Port of Tauranga profits up despite freight decline

Cruise ships at the Port of Tauranga. Photo / Bay of Plenty Times.

Port of Tauranga, New Zealand's biggest export port, posted a 2 per cent gain in first-half profit by reining in costs as freight volumes fell, eroding revenue.

Net income was $23 million, or 17.2 cents a share, in the six months ended Dec. 31, from $22.5 million, or 16.8 cents a year earlier, the company said in a statement today. Sales fell 9 per cent to $67 million, while operating expenses declined about 11 per cent to $36 million.

The port company said full-year earnings would be little changed from last year, when it had a profit of $45 million. While it has benefited from increased volumes of forest product exports, the container market is likely to remain "volatile" with about 10 per cent of global container capacity currently idle.

"Despite reduced trade, we have achieved an increase in earnings, largely by cost reduction and without an increase in customer tariff rates," said chairman John Parker. "In the face of a 9 per cent reduction in revenue, this is a very satisfactory result and a great credit to all staff."

The company will pay an interim dividend of 9 cents a share, unchanged from a year earlier. Shares of Port of Tauranga rose 0.3 per cent to $7, having earlier traded at $7.04. In the past six months the stock is up about 10 per cent.

The net profit of $23 million was about in line with Forsyth Barr analyst Jeremy Simpson's forecast of $22.7 million.

Tonnage through the port fell 5 per cent to 6.5 million metric tons, with container volumes falling 18 per cent. Export tonnages of logs jumped 31 per cent and dairy shipments climbed 44 per cent. The port is one of a pared down list of exit points Fonterra has chosen to use for its exports.