Lyttelton Port resumes dividends after insurance swells first-half profit

Lyttelton Port Co [NZX: LPC], Christchurch's ocean trade hub, has resumed dividend payments for the first time since 2010 after reaching a settlement with its insurers over the damage caused by the Canterbury earthquakes, which swelled its first-half profit.

The company will pay an interim dividend of 2 cents per share on March 27 with a March 20 record, its first return to shareholders since the 2010 financial year. The port made a net profit of $336.5 million, or $3.291 per share, in the six months ended Dec. 31 from $3.25 million, or 3.2 cents per share, a year earlier, it said in a statement. The bulk of that came from the company recognising $357.6 million in insurance income as part of its $438.3 million settlement with Vero, NZI and QBE.

Lyttelton Port still has an outstanding matter with a third party that may result in an additional recovery, it said.

Stripping out the impacts of the earthquake, Lyttelton Port reported a 19 percent drop in earnings to $6.5 million, while affirming its annual forecast of earthquake adjusted profit to be between $15 million and $16 million in the 12 months ending June 30.

"The financial result, excluding the significant insurance proceeds, is strong albeit down on the same period last year," chairman Trevor Burt said. "Expenses are up as the company has invested resources on a number of initiatives in health and safety, capacity and productivity."

Employee expenses rose 13 percent to $23.3 million, and the cost of materials consumed and utilised increased 23 percent to $14.5 million. Revenue rose 6.4 percent to $57.6 million, with total container volumes up 9.2 percent to 185,630 twenty-foot equivalent units (TEUs) due to increased dairy exports and a steady stream of imports to support the Canterbury rebuild.

Log volumes climbed 79 percent to 279,736 tonnes and coal advanced 8.2 percent to 1.07 million tonnes.

Lyttelton Port said it recently completed a safety audit of all operations and is implementing more training, increased supervision and clearer procedures to improve health and safety. The company had two deaths on its site in November and December last year in the operations of third-parties, and another serious injury in January, which is being investigated by WorkSafe New Zealand.

The shares dropped 4.1 percent to $3.30, and have climbed 14 percent this year.

(BusinessDesk)