4 Nov 2011

Port Lyttleton's full year profit may jump by as much as 25%

7:04 am on 4 November 2011

Port Lyttelton is picking its full year profit may jump by as much as a quarter, driven by more containers and logs passing across its wharves, offsetting a drop in cruise ships.

Despite the disruption of fixing wharves and seawalls damaged by earthquakes, the port is forecasting a profit of between $13 - $15 million in the 2012 June year, compared with $12.1 million last year.

At the port's annual meeting in Christchurch on Thursday, chairman Rodger Fisher told shareholders it made an underlying profit of $4.1 million in the three months to September.

He said new shipping services are contributing significantly to container growth.

Mr Fisher said that while coal was on par with the same time last year, log exports rose significantly, by 32.4% to more than 85,000 tonnes, although volumes are likely to ease as exports to China drop.

Cruise ship visits this summer will decrease from 64 to three, with a forecast reduction in annual gross revenue of $3 million less associated costs, although this will be included in the port's insurance claim.

Mr Fisher says the port may have to borrow money to fix its wharves because it's in dispute with its insurer, Vero.

He says Vero's refusing to pay $20 million to pay for coal loading facilities needed by Solid Energy, one of the port's biggest customers, and business interruption claims.

The port says legal action against Vero is an option.

Vero has paid $35.7 million so far, but that's a fraction of the some $300 million plus the port is thought to have sustained after three major quakes.