Coronavirus pulls down Port's profit guidance
Friday 6 Mar 2020Port of Tauranga has reduced its full-year profit guidance as coronavirus continues to cause trade uncertainty. New Zealand’s largest port, announcing a 1.4 per cent decrease in group net profit for the six months to end December, said its revised full-year profit guidance was $94-$99 million compared to the previous $96-$101m.
Chief executive Mark Cairns said the full impact of coronavirus on trade had yet to be determined. Log exports had been hardest hit, down 8.4 per cent to 3.4m tonnes, with volumes already impacted by lower international prices and demand since mid-2019. Log inventories in China had surged with resulting shipping cancellations and delays, a situation the port expected to continue into next month.
“Port of Tauranga continues to be well-positioned to weather market fluctuations as its customers are primarily large forest owners, who are less susceptible to commodity pricing volatility than smaller, at-the-wharf-gate log exporters,” Cairns said. However, the trade outlook for the second half of 2020 remained uncertain and dependent on the length of the market shutdown in China and any slowdown in other countries taking extreme measures to manage the coronavirus risk.
Chairman David Pilkington noted the revenue increase despite the 4.2 per cent dip in total trade, and said the longer-term outlook remained positive for cargo growth, particularly in containers. Container volumes rose 3.4 per cent to 642,209 TEUs. However global commodity cycles resulted in exported cargo dipping 2.6 per cent to 8.6m tonnes.
Source: NZ Herald
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