Lyttelton Port tied up in flat earnings

Lyttelton Port's revenues grew strongly but maintenance will be a drag on performance.

Profits at Lyttelton Port would remain flat for the next three years, the company warned as it announced a full-year profit unchanged from last year.

Despite difficult trading conditions - including major rises in fuel and electricity - the port reported a net profit of $10.1 million for the year to June 30 - flat on last year. The result included a $1.8 million downwards revaluation of its assets.

Revenue jumped from $66.5 million to $79 million driven by a 5.6 per cent increase in container volumes and a hike of 16.2 per cent in coal volumes.

Lyttelton Port chairman Barney Sundstrum said it was a pleasing result given the difficult trading year.

The port's fuel costs rose 46 per cent, by $500,000, this year and electricity costs rose 11 per cent.

Port chief executive Peter Davie said he expected profits to remain flat for the next three years as maintenance costs stayed high and it finished its $90 million upgrade of its oil berth, straddles and cranes.

"We will expect profit to pick up after we have finished the upgrade," he said.

The port forecast earnings before interest, tax, depreciation and amortisation (ebitda) would drop slightly by $1 million, from $28 million this year, as a result of higher spending on maintenance.

The dividend was cut to 5c from 11c last year.

"The dividend last year was particularly high compared to previous years.We need to balance shareholder needs for dividend revenue and the needs of the port to provision for capital programmes to provide future earnings," said Sundstrum.

The port was confident it would retain the services of major shipping line Maersk, which would announce a rationalisation of its port calls to New Zealand in a month.