Port delivers divident boost

Ports of Auckland had good news for shareholders and bad news for the country today.

A buoyant economy delivered a 25 per cent increase in dividends to shareholders in the year to June 30, but the country's busiest port, where early soundings on the whole economy are taken, pronounced July flat.

Container volumes grew just 1 per cent in the month from last year.

Even allowing for the slow time of the year -- the port calls June and July the horrible Js -- chief executive Geoff Vazey said the high exchange rate was affecting manufactured exports.

"We are also seeing the effect of a fragile Auckland import market due to weakening demand as the economy slows," he said.

The port reported a 2 per cent rise in net profit to $47.6 million on a 7 per cent rise in sales. The bottom line was affected by $8.6 million of interest costs after last year's capital repayment increased debt.

Earnings before interest and tax rose 9 per cent to $76.3 million. The 19c a share final dividend declared comes tax paid and takes total dividends to 34c a share.

The port pays out 76 per cent of profit and the payment per share has risen in percentage terms because the number of shares declined with the capital repayment.

The main beneficiary is 80 per cent shareholder Infrastructure Auckland.

The infrastructure funding body and other shareholders are also likely to see proceeds from the sale of Westhaven and Hobson West marinas expected by the middle of next year. Analysts could not put a price on the marinas because earnings were not separately disclosed.

Container volumes have doubled since the port listed on the share market in 1993, and the cost of handling a container has fallen by 24 per cent. A $100 investment in the port in 1993 was worth $666 today.

Mr Vazey and chairman Neville Darrow traversed a range of issues at today's meeting. The port is focusing on freight and container handling assets at the harbour's eastern end, and avoiding Auckland traffic jams by moving more freight at off-peak times to so-called inland ports in south Auckland, where it is also targeting new business from manufacturing exporters.