7.50c per share, which would be paid next month.

The company’s share price closed at $8.250 yesterday down 1.2% on the start of the day.

Add a Comment