South Port is reporting net profit after tax of $3 million for its half year result, down more than 40% year-on-year due to reduced cargo volumes and inflationary pressure.
The six months to December 31 result compares to a NPAT of $5.2m in the same period last year.
Total cargo activity for the period was down 14% to 1,488,000 tonnes.
Increases were registered in cement (+14,000t) and timber (+17,000t), however other cargoes were negatively impacted with woodchips (-72,000t), logs (-68,000t), alumina (-43,000t), stock food (-39,000t) and fertiliser (-37,000t) down in comparison to the prior half year.
There were 108 large vessel calls registered for the period compared to 139 the year prior, a direct reflection of the reduced cargo flows through the Bluff-based port.
However, container volumes are showing some signs of recovery with 21,000 twenty-foot equivalent units handled through the terminal compared to 18,000 TEU in FY2023.
Chair Philip Cory-Wright says deterioration in trade is common across the port sector and NZX-listed South Port is not immune.
“The agricultural and forestry sectors have been under significant pressure for several months due to poor market conditions, which is negatively reflected in most of our import and export bulk cargoes.”
Outlook
Global events continue to create uncertainty and provide challenges to South Port’s business operations, Cory-Wright says.
“The wars in both Ukraine and the Middle East are continuing to impact marketplaces, which has a flow-on impact on commodity prices and volumes handled through the Port.
“The container supply chain is facing additional challenges with the war in the Middle East escalating into the Gulf of Aden and the Red Sea, preventing shipping lines gaining access to the Suez Canal, resulting in longer transit times to market.”
The company has invested significant capital in recent years to upgrade the Island Harbour and develop infrastructure for future growth.
This includes the deepening of its entrance channel to allow for greater payloads, improve the supply chain and provide safer transit for vessels calling at the port.
The port sees a number of opportunities on the horizon an upgraded Fonterra dairy payout forecast. In addition, it says good progress appears to have been made in negotiations with Rio Tinto over long term supply arrangements for the NZAS aluminium smelter.
The Government has also announced a new fast track consenting process which may assist projects such as Ngāi Tahu’s proposed Hananui open ocean aquaculture farm at Stewart Island.
“These are unlikely to have material effects on South Port this financial year but do provide some reasons for optimism that the current downturn will be short lived,” the port says.
South Port estimates that its full-year earnings should fall in the range of $7.3m to $8m (FY2023 – $11.7 million).
