fbpx

South Port Releases Interim Result

What's On Invers Business News Presented by and

The operating performance for the half year was strong with total revenue increasing by
7.4% to $20.90 million. However increased repairs and maintenance, including the
scheduled five yearly dry docking of the tug Hauroko ($838K expenditure) led to a reduction of 7.1% in net profit after tax.

South Port New Zealand Ltd’s NPAT in the period was $4.55 million (FY2018 – $4.90 million), the Company has advised NZX.

At the 2018 Annual Meeting, the Directors advised that 2019 earnings were likely to be
approximately 10% lower than in FY2018. The result is consistent with that guidance.

In the current half yearly Report, Mr Chapman says, “Over the coming months it is expected that there will be a number of fluctuations in each bulk cargo category however by year end the total volume is forecast to be in line with budgeted expectations.

“Container volumes are tracking 10% ahead of the previous period and this positive trend is expected to continue through to the end of the financial year. Increased maintenance
expenditure on the infrastructure and floating plant, as noted in previous commentary, will continue to have an impact on profitability going forward.”

Based on all known factors at the date of its 2019 interim result, South Port estimates full year earnings should fall in the range of $8.60 million to $8.90 million (FY2018 – $9.66 million).

After assessing the anticipated year end result, the Directors have declared a fully imputed
interim dividend of 7.50 cents per share (2018 – 7.50 cents) payable on 6 March 2019.

In the event that the Company’s FY2019 profit falls within the above forecast range the
Directors are confident that the full year dividend payment will be consistent with the
previous year. For the past three years, South Port has paid a 26 cents per share dividend.

Key factors impacting on this year’s interim result included:

  • Increased maintenance expense with the scheduled dry docking of the harbour tug Hauroko.
  • Expectations of dry weather led to an increase of stock food imports for the dairy
    industry.
  • New exports of containerised Medium Density Fibreboard (MDF) being packed at the Intermodal Freight Centre (IFC) and shipped on the Mediterranean Shipping Company (MSC) service through Bluff.
  • Increased storage and packing activities in the warehousing division.

Maintained Cargo Growth

The Chief Executive, Mr Nigel Gear says, “Total cargo activity was 1,772,000 tonnes
compared with 1,754,000 tonnes in the prior year interim period. This represents an
increase in cargo flows of 18,000 tonnes or 1%.

“However revenue was up by 7.4% due to a favourable cargo mix, strong performance in
the warehousing division and increased marine activity.

“Bulk cargoes continue to be the backbone of the business. Volumes were comparable to
the same period last year with the exception of fertiliser (-34,000) and stock food (+22,000).

“Fertiliser imports were lower than in the previous period due to large volumes being carried over from last season. Volumes are however expected to meet budgeted expectations by year end which will be slightly down on the previous period result.

“MSC continues to be an important contributor to the Port and to the region’s
exporters/importers, providing a competitive alternative to shipping lines calling at other ports.

“A record volume of 19,800 TEU was handled on MSC during this interim period, 10%
above last year’s throughput as noted above.

“The newly paved log storage area on the Island Harbour has been operating for the past
nine months. The improvements that this piece of infrastructure brings are clear with safer
working conditions, better utilisation and an improved environmental outcome.

“Log volumes are similar to last season. However, there has been a slowdown of exports
to the Indian market. Volumes have also been impacted by poor ground conditions in
certain areas within Southland affecting the ability of logging crews to harvest their forestry blocks.”

Mr Gear said “these two factors are expected to lead to a reduction in throughput by year
end of approximately 10% compared with last season.

“The most recent global dairy trade (GDT) auctions have delivered small increases which is a reflection of the tightening in supply of global milk production.

“Although New Zealand supply has increased this season there has been a decline in
production in both Europe and Australia which has impacted positively on the recent
auction events.”

Port operational highlights included completion of construction of Mataura Valley Milk’s
(MVM) infant formula plant, which was commissioned in the second quarter with processing beginning in August 2018. MVM’s initial export of cargo through Bluff on MSC occurred in November 2018.
The fourth potline at New Zealand Aluminium Smelter (NZAS) was officially opened on
6 December 2018. This potline when fully operational will consume an additional
60,000 tonne of alumina and increase aluminium production by 30,000 tonne per annum.

Over the coming year, South Port will be working with NZAS to determine whether there are additional services the Port can provide to handle and/or pack any of this finished cargo into containers for export through Bluff.
The recent completion of the Cold Store environmental loadout area and blast freeze is
already delivering operational efficiencies, improving the safety of the operation while
meeting the expectations of the Ministry of Primary Industries.

Intermodal Freight Centre

The IFC is into its third full year of operation. Initially set up for the receipt, handling and
unpacking of imported goods, containers are now also being packed for export with MDF at this location for shipment through Bluff.
“Serviced by rail from ports, we estimate that on an annual basis the use of this facility has
taken 7,000 truck movements off the road which has delivered improved environmental
outcomes through reduced emissions while also improving the safety of our road networks,”
said Mr Gear.

“There has been increased handling, packing and storage of meat, fish and dairy products
in both the cold store and dairy warehouses during the past six months.”

Maintenance
During the period the scheduled docking of the harbour tug Hauroko was completed in
August, a significant project that occurs every five years. This occasion involved the
removal and overhaul of one Voith unit (propulsion/drive system), a complete strip down of a main engine, hull painting / repair work and replacement of a stern fender.

Historic Brick Walls Discovered In Invercargill Central Development
Business, Invercargill Central
3817 views
Business, Invercargill Central
3817 views

Historic Brick Walls Discovered In Invercargill Central Development

Malcolm Gayfer - Jun 30, 2020

Heritage Properties NZ have exposed the foundations of the first brick building in Invercargill, which was constructed in 1863 under…

Start It Kick Starts Bright Ideas In The South
Business, News
1050 views
Business, News
1050 views

Start It Kick Starts Bright Ideas In The South

News Desk - Jun 29, 2020

COIN South’s Start It course is expected to turn bright ideas in the South into reality. The brand-new free course…

South Port Updated Trade and Profit Guidance
Bluff, Business
1196 views
Bluff, Business
1196 views

South Port Updated Trade and Profit Guidance

News Desk - Jun 29, 2020

On 27 March South Port provided a Covid-19 Pandemic update when the Company made a slight adjustment to its profit…

New Report Reveals New Zealand’s Marketing Blind Spot: The Over 50s
Business, News
1316 views
Business, News
1316 views

New Report Reveals New Zealand’s Marketing Blind Spot: The Over 50s

News Desk - Jun 27, 2020

New Zealanders over the age of 50 represent more than a third of the population, have the highest levels of…

AMI Insurance Stores To be Closed – Proposal
Business, News
1407 views
Business, News
1407 views

AMI Insurance Stores To be Closed – Proposal

Malcolm Gayfer - Jun 24, 2020

IAG is proposing to shut its 53 AMI stores and its remaining State store, and move its 350 staff to…

The Hawthorndale Care Village Plans Unveiled
Community, News
1559 views
Community, News
1559 views

The Hawthorndale Care Village Plans Unveiled

News Desk - Jul 04, 2020

The first images of the proposed Hawthorndale Care Village aged care development have been unveiled. The Hawthorndale Care Village Charitable…

City Block Redevelopment Receives $10 million Government Funding Boost
Community, News
1265 views
Community, News
1265 views

City Block Redevelopment Receives $10 million Government Funding Boost

Aimee Wilson - Jul 04, 2020

A day after the announcement that $10 million of Government money was heading south for City Block, developer Scott O’Donnell…

Southland Charity Hospital Launches Buy A Brick Campaign
Community, News
1676 views
Community, News
1676 views

Southland Charity Hospital Launches Buy A Brick Campaign

News Desk - Jul 04, 2020

Blair Vining reckoned if everybody in the south bought a brick, together we could build a hospital. So, we’re going…

Exciting Times For Southland Softball Association
News, Sports News
929 views
News, Sports News
929 views

Exciting Times For Southland Softball Association

Aimee Wilson - Jul 04, 2020

Participation in softball has been growing at such a rate over the past 5 years, there is no wonder Invercargill…

Strong Caps Remarkable Rookie Year with ILT Senior Sportsperson Award
News, Sports News
204 views
News, Sports News
204 views

Strong Caps Remarkable Rookie Year with ILT Senior Sportsperson Award

Southland Sports News - Jul 04, 2020

Corbin Strong’s outstanding first year as an elite cyclist has been recognised with the ILT Senior Sportsperson of the Year award. The…