South Port Lifted By Positive Economic Tide

South Port New Zealand Ltd, operator of the Port of Buff, has benefited from a long running positive economic cycle in the New Zealand economy which has supported growth in cargo volume and profitability, the Company’s shareholders were told at
its Annual Meeting at Bluff yesterday.

The Company’s Chairman, Mr Rex Chapman, indicated that the economic momentum has continued into the current 2017-18 year.

This 2017 result again emphasised the importance of bulk cargos to South Port’s business.

“South Port is primarily a bulk port with a container operation. Bulk or break bulk cargos comprised over 2.6 million tonnes with containers representing just over
400,000 tonnes. This equates to a volume split of 86% bulk vs. 14% for containers.”

“Within the main bulk cargoes of forestry, NZAS cargo, fertiliser, petroleum and stock food, the log category continued to show strong growth. Log exports reached a new record of 560,000 tonnes while forestry in total now represents almost 30% of South Port’s overall cargo.”

Other bulk cargo volumes were generally steady.

Continued growth in container throughput propelled South Port to a new record of 39,300 TEU, up from 35,100 in the previous year. This increase in container volumes was primarily due to an increase in dairy-related exports and inbound cement, fertiliser and farm nutrition products.

FY17 net profit was $8.45 million, a very satisfactory result, although below the FY16 record of $8.71 million. One of the significant differences in financial performance in
FY2018 was an 18% increase in the cost of repairs and maintenance which was forecast last year.

Guidance was for FY17 profit to be back by about 15% which would have delivered a profit in the order of $7.4 million and so the Company bettered forecast by over $1 million.

“Another positive was that we were able to once again, for the second year in a row, break 3 million tonnes of cargo and we matched last year’s record volume of 3.05 million tonnes.”

This year’s sound financial result has enabled the Board to pay a final dividend of 18.5c which translates to a full year dividend of 26c, the same as last year.

Mr Chapman said, “At this early stage of the financial year, we are expecting
South Port’s main cargoes of logs, NZAS, dairy exports, petroleum and fertiliser to
show modest growth in the next 12 months.

“The dairy sector appears to be on a more stable platform and this should support both the bulk and containerised cargoes which are associated with it.”

“Given reasonably stable volumes for the year, we are predicting that our earnings will be broadly consistent with the past year and on that basis the Board will be
aiming to maintain the current level of dividend pay-out.”

An update of earnings will be provided when the interim result is released.

Mal