Port mulls merger plan

The board of Lyttelton Port of Christchurch (LPC) will meet in February to consider a report by investment bank Antipodes on a possible merger with Port Otago.

The port is not releasing the report, which was received by both boards yesterday.

"LPC will be appointing an adviser to work with management on the review of the report during January 2010," the company said.

The potential merger is being closely watched by many people in the logistics industry after attempts to bring Ports of Auckland and Port of Tauranga together failed.

On Tuesday LPC said it had formally applied for consents to dredge its harbour for larger ships. Port Otago is also progressing with plans to handle larger container ships.

There is concern that ports will overcapitalise as they compete to attract the next generation of container ships, which may call at only one or two ports in New Zealand.

LPC said that it would update investors on the merger issue when it reports interim results at the end of February.

On October 29 LPC said that the first three months of this financial year were in line with budget, although quite a bit behind the same period last year.

LPC chairman Rodger Fisher said yesterday that the current financial year remained very challenging.

"The results for the five months to November 30, 2009, indicate that the trading volumes to the half-year will continue to be below the same period last year."

Net profit after tax (Npat) for the six months to December 31 was expected to be in the range of $3.2 million to $3.5 million.

"We do anticipate the volumes will increase in the latter six months of the financial year," said Fisher.

"Our current expectation is for the full year's Npat to June 30, 2010, to be in the range of $9 million to $10 million. However, we will continue to keep the market informed if this anticipated result varies due to changing economic conditions."

LPC is 78.16 per cent owned by Christchurch City Holdings, the commercial arm of Christchurch City Council. Port Otago owns 15.48 per cent and the balance is minority shareholders.

- NZPA