FIN INANC NCIA IAL P L PERF RFORMA MANC NCE THE 2013 FINANCIAL YEAR SAW THE COMPANY RECORD AN AFTER TAX NET SURPLUS OF $6.735 MILLION AS COMPARED TO A SURPLUS OF $7.629 MILLION RECORDED IN THE PREVIOUS YEAR. WHILST THIS COULD INITIALLY APPEAR TO BE A DISAPPOINTING RESULT, THE FOLLOWING 2 POINTS DO NEED TO BE NOTED: • FIRSTLY, THE PRIOR YEAR NET SURPLUS INCLUDED A NON-CASH, REVALUATION GAIN OF $1.509 MILLION. AND SECONDLY; • THE 2013 NET SURPLUS WAS IMPACTED BY A ONE-OFF, NON-CASH, TAX ADJUSTMENT OF APPROXIMATELY $537,000. THIS ADJUSTMENT RELATED TO THE COMPANY’S TREATMENT OF PREVIOUS TAX LOSSES. IT IS PLEASING TO REPORT THAT THE COMPANY’S UNDERLYING EARNINGS (OR TRADING SURPLUS) INCREASED BY MORE THAN 20% TO $7.254 MILLION. THIS WAS LARGELY DUE TO FURTHER GROWTH EXPERIENCED BY ASSOCIATE COMPANY NORTHPORT, ESPECIALLY IN TERMS OF EXPORT LOG THROUGHPUT. I WILL COMMENT FURTHER ON THIS SHORTLY. RESULTS FOR BOTH NORTH PORT COOLSTORES (1989) LTD AND NORTHLAND STEVEDORING SERVICES WERE DOWN ON PREVIOUS YEARS WITH THE COOLSTORE BUSINESS IMPACTED BY THE EFFECTS OF A WIDESPREAD DROUGHT WHICH RESULTED IN A LOWER VOLUME OF BUTTER STORAGE. OUR STEVEDORING JOINT VENTURE ALSO EXPERIENCED A LOWER LEVEL OF BUSINESS ACTIVITY. THIS WAS, IN PART REFLECTIVE OF ITS RELATIVE DEPENDENCE ON NON-LOG CARGOS – TRADES WHICH EXPERIENCED SOMEWHAT LOWER THROUGHPUT DURING THE YEAR. GRO ROUP R REVENUE UE WHILST THE COMPANY RECORDED A NOTICABLE LIFT IN RENTAL INCOME, THIS WAS PARTLY OFFSET BY THE EFFECTS OF THE PREVIOUSLY REFERRED TO DROUGHT WHICH IMPACTED UPON OUR FARMING OPERATIONS. ACCORDINGLY, OVERALL RETURNS FROM THE COMPANY’S PROPERTY HOLDINGS SEGMENT REFLECTED ONLY A MODEST IMPROVEMENT ON THE PRIOR PERIOD. NO NORT RTHPORT RT LTD LTD THIS BUSINESS CONTINUES TO GO FROM STRENGTH TO STRENGTH.
FOR THE YEAR ENDED 30 JUNE 2013, TOTAL CARGO THROUGHPUT INCREASED BY SOME 13.5% AND IN SURPASSING 3 MILLION TONNES, IT CONSTITUTED ANOTHER NOTABLE MILESTONE FOR THIS ACCLAIMED FACILITY. LOG VOLUMES REACHED AN ALL TIME HIGH WITH MORE THAN 2.4 MILLION TONNES HANDLED ACROSS THE WHARF DURING THE PERIOD. THIS REPRESENTED AN INCREASE OF APPROXIMATELY 24% ON THE PREVIOUS YEAR. OTHER CARGO THROUGHPUT INCLUDED A VARIETY MANUFACTURED WOOD PRODUCTS, WOODCHIP, COAL, PALM KERNAL, GYPSUM, FERTILISER, DAIRY PRODUCE AND KIWIFRUIT. IN ORDER TO COPE WITH INCREASING CARGO VOLUMES, NORTHPORT EMBARKED UPON A NUMBER OF INITIATIVES DURING THE YEAR INCLUDING THE CONSTRUCTION OF A FURTHER 3 HECTARES OF PAVED AREA. FURTHERMORE, INVESTMENT IN “BOOKENDS” (AS DEPICTED IN THE PHOTO ON PAGE 3 OF THE ANNUAL REPORT), HAS ENABLED LOGS TO BE STACKED HIGHER THUS MAKING MORE EFFICIENT USE OF VALUABLE SPACE WITHIN THE PORT CONFINES. TOGETHER, THESE IMPROVEMENTS HAVE INCREASED THE LOG STORAGE CAPACITY OF THE FACILITY TO AROUND 245,000 TONNES. IN ADDITION TO ITS CURRENT, EXCELLENT FACILITIES, NORTHPORT IS BLESSED WITH ABUNDANT SCOPE FOR FUTURE DEVELOPMENT. A RESOURCE CONSENT IS HELD FOR CONSTRUCTION OF A 4 TH BERTH. THERE IS ALSO THE POSSIBILITY OF EVENTUAL EXPANSION TO A 5 TH BERTH AND PERHAPS EVEN A 6 TH BERTH. SIGNIFICANTLY, THERE IS ALSO AMPLE, APPROPRIATELY ZONED, BACK UP LAND TO DEVELOP AS REQUIRED, THE MAJORITY OF WHICH IS OWNED BY YOUR COMPANY. PRO ROPERT RTY HO HOLDING DINGS AS ALUDED TO IN THE ANNUAL REPORT, THE COMPANY IS DEVELOPING A SITE ON OUR LAND ADJACENT TO THE PORT FOR THE ESTABLISHMENT OF A LOG DEBARKING FACILITY. AS WELL AS REPRESENTING A WELCOME NEW TENANCY, THE PLANT WILL OFFER A VALUABLE SERVICE TO LOG EXPORTERS AND ITS ESTABLISHMENT IS EXPECTED TO STIMULATE FURTHER ACTIVITY IN THE AREA. THIS FACILITY IS EXPECTED TO COMMENCE PRODUCTION IN EARLY 2014. MEANWHILE, THE COMPANY CONTINUES WITH ITS ON-GOING EARTHWORKS PROGRAMME TO PROGRESSIVELY DEVELOP ADDITIONAL LAND WITHIN ITS INDUSTRIAL SUBDIVISION IN ANTICIPATION OF SECURING OTHER TENANCIES.
LOOKING FORWARD TO THE 2013/14 FINANCIAL YEAR, I WOULD JUST LIKE TO REITERATE COMMENTS MADE IN THE EXECUTIVE REVIEW SECTION OF THE ANNUAL REPORT. WHILST AN INCREASE IN ANNUAL CARGO THROUGHPUT IS AGAIN FORECAST, THIS GROWTH IS EXPECTED TO BE AT A MORE MODEST LEVEL THAN EXPERIENCED IN RECENT YEARS. NEVERTHELESS, WHEN COMBINED WITH AN ANTICIPATED UPLIFT IN NET RETURNS FROM THE COMPANY’S PROPERTY HOLDINGS, THIS POINTS TO A SATISFACTORY TRADING RESULT FOR THE PERIOD. DI DIVID IDENDS DS AS IS HIGHLIGHTED IN THIS GRAPH, DIVIDEND DISTRIBUTIONS (AS DEPICTED BY THE RED LINE) HAVE STEADILY INCREASED OVER THE 5 YEAR PERIOD. THE BLUE LINE REPRESENTS THE GROUP’S TRADING SURPLUS (OR UNDERLYING EARNINGS). THE TRADING SURPLUS IS A GOOD INDICATOR OF THE GROUP’S ABILITY TO FUND DIVIDEND PAYMENTS AND CAPITAL EXPENDITURE AS IT EXCLUDES REVALUATION MOVEMENTS AND THE LIKE WHICH ARE NON-CASH ITEMS. THE QUANTUM OF CAPITAL EXPENDITURE UNDERTAKEN DURING THE 5 YEARS HAS SEEN THE 2 LINES ON THIS GRAPH DIVERGE. THIS HAS INCLUDED CONSTRUCTION OF: • A NEW TRUCK SCALING FACILITY WHICH IS LEASED TO NORTHPORT • A LARGE FERTILISER SHED WHICH IS LEASED TO A SIGNIFICANT PORT USER • AND SIGNIFICANT EARTHWORKS UNDERTAKEN ON OUR INDUSTRIAL SUBDIVISION. GRAHAM WALLACE CH CHIE IEF EXECUT CUTIVE
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