Broker unrepentant over port call

By PAM GRAHAM

Broker Forsyth Barr says a research report wrongly predicting that Port of Tauranga would lose business was its view at the time.

Port of Tauranga chief executive John Mayson is angry about the pre-Christmas report, which he says was irresponsible, badly timed and incorrect.

He has raised it with the NZX. The NZX has so far not made any comment to a query from the Business Herald.

The report, dated December 12 and released December 15, said there was a high probability that Port of Tauranga would lose P&O Nedlloyd's dairy-related export volume. It predicted that as many as 44,000 container movements could be lost.

Instead, Port of Tauranga was chosen for a new P&O South-east Asian express service with Napier, Lyttelton and Port Chalmers. Ports of Auckland was cut.

Mayson has estimated Tauranga will gain about 30,000 container movements from the change.

Port of Tauranga shares, which fell 5c on December 16 and 4c on December 17, rose 17c on December 18 when the news was announced.

A New Zealand Press Association report on December 17 also predicted that Tauranga would lose business relating to Fonterra.

Forsyth Barr head of research Rob Mercer said his company had published what it thought was the most likely outcome.

"We still actually believe what we published was the most likely outcome," he said.

The company had received calls from investors who had had wind of the issue and had put its view into writing, rather than just have conversations with clients.

He said the view had been formed over a number of months and the company was conscious that the outcome could have been different.

Mayson also takes issue with the report's view that Ports of Auckland was better placed to handle ships capable of carrying 4100 standard-sized containers.

He said Forsyth Barr had been told it was not an issue. The ships had been to Tauranga and they were not being used for the new South-east Asia service.

The Forsyth Barr report said Port of Tauranga was facing a difficult year because of tough trading in the forestry sector.

What was said

* Forsyth Barr research report, issued December 12.

"P&O Nedlloyd, and its consortium partners, are due to announce the ports it will use for its Fonterra dairy export volumes. We believe P&O will choose Ports of Auckland and Napier for its North Island port calls and will drop Port of Tauranga and Lyttelton Port in favour of Napier and Dunedin."

Recommendation: Reduce Port of Tauranga. Buy Ports of Auckland