South Port forecasts flat annual profit as lower dairy payout seen denting demand

South Port New Zealand, the Bluff port operator, expects annual profit to be relatively flat this year as farmers buy less fertiliser, stock food and fuel.

Earnings are expected to be $6.5 million to $7 million in the 12 months ending June 30, from a record $6.68 million last year, the Bluff-based company said in a statement. The port operator today posted a 23 percent increase in first-half profit to $3.3 million as revenue rose 11 percent to $16.2 million.

South Port had record cargo flows of 1.479 million tonnes in the first half of its financial year as it benefited from farmer demand for fertiliser and stock food following Fonterra Cooperative Group's record payout to dairy farmers in the 2013/14 season, as well as consistent log export and petroleum import volumes. Still, it expects the lower dairy payout forecast for this season will probably weigh on port activity in the second half of the year.

"South Port believes it is prudent to project a softening in fertiliser, stock food and potentially fuel consumption by the farming sector," the company said. "This will likely affect the remainder of FY15."

The port operator will pay a first-half dividend of 7 cents per share on March 10, up from 6 cents in the year earlier period.

Shares in South Port were unchanged at $3.95.