22 Aug 2014

Port of Tauranga hints at future profit

10:02 am on 22 August 2014

Port of Tauranga is hinting at a much stronger profit this financial year than the 30 percent fall it reported for the year ended June.

Ports of Tauranga chief executive Mark Cairns said log volumes grew in the first month of the year.

Ports of Tauranga chief executive Mark Cairns said log volumes grew in the first month of the year. Photo: PHOTO NZ

The year-earlier result was boosted by a one-off profit and the underlying result was up a little more than 1 percent.

[audio http://www.radionz.co.nz/national/programmes/businessnews/audio/20146659/port-of-tauranga-hints-at-a-much-stronger-profit-this-year Listen to more on Morning Report

The company's chief executive Mark Cairns said the current year had begun well.

"We did have a very strong year for logs, up 12 percent, but with the market in China softening and inventories building, I think the pricing has come back about 25 percent. Just recently, it's up a little bit," he said.

"Counterintuitively, in the first month of the year, the volume's actually continued to grow. So we are expecting a bit of a short-term reduction in volumes but I don't think it'll be as significant as some people are expecting."

Mr Cairns said the company expected to post another record for containers this year and that its stake in PrimePort Timaru was developing ahead of expectations.

He said the company hoped its new freight hub at Rolleston would be operational in early 2015.

The market shrugged off the essentially flat result, with Port of Tauranga's shares rising 60 cents to $15.90 yesterday.

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