Port Nelson declares additional dividend as rising cargo volumes boost operating profits

Profits continue to rise for Port Nelson and its shareholders as its chairman remained "cautiously optimistic" of future growth.

Steady cargo volumes have contributed to Port Nelson delivering an operating profit of $30.5 million for the 2018/2019 financial year, an increase of $3.4m compared to the $27.1m reported in 2018.

The net profit after tax was $15.3m, which included a $2.6m increase in the valuation of investment property.

Port Nelson chairman Phil Lough made the announcement at the company's annual general meeting on Wednesday. 

With Nelson City Council and Tasman District Council each owning 50 per cent of the port, the results offered some positive news for the region's ratepayers.

Due to the steady growth of the region's exports through the port and the promising returns on investments, Lough announced an additional $800,000 dividend payment would be made to shareholders, on top of the full-year declared dividend of $5.5m.

However, this was down on last year's $1.5m dividend payment.

The 2019 financial performance was further evidence of the Port understanding the regions and its users' requirements and ensuring that these were being supported, Lough said via a statement. 

However, he was "cautiously optimistic" about the next few years, with a recent cooling of export log prices, shipping lines continually seeking to gain efficiencies, and the labour market remaining tight.

Cargo volume was up on the last financial year to 3.6 million tonnes,which Lough said was buoyed by a growth in log volumes driven by increased Chinese demand and the early harvesting of wood instigated by the forest fires earlier in the year.

Container throughput was marginally down compared to last year, due to a change in shipping services resulting in fewer empty containers transhipped through Nelson.

However, the weekly Pacifica coastal service has introduced a larger vessel to absorb trans-shipment export volumes while container visits for Maersk's Northern Star service and CMA CGM's PAD service returned to the region for the peak pip fruit season through winter.

Exporter utilisation of all shipping services was strong.

Apple exports remained consistent with previous year's volumes, however drought conditions impacted crops causing these to remain below expected growth forecasts for the financial year.

Overseas demand for premium New Zealand wine continues to stay healthy and the resulting growth in dry goods imports and wine exports through Port Nelson had enabled the expansion of QuayConnect wine distribution and storage business.

With sustained export log growth, Port Nelson was working to make more efficient use of existing log storage yards including the recently reclaimed Calwell Slipway area, the Graham Street plot and further investigation into other opportunities.

Ahead of receiving larger vessels, Port Nelson continued to make significant investments including the new Huria Matenga II, a Damen 2411 tug with 70-tonne bollard pull capacity, the $20million redevelopment of Main Wharf North, recently awarded to contractor McDonnell Dowell, and innovative technologies to improve port safety and operational sustainability and productivity.

Lough commented that the Port continues to deliver on its strategic objectives growing from strength to strength.

The port also farewelled former chief executive Martin Byrne, who resigned in July after 15 years' service.

His replacement, Hugh Morrison, commenced his role on September 9.

 - Stuff

Last updated 16:41, Sep 18 2019