Ports of Tauranga

[Joshuatree]

BTW craigs have a value of $3.43 (x5=$17.14) currently with a downgrade/neutral bias(overvalued on fundamentals.S/P down 5c to $3.80 atm.

[babymonster]

ports and airports are bond proxy, so no surprised the drop.. good company tho..

[percy]

Hmm... I believe they will... they have over the past 25 years I have been an investor.

POT is my oldest holding and currently shows in my portfolio at a return of 17.7%pa compounding over that time. These days it pays me annual dividends well in excess of what I paid for the shares back then.

My view is the Company has "moat" like qualities and benefits greatly in that it is governed as a commercial company (unlike its peers) and has therefore evolved into NZ's leading port.

So I think it will grow, as it has done since it has been a listed public company.

How much growth there is likely to be in the short term and whether at the current share price it's a buy is another matter.

I'm happy to hold... take my dividends... and receive a nice capital return over the next four years... the growth will come and may be when Mr Market has a bout of depression in the future I'll add to my holding!

I agree with you "moat" view.
I agree it is NZ's best port.
I agree it is really NZ's "hub" port.
I disagree with the market valuing approx 5% to 10% growth with a PE of 33.ie 33 years of earnings.
Sold,but did not like doing so.I am more focussed on companies whose growth rate is the same or lower than their PE.
FPH I also sold as I thought they would struggle to get more than 17% growth, and their PE was more than twice that at 36.

[malus]

I agree with you "moat" view.
I agree it is NZ's best port.
I agree it is really NZ's "hub" port.
I disagree with the market valuing approx 5% to 10% growth with a PE of 33.ie 33 years of earnings.
Sold,but did not like doing so.I am more focussed on companies whose growth rate is the same or lower than their PE.
FPH I also sold as I thought they would struggle to get more than 17% growth, and their PE was more than twice that at 36.

Thanks for sharing your sales logic Percy.

[percy]

Thanks for sharing your sales logic Percy.

Logic is wrong.!!!!
Meant I am looking for companies whose eps growth rate is the same or higher than their PE.
So a company whose growth rate is 12% to 14% and their PE is 12 or lower is a buy.
Companies whose PE is a lot higher than their growth rate I am selling.ie growth rate is 10% and their PE is say 20 I am selling.
I will admit I have not sold AIA whose PE is about 30 and whose growth rate will be under 10..
Must be an exception to ever rule.?,lol.

[Joshuatree]

Annual G meeting started at 1pm.S/P up 10c atp.

[babymonster]

should have online asm like airnz

[babymonster]

Annual G meeting started at 1pm.S/P up 10c atp.

fade away quickly... 1st quarter is not as good as people expected, maybe

[Marilyn Munroe]

Port of Tauranga tell us port consolidation and big container ships are coming.

It ain't necessarily so, says the chair of Southport.

http://www.scoop.co.nz/stories/BU161...mall-ports.htm

Boop boop de do
Marilyn

[malus]

A few comments from attending the AGM:

Regarding Rolleston throughput, seems Lyttelton has been self-promoting their inland container arrangements at Rolleston and bagging POTprogress… Mark Cairnes was upbeat, and while not prepared to disclose their site throughput, confidently said “watch this space”.

As to the “hub port” concept and aggregation at Tauranga, it’s all go. Interestingly having facilitated the calling of Maersk 9500 TCUships Mark Cairnes sees an opportunity to act as a hub port for an increasing amount of Australian sourced container cargo. He says the Aussie ports have not yet invested to service these size ships (I see on Port Melbourne web page the largest it has received is a 7500TCU ship), also there is a reduced sailing time for these ships to call at Tauranga and then head directly to North Asia, apparently (something to do with the depth of water around Cape York and theTorresStrait) … not being a mariner I’m not sure how this works, will have to have a closer look at the world map and the sailing lanes these ships use to understand how this comes about.

Interestingly, I was in New Plymouth the previous week at a property investors conference and during bus trip of the local area it was noted that previously busy cool stores aggregating dairy product for export through Port New Plymouth were now little used… the product now dispatched from factory by container to directly to Tauranga under the Kotahi 10 year joint venture.

Both Chair and Management very diplomatic about comment on the Auckland Port situation and its future, however POT Auckland Metro Port handled 260,000 TCU annually (4^th largest container port in the county) and continues to grow as does the train shuttles between Auckland and Tauranga.

The Chair had this to say:

”Our $350 million investment programme, our extensive land holdings in Tauranga, and our rail-linkedMetroPort facility in Auckland, have readied us for this future expansion.

Many of you will be aware of thefuture port study recently undertaken on behalf of Ports of Auckland, in a bid to address the capacity constraints on the existing facilities there.

One of the proposals outlined inthe plan is that of a new mega port on the Firth of Thames to accommodate Auckland and Tauranga cargo growth over the next 50 years.

We have seen no economicjustification for this idea, nor have we been privy to the assumptions that led to it. What we do know is that we can significantly expand the volume of imports we can deliver into Auckland, without adding to traffic flows in downtown Auckland. Ultimately, we believe the market will drive any rationalisation required, and we are about to see the efficiencies that can be had from the arrival of bigger ships."


Log volume through the port eased last year, but is expected to improve to more normal volumes this year.

Touched on key risks, the Chair more generally advising the meeting all public Companies likely to be called upon to give greater risk disclosure in annual reporting. Clearly response to ship grounding is vividly to mind with the Rena incident, and Mark Cairnes spoke of the recent fuel pipeline clean up, whilst this involved a client’s infrastructure, it resulted in a discharge within the port and so this type of risk has been revisited with POT requiring port clients to provide evidence of infrastructural survey and maintenance. After the meeting I discussed cover for geological disturbance with Mark Cairnes. POT are acutely aware of Lyttelton’s claim experience which was complex and resulted in an early advance of $50m odd and a final settlement of $440m some 3 ½ years after the event and he assured me robust arrangements are in place with brokers and insurers/reinsurers.

Generally confident about future growth and space available to expand.

FY 17 profit projection $79-$83m remains “steady” rather than bullish.

I note MM’s comment from Port Southland, yes there is surplus capacity and smaller container ships are available to call and still do,I guess there are questions going forward: which lines can ride out the shipping surplus without going broke and where are the efficiencies to be gained in container shipping? POT believe aggregation and shipping from hub ports are the way of the future and have invested in the space and facilities to cater for that demand.

As to the fully imputed special capital release of 25c per share over the next three years, this will happen subject to no unforeseen capital projects coming along. POT increase borrowings to cover this and allows built up imputation credits to be released to shareholders.

Good crowd turned out to ASM, many locals I suspect, having chatted over afternoon tea, many, including me, went portside by bus for a tour and staff commentary… certainly running a port of that scale is a logistical challenge with many clients to massage and co-ordinate efficiently… however, as a shareholder I do like the 30% net margin POT manages to glean out of its clients.

Spent a couple of days in the Bay of Plenty and spoke to a number locals, interesting to note that all I encountered were supportive of the Port, its growth and vibrancy the Port brings to town.