South Port holds dividend
AUCKLAND: South Port New Zealand reiterated plans to maintain its dividend this year, even as earnings are squeezed by increased spending to repair and replace ageing assets.
Chairman Rex Chapman reaffirmed guidance for earnings in the year ending June 30 to be about 10% lower than the record $9.66 million reported last year. That was due to the added cost of updating assets near the end of their life. The board also said it planned to keep paying the dividend of 26c, representing a gross yield of 3.5%.
‘‘For the moment trade forecasts for the port remain steady, with forestry exporters still predicting strong demand in China, India and Japan,’’ Mr Chapman said.
‘‘The softening in the forecast farmgate milk price for the coming season could have an impact on farm inputs, such as fertiliser and stock food, but this will not be known until later in the year.’’
The board will update guidance at the firsthalf report in February. The port operator held its annual meeting in Bluff yesterday, where shareholders were to vote on whether to elect Rick Christie and Thomas Foggo to the board. Directors are also seeking a 3%, or $8100, increase in the pool for their fees to $278,100.
Environment Southland owns 66% of the country’s southernmost port. The regional council’s South Port subcommittee meeting in August was told ageing infrastructure needed ongoing maintenance but that the port did not have any major programmes on the horizon.
The shares last traded at $7.40 and have gained 23% so far this year, outpacing a 2.4% increase in the muchlarger Port of Tauranga.
Mr Chapman said yesterday particularly strong Chinese demand for logs continued to support operations and bulk cargo was set to remain the cornerstone of its business. Expanded production at the Tiwai Point aluminium smelter would also provide more work.
The port’s intermodal freight hub in Invercargill is tracking ahead of expectations and South Port said it was an important element to grow and diversify revenue. The company was also investigating how it could secure distribution relationships with Mataura Valley Milk and Plaman Global, which plans to mine black diatomite near Middlemarch.