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Port of Tauranga CEO blasts 'underperform' rating as bad reading of its reality
NEW ZEALAND's Port of Tauranga CEO Mark Cairns says Forsyth Barr's recent decision to retain an "underperform" rating on the port's shares failed to reflect the company's successful execution of its hub strategy, reported the Bay of Plenty Times.
Mr Cairns said it was a pity some of Forsyth Barr's clients might have missed out on a doubling of their investment over the period.
"You can't run a $2.6 billion business from behind a computer spreadsheet," he said of the judgment of the Duniden brokerage and investment banker.
Forysth Barr analyst Andy Bowley said in his late July report that Port of Tauranga (POT) had enjoyed close to a doubling of its share price over the past four years, despite it generating no real earnings growth.
"We expect the company's four-year earnings downgrade cycle to continue near term as the outlook for FY17E appears less positive than implied at the time of the Kotahi deals in 2014," he said.
"The hub port strategy will create value longer term, in our opinion, but potential upside is being partially mitigated by the competitive response from the broader industry.
"We retain an underperform rating, not least given POT's elevated valuation."
Forsyth Barr's analysis states that the 10-year Kotahi-POT deal suggested that POT would benefit from South Island transhipments once bigger ships arrived in early FY17E, but that this no longer appeared to be the case.
It also states that recent data from the Ministry of Transport on container throughput, and from Statistics NZ on logs and other cargo, confirmed POT would experience another year of flat earnings.
Mr Cairns said it was a pity some of Forsyth Barr's clients might have missed out on a doubling of their investment over the period.
"You can't run a $2.6 billion business from behind a computer spreadsheet," he said.
Mr Cairns said it was a pity some of Forsyth Barr's clients might have missed out on a doubling of their investment over the period.
"You can't run a $2.6 billion business from behind a computer spreadsheet," he said of the judgment of the Duniden brokerage and investment banker.
Forysth Barr analyst Andy Bowley said in his late July report that Port of Tauranga (POT) had enjoyed close to a doubling of its share price over the past four years, despite it generating no real earnings growth.
"We expect the company's four-year earnings downgrade cycle to continue near term as the outlook for FY17E appears less positive than implied at the time of the Kotahi deals in 2014," he said.
"The hub port strategy will create value longer term, in our opinion, but potential upside is being partially mitigated by the competitive response from the broader industry.
"We retain an underperform rating, not least given POT's elevated valuation."
Forsyth Barr's analysis states that the 10-year Kotahi-POT deal suggested that POT would benefit from South Island transhipments once bigger ships arrived in early FY17E, but that this no longer appeared to be the case.
It also states that recent data from the Ministry of Transport on container throughput, and from Statistics NZ on logs and other cargo, confirmed POT would experience another year of flat earnings.
Mr Cairns said it was a pity some of Forsyth Barr's clients might have missed out on a doubling of their investment over the period.
"You can't run a $2.6 billion business from behind a computer spreadsheet," he said.
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