The sector has been overshadowed for the past three years with calls for rationalisation, with 14 ports operating around the country while shipping lines are streamlining their business - reflected in falling numbers of port calls.
Port Otago and Lyttelton Port of Christchurch are the closest to any form of rationalisation, with a merger proposal in place, but a report due next month will not be made public before a decision is made four to six weeks later.
Broker Forsyth Barr recently reviewed annual reports 11 of the 14 ports, which showed that container volumes held up well against the previous year for most, but this would be difficult to replicate in the 2009-10 financial year.
"Key to the year ahead for ports is the strength of the New Zealand dollar, with all the volatility it has been showing," Forsyth Barr broker Suzanne Kinnaird said yesterday.
Ports were facing uncertainty on several fronts.
Shipping lines were changing their schedules and Fonterra was moving to more rail capacity, with subsequent large downturns in container numbers at the ports of Timaru and Taranaki.
Port Otago faces a 42,550 container downturn, which is expected to see a decline of almost $4 million in revenue.
The port has has proposed 36 job losses under restructuring.
"All the port operators remain cautious, which is reflected in more discussion on restructuring and reviewing operations, rather than any capital expenditure projects," Ms Kinnaird said.
The Forsyth Barr research had highlighted the activity of listed Port of Tauranga, the country's second largest port by container volume with 546,000 DUE's (aft equivalent containers) handled compared to Auckland's 843,000 last year.
Ms Kinnaird said good log exports helped underpin Port of Tauranga's earnings for the year, as was the case for several other ports, and it could expect a similar financial result to be mirrored this year, up slightly from its after-tax profit of $40.1 million.
Port of Tauranga shares were yesterday trading around $7.08, and Forsyth Barr, which has a target price of $6.36 on the stock, has downgraded its recommendation from "hold" to "reduce", Ms Kinnaird said.
Ms Kinnaird's financial disclosure document is available on request.
