SPN - South Port

[glennj]

Ta for your views MacDunk. We are all in the game to make money. Was offering you another string for your bow. (Often a bit of a wait is
well worth it)
Am always watching the port companies so we will see what transpires.
One thing we do have in common is that we both hold PGG

[Fish Broker]

Their first half 05 result is expected to be announced tomorrow - and the share price has been firm for the last 4 months on little news other than a reshuffle on the board and a 5% stake (which I think was originally Infratil's) changing hands again.

Why the firmness in price? - are people expecting the lost shipping has been replaced?? or are buyers anticipating another special dividend which the balance sheet could allow.

Then again what about that additional capex that was spent and that we were told about last year to better service the container lines.

Just wondering what people think.

[Fish Broker]

South Port Result Follows - does the final paragraph mean we may be in line for a special dividend or another capital return???

Text of the release as extracted from NZX site, follows:

***********************************************



Company Code Released Type Headline
South Port New Zealand Limited (NS) SPN 4 Feb, 2005, 09:23 HALFYR SOUTH PORT INTERIM RESULT
Full Text of Announcement
HY to 31/12/2004 $1.091m ($1.310m) Div 1.75cps


CONSOLIDATED OPERATING STATEMENT FOR THE HALF YEAR ENDED 31/12/2004

Unaudited (NZ$000)

Current Period (Previous Corresponding Period)

OPERATING REVENUE

Trading revenue 6,293 7,747
Other revenue 210 12
Total Operating Revenue 6,503 7,759

OPERATING SURPLUS (DEFICIT)
BEFORE TAXATION 1,543 1,961

Less taxation on operating profit (452) (651)

OPERATING SURPLUS (DEFICIT) AFTER TAX 1,091 1,310

Extraordinary items after tax - -

Unrealised net change in value of investment properties - -

NET SURPLUS (DEFICIT) FOR THE PERIOD 1,091 1,310

Net Surplus (Deficit) attributable to minority interests
- -

NET SURPLUS (DEFICIT) ATTRIBUTABLE TO
MEMBERS OF THE LISTED ISSUER 1,091 1,310

EPS 4.16cps 4.99cps

Final Dividend: 1.75cps
Record Date: 04/02/2005
Payment Date: 04/03/2005
Imputation tax credit: Fully imputed



Lower First Half for South Port


Under-utilisation of container handling infrastructure at Bluff caused by shipping industry cutbacks in response to soaring charter rates has continued to impact on South Port New Zealand Ltd into the 2005 year.

As signalled in the 2004 Annual Report and again at the 2004 Annual Meeting, the 2005 year is shaping as a "more challenging trading period for the Company," says the Chairman of South Port, Mr John Harrington.

South Port benefited from strong growth in containerised cargo in the half-year to 31 December 2003 as a result of the Trans-Tasman Butterfly Service calling at Bluff on a weekly cycle.

This service ceased in January 2004 and as a consequence, containerised cargo volumes have shown a decrease. "The inability to date to attract a replacement Trans-Tasman shipping service or coastal container linkage has meant that South Port's marine and cargo handling resources have not been fully utilised."

Secondly, as a direct result of high foreign exchange levels and increasing ocean freight costs, the export of logs through South Port ceased at the start of the current financial year.

"Until such time as these economic factors show improvement, key exporters of logs will be unable to achieve acceptable margin levels and therefore be forced to extract value from their product in the domestic market," says Mr Harrington.

"On a more positive note, firm import tonnages were registered in fertiliser and petroleum products while export volumes saw lifts for sawn timber, medium density fibreboard, pebbles and general cargo."

Recorded cargo volumes at 1,014,000 tonnes in the six months ending 31 December 2004, fell 10% from 1,129,000 tonnes in the previous corresponding period.

Operating revenue was $6,479,000, compared with $7,759,000 in the first six months of the 2004 year.

Earnings before interest and taxation were $1,732,000 ($2,152,000 in 2004). Net profit after taxation at $1,090,000 ($1,310,000 in 2004) is back 18% and is regarded as satisfactory by Directors when all external factors are taken into consideration. Included in the interim profit is a one-off property transaction gain of $186,000 (nil in 2004).

Reflecting a more difficult trading outlook, the directors have declared a fully imputed interim dividend of 2.25 cents per share (2.75 cents in 2004), payable on 5 March 2005.

South Port's largest cargo volume customer, New Zealand Aluminium Smelters (NZAS) is evaluating several options related to its long-term energy requirements and some could potentially have a positive impact on South Port. NZAS currently moves over 1 million tonnes of raw material and finished metal annually across the South Port owned Tiwai W

[craic]

I was in this on for years and did reasonably well but about a year ago I decided that it didn't really have anywhere to go and my money was better spent elsewhere. That is still the situation.

[JAMP]

Full-year announcement to 30 June 05 is pending. I am guessing that we will see a release early next week.

Interesting 11c rise in the shareprice today. Low volume, so I am thinking it is but a coincidence. But then again, perhaps the directors have stopped assessing "the most effective use of the Company's strong balance sheet."

Regards JAMP
NZX: AIA CHA LPL MCH MVN NOG PPG RBD SAN SKX SPN
NZAX: CVT
Unlisted: BRK

[winner69]

That 11 cent rise was shortlived jamp

Not an entirely inspiring result was it

Looks like $2M a year is their lot and so dividend likely to remain at 6.5 cents for some years

So waht do you pay for a 6.5 cents dividend stream these days?

Looks like 125 and the market is happy with a miserable 7.7% gross yield

With downsides outweighing potential upsides not for me

About the same yield as Snoopy's LPC ... some consistency there

[JAMP]

Perhaps too much parochialism, and not enough common-sense w69.

I wasn't too disheartened by the result. They will never set the world alight, but they have the infrastructure in place ready to burst into action in the event a new feeder service to the hub (Lyttleton?) is established. Their day in the sun will come.

Regards JAMP
NZX: AIA CHA LPL MCH MVN NOG PPG RBD SAN SKX SPN
NZAX: CVT
Unlisted: BRK

[glennj]

For those that follow this stock & I do the result was very much as expected. It's not a world beater but it has a sound dividend stream with the prospect of periodic special dividends.

In the medium to longer term I see good upside prospects for this stock & little downside. The rumours that the smelter, a major customer, might close are just that. I see they have secured an agreement sheltering them from harmful effects of the Kyoto protocol. Loss of the overseas earnings and jobs if the smelter were to close would be catastrophic so I can't see any government letting it happen.

With a drop in the dollar SPN will generate considerably more business. Forestry cargoes have recently resumed despite the high dollar & wind farming developments will deliver unexpected cargoes.

I believe this is a stock for the buy & hold brigade rather than traders. Steady divs now with the strong chance of capital appreciation as well in the medium to longer term.

[JAMP]

I had a read of the SPN Annual Report 2005 last night. I rate it well - it was well laid out and an easy read. I have taken the liberty of quoting two items from the outlook section in the "wordy bit".

quote:<center>The Company is conscious of the strength in its balance sheet
and
may include the involvement of South Port in other elements of the transport and distribution sector.</center>
<div align="right">Source: Pg 9, SPN Annual Report 2005</div id="right">

I have no problem with the company having a strong balance sheet. They are aware that it is probably a little too strong to deliver optimum benefit to shareholders. The bit that piqued my attention was the fact they are exploring the potential for opportunities elsewhere in the transport and distribution sector.

I for one would be mighty keen if such exploration eventuated in them taking a stake in a coastal shipping operation.

To my way of thinking, utilising their balance sheet strength in such a manner would put South Port in a beneficial position (established feeder service) when the widely anticipated rationalisation of export shipping routes eventuates. It would also communicate to exising and potential clients that South Port is serious about being the preferred gateway for Southland goods leaving Southland.

Regards JAMP
NZX: AIA CHA LPL MCH MVN NOG PPG RBD SAN SKX SPN
NZAX: CVT
Unlisted: BRK

glennj, as an aside your middle initial isn't "O" perchance?

[glennj]

I've mentioned in earlier posts that I am or have been a holder in various port companies including SPN.