News
South Port New Zealand’s strategy of diversifying earning streams has protected the Company’s revenue from adverse economic cycles.
The Chairman, Mr Rex Chapman told shareholders attending the Annual Meeting in Bluff today, the 2015 result is “particularly pleasing because this time last year we did not predict such a good result, given the growing competitive pressure in container activity and falling commodity prices.”
South Port has earlier reported another record cargo throughput at Bluff of 2.68 million tonnes, a 5% increase on 2014, which resulted in another record net profit after tax of $7.7 million, up 15% on 2014.
The Company has diversified across container and bulk cargoes transfers, warehousing, cold storage, property and infrastructure leasing and this has been rewarded.”
Stronger-than-expected volumes of imported bulk cargos, notably of stock food and fertiliser, contributed to the record performance. “We were pleasantly surprised that these particular cargos held up so well in such a difficult period for the dairy sector.”
Mr Chapman said, “Over the last five years, South Port has steadily increased dividends from 20 cents per share to 24 cents per share. Since listing in 1994 , the Company has delivered about $165 million to shareholders through share price appreciation and annual dividends.”
South Port’s strategy is to maintain good working relationships with all of the New Zealand ports in order to take advantage of “inevitable changes” in the port sector.
“Just as Tauranga has now reached into the South Island through Timaru, it is expected that other ports will be seeking to enter into working relationships with one another in order to capture regional cargo outside of their immediate catchment area.”
New supply chain agreements such as that between Kotahi and Port of Tauranga have triggered “intense competition between shipping companies for the remaining cargo and shipping rates are at unsustainably low levels,” said Mr Chapman.
Some New Zealand ports were undertaking dredging to ensure they could accept larger container vessels up to 6,500 TEU in capacity.
“This will mean that the ports, at which larger vessels will call, will have to look beyond their own backyard for containerised cargo to fill the vessels. Inland ports and freight centres are the key to aggregating this cargo.”