Announcement
HALFYR: SPN: South Port accelerates into 2021
03:33pm
SPN
12/02/2021 15:33
HALFYR
PRICE SENSITIVE
REL: 1533 HRS South Port New Zealand Limited
HALFYR: SPN: South Port accelerates into 2021
NZX/MEDIA STATEMENT
12 February 2021
South Port has recorded a strong start to the 2021 financial year due to an
excellent operational performance.
"Of our various business activities, containers, cold storage and the marine
operations were standout performers in the half-year to 31 December," said
South Port Chairman, Mr Rex Chapman.
"This result was secured based on the Port's bulk cargo volumes which were
consistent with the corresponding period of 2019 and remain the backbone of
the Company's cargo mix."
"COVID-19 continues to play a significant factor in trade lanes worldwide,"
he added.
"Globally, restrictions placed at borders, lockdowns and the lack of trained
staff to work at ports on cargo/container vessels has negatively impacted the
efficiency of the supply chain."
"This will take a number of months to improve and will continue to create
uncertainty in the marketplace until there is a successful rollout of a
vaccine."
"Given these realities, South Port's operating revenue and net profit after
tax for the first six months of FY21 are reassuringly strong."
Revenue for 1H21 was $23.30 million, up 8.4% (1H20 $21.60 million) and NPAT
was $6.1 million, a 33% lift in profitability (1H20 $4.6 million).
Several factors impacted on this record interim result including:
- Record container throughput.
- Higher returns from cold storage as a result of increased storage and blast
freezing activities.
- Increased marine activity.
- Timing - some container volumes have been brought forward due to supply
chain issues.
Post-balance date, on 14 January 2021, Rio Tinto announced a new electricity
agreement with Meridian Energy that allows New Zealand's Aluminium Smelter
(NZAS) to continue to operate the Tiwai Point Aluminium Smelter until 31
December 2024.
"This extension provides certainty to the Port and the region for the next
four years and will allow planning to start in earnest for a potential future
without NZAS," says Mr Chapman. Rio Tinto has stated they will continue to
negotiate with the Government to secure a fairer transmission pricing
agreement in the coming months.
"NZAS represents approximately 30% of South Port's cargo flow and 20% of
NPAT."
INCREASED CARGO
Total cargo activity was 1,720,000 tonnes compared with 1,687,000 tonnes in
the prior year interim period.
"This represents an increase in cargo flows of 33,000 tonnes or 2%," said Mr
Nigel Gear, South Port's Chief Executive. "There was a pleasing increase in
log volumes (+125,000) however other bulk cargoes were negatively impacted
with fertiliser (-20,000), woodchips (-23,000) and NZAS cargoes (-70,000) all
down from the prior half year.
Containerised cargo increased 28% to 27,000 TEU (FY2020 21,000 TEU). The
main increases were reflected in dairy, timber and refrigerated cargoes.
A new reefer tower was recently constructed and has been operational since
late January 2021. This tower has created additional capacity for
refrigerated containers and provides storage efficiencies in the terminal.
Record volumes of dairy products have been received and packed at the Port
during the last quarter of 2020 for Open Country Dairy. "This is the result
of the commissioning and operation of the new third dryer at Awarua and the
improvement of market conditions for dairy products."
"International container supply chains have been significantly disrupted due
to the COVID-19 pandemic," said Mr Gear. "This has led to an increase in the
transshipment and supply of empty containers through the Port as a result of
a temporary reconfiguration of the Mediterranean Shipping Company's Capricorn
Service in New Zealand."
Future-proofing of the Port continues with new storm bollards successfully
installed on Berth 4 and currently under construction on Berth 8. "These new
bollards will significantly improve our safety margins for the mooring of
larger vessels currently calling at the Port."
The installation of the Impressed Current Cathodic Protection (ICCP) system
on the Access Bridge continues to make excellent progress. Seven bays (of
14) have been successfully completed with at least two further bays to be
upgraded in this financial year.
STRATEGIC PROJECTS
South Port has undertaken extensive consultation and completed several
environmental assessments in preparation for an application for a resource
consent for a channel improvement project which is expected to be lodged by
March 2021.
The Port plans to remove the high spots within the channel to achieve a
deeper draft to provide for a safer transit through the channel and increase
the efficiency of loading vessels. A final decision about the project and
the timing of it will be subject to a resource consent being granted.
The Port is investigating the purchase of a 65 tonne bollard pull (BP) tug.
The Port currently operates two tugs with a combined BP of 75 tonnes. "A new
tug will increase our total capacity to 105 tonnes BP which would provide
greater safety margins for the larger vessels that are now calling at the
Port."
OUTLOOK
COVID-19 will continue to influence the supply chain and create uncertainty
in the marketplace until there has been a successful rollout of an effective
vaccine worldwide.
"The export log market into China is performing well with higher prices for A
grade logs being received and low levels of inventories which bodes well for
sales of New Zealand Radiata softwood into this region," said Mr Gear.
"The dairy industry forecast for the coming season is also very positive with
early signals of $6.90 to $7.50 per kilogram of milk solids for the current
season."
"The impact of the COVID-19 pandemic on restaurants globally, together with
an improvement in the utilisation of the existing storage space, has
increased the level of refrigerated cargoes held in our cold stores."
"This, coupled with the high utilisation of our new blast freezer, has
improved the returns on this facility at the Port."
"There is still however some uncertainty in other cargoes and market
destinations for New Zealand goods, especially in economies impacted severely
by COVID-19."
Based on all known factors at the date of releasing its 2021 interim result,
South Port estimates that its full year earnings should fall in the range of
$10.00 million to $10.50 million (FY2020 - $9.43 million).
DIVIDEND
Anticipating this year end result, the Directors have declared a fully
imputed interim dividend of 7.50 cents per share (1H20 - 7.50 cents) payable
on 8 March 2021. In the event that the FY21 year-end profit falls within the
above forecast range, the Directors are confident that the full year dividend
payment will be consistent with the previous year.
ENDS
FOR FURTHER INFORMATION PLEASE CONTACT:
Mr Nigel Gear
Chief Executive
South Port New Zealand Ltd
Tel: (03) 212 8159
Email: ngear@southport.co.nz
Mr Rex Chapman
Chairman
South Port New Zealand Ltd
Mobile: 027 454 8455
Email: rex.chapman@cplaw.co.nz
MEDIA:
Warren Head
Head Consultants Ltd
Mobile: 021 340 650
Email: headconsultants@xtra.co.nz
Kirsten Hoyle
Communications Advisor
South Port New Zealand Ltd
DDI +64 3 212 6050 | P +64 3 212 8159 | F +64 3 212 8685 | M +64 27 253 9112
Email: khoyle@southport.co.nz
End CA:00367508 For:SPN Type:HALFYR Time:2021-02-12 15:33:53
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