v2 Report - Additional Information Supplement

SPN South Port New Zealand Limited (NS)

IPOs and Investment Opportunities

Press releases

27 SEPTEMBER 2007


Challenging Year Forecast for South Port

South Port New Zealand Ltd will be working hard in 2008 to match this year's results, the Chairman, Mr John Harrington told the Annual Meeting at Bluff today.

In the latest year, South Port earned a $2.23m net profit, which was down 8.6% as a consequence of reduced volumes of products stored in the Company's cold stores and higher maintenance costs.

The high New Zealand dollar also adversely affected some of Southland's exporters, which had a flow-on effect on the port operator's trading during the period.

Mr Harrington told shareholders the Board and management were disappointed with the result. However, the Port of Bluff had handled 50,000 tonnes of cargo more than last year at 2.155 million tonnes, matching the record set in 2004.

He said the Company has averaged a tax paid profit of $2.25m over the past five years.

A dividend of 7.75 cents per share has been maintained for the year, equating to a gross dividend of 11.51 cents. It also represents a pay-out ratio of 91% of taxable profit or 57% of free cash flow, which South Port assesses as taxable profit, plus depreciation, less any capital expenditure.

Accordingly, said Mr Harrington, both free cash flow and taxable profit are taken into consideration when assessing dividend pay-out.

In terms of total shareholder return, Mr Harrington noted that the share price had risen strongly over the past year from $1.52 as at 30 June 2006 to $2.75 this month. At this price level the resulting dividend yield is 2.8% (gross 4.2%).

He said the market appears to be factoring in possible benefits from the energy sector.

Mr Harrington said any growth in coastal shipping could be a key factor in South Port's future profitability, as the activity would not require significant capital expenditure. The Company awaits a Government strategy paper on the issues related to coastal shipping.

"Most industry players agree that there are too many container terminals in New Zealand and that a coastal feeder network is required to the main hub ports.

He predicted that as world trade continues to expand, New Zealand itself could be hubbing to Australia or even further afield.

Because of Bluff's draught, South Port is unable to provide the necessary facilities that major direct calling container shipping lines demand. "We see the coastal shipping of containers as a solution to this service gap and will continue in our efforts to obtain such a connection."

The termination of discussions between Auckland and Tauranga was a disappointment to us said Mr Harrington. "To ensure that the port industry makes the best possible use of capital and resources, and so remain competitive, it must look at what rationalisation options exist."

"The combination of the two major North Island ports, would I believe, have provided a platform for others to assess logical combinations," he said.

"We continue to monitor the combination possibilities that could exist in order to ensure our shareholders will not be disadvantaged."

Mr Harrington also touched on the Port's possible future involvement with the energy sector. Over the next two to three years offshore exploration activity is going to be limited to further seismic mapping, and at this point the Company cannot confirm that Bluff will be the preferred exploration base.

The Board is satisfied that management have done everything possible to promote Bluff as the base for those involved in the exploration, and believes it offers several advantages over the competition.

Solid Energy and L&M continue to explore the prospects of developing Southland's onshore coal and lignite reserves. As with the exploration on the Great South Basin, this will take time. The Company has not budgeted for any revenue from onshore or offshore exploration in the year to June 2008.

The Company is presently pursuing a number of other opportunities and if these can be brought to a successful conclusion they will ultimately benefit shareholders.

There is no doubt environmental issues are impacting on many companies.

Fortunately the electricity available in this part of the world is from a renewable source in the form of hydro generation. Notwithstanding this fact, South Port is currently investigating the potential for wind powered electricity generation on its own land.

The Company's 10% foundation shareholding in Hardwood Forests also represents a carbon offset activity.

The ensuing period will present a real challenge to a large number of businesses in a variety of sectors, said Mr Harrington. South Port, with its reasonable spread of customers and cargoes avoids a high level of exposure to any one particular income stream.

"If we are able to capitalise on some targeted opportunities that do exist then we could improve on last year's results," he said. "This will be a real challenge, taking into account a one-off tax expense arising from a deferred tax adjustment, but all the resources of the Company are activated to ensure an improvement to the bottom-line is pursued."

The Chief Executive, Mr Mark O'Connor, covered off operational issues and spoke further on the regional opportunities that may develop in the energy sector.



FOR FURTHER INFORMATION PLEASE CONTACT:

Mr Mark O'Connor
Chief Executive
South Port New Zealand Ltd
Tel 03 212 6036
Fax 03 212 8685
Email: moconnor@southport.co.nz

OR

Mr Warren Head,
Head Consultants Ltd,
Tel 03 365 0344
Fax 03 365 4255
Mobile 021 340 650
Email: headconsultants@xtra.co.nz

SOUTH PORT NEW ZEALAND LIMITED
Results for announcement to the market

Reporting Period 12 months to 30 June 2007
Previous Reporting Period 6 months to 31 December 2006

Amount (000s) Percentage change
Revenue from ordinary activities
$NZ14,622
-1.2%
Profit (loss) from ordinary activities after tax attributable to security holder.
$NZ2,232
-8.5%
Net profit (loss) attributable to security holders.
$NZ2,232
-8.5%

Interim/Final Dividend Amount per security Imputed amount per security
$NZ0.05 $0.024625

Record Date 28 September 2007
Dividend Payment Date 5 November 2007

Comments: A brief



APPENDIX I (Rule 10.4)
PRELIMINARY *HALF YEAR/FULL YEAR REPORT ANNOUNCEMENT

SOUTH PORT NEW ZEALAND LIMITED
(Name of Listing Issuer)
For Half Year/Full Year Ended 30 June 2007
(referred to in this report as the "current half year/full year")
Preliminary *Half year/full year report on consolidated results (including the results for the previous corresponding *half year/full year) in accordance with Listing Rule 10.4.2.
This report has been prepared in a manner which complies with generally accepted accounting practice and gives a true and fair view of the matters to which the report relates [see Note (X) attached] and is based on *audited/unaudited financial statements. If the report is based on audited financial statements, any qualification made by the auditor is to be attached.
The Listed Issuer *has/does not have a formally constituted Audit Committee of the Board of Directors.


[PLEASE REFER TO ATTACHED NOTES WHEN COMPLETING THIS FORM] *CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE


1. CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE
Current
*half year/full year
$NZ'000 *Up/
Down
% Previous
corresponding
*half year/full year
$NZ'000

1.1 OPERATING REVENUE
(a) Trading revenue
14,362

-0.9%
14,489

(b) Other revenue
260
-17.9%
317

(c) Total operating revenue
14,622
-1.2%
14,806

1.2 OPERATING *SURPLUS (DEFICIT) BEFORE TAXATION
3,260

-8.5%
3,564

(a) Less taxation on operating result
1,028
-8.6%
1,125

1.3 OPERATING *SURPLUS (DEFICIT) AFTER TAX
2,232

-8.5%
2,439

(a) Extraordinary Items after tax [detail in Item 3]
(b) Unrealised net change in value of investment properties
1.4 NET *SURPLUS (DEFICIT) FOR THE PERIOD
2,232
-8.5%
2,439
(a) Net Surplus (Deficit) attributable to minority interests
1.5 NET SURPLUS (DEFICIT) ATTRIBUTABLE TO MEMBERS OF
THE LISTED ISSUER
2,232
-8.5%
2,439

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE

2.DETAILS OF SPECIFIC RECEIPTS/OUTLAYS, REVENUES/EXPENSES FOR HALF YEAR/FULL YEAR Current
half year/full year
$NZ'000
Previous
corresponding
half year/full year
$NZ'000
2.1 INCLUDED IN CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE
(a) Interest revenue included in Item 1.1(b)
115
170
(b) Unusual items for separate disclosure (detail - Item 3)
(c) Equity earnings [detail - Item 16]
(d) Interest expense included in Item 1.2 (include all forms of interest, etc)
216
303
(e) Leasing and renting expenses
172
137
(f) Depreciation
2,078
2,180
(g) Diminution in the value of assets (other than depreciation)
16 8
(h) Amortisation of goodwill
(i) Amortisation of other intangible assets
(j) Impairment of goodwill

(k) Impairment of other intangible assets

2.2 SUPPLEMENTARY ITEMS

(a) Interest costs excluded from Item 2.1(d) and capitalised
(b) Outlays (other than those arising from the acquisition of an existing business) capitalised in intangibles

(c) Unrecognised differences between the carrying value and market value of publicly traded investments

- Items marked in this way need be shown only where their inclusion as revenue or
exclusion from expenses has had a material effect on reported surplus (deficit)

GROUP - CURRENT *HALF YEAR/FULL YEAR
3. DISCONTINUED, UNUSUAL (INCLUDING NON RECURRING), AND EXTRAORDINARY ITEMS OF THE GROUP
DETAILS AND COMMENTS
Operating Revenuer
$NZ'000
Operating Surplus
$NZ'000

Discontinued Activities:

(Disclose Operating Revenue and Operating Surplus)

TOTAL DISCONTINUED ACTIVITIES

Material Unusual (including Non Recurring) Items (included in 1.2)
Description:
TOTAL MATERIAL NON RECURRING ITEMS

GROUP - CURRENT *HALF YEAR/FULL YEAR

DETAILS AND COMMENTS
Operating Revenue
$NZ'000

Operating Surplus
$NZ'000

Extraordinary Items (Ref. Item 1..3(a))

Description:
TOTAL EXTRAORDINARY ITEMS
- Delete as required
STATEMENT OF MOVEMENTS IN EQUITY

4. STATEMENT OF MOVEMENTS IN EQUITY
Current *half year/full year
$NZ'000
Previous corresponding *half year/full year
$NZ'000

4.1 NET SURPLUS (DEFICIT) ATTRIBUTABLE TO MEMBERS OF LISTED ISSUER
2,232
2,439

(a) Net Surplus (Deficit) attributable to minority interest
4.2 OTHER RECOGNISED REVENUE AND EXPENSES
(a) Increases (decreases) in revaluation reserves
(b) Currency Translation Differences
(c) Minority interest in other recognized revenue and expenses
4.3 TOTAL RECOGNISED REVENUES AND EXPENSES

2,232
2,439
4.4 OTHER MOVEMENTS
(a) Contributions by Owners
(b) Distributions to Owners
(2,033)
(1,846)
(c) Other
(9)

4.5 EQUITY AT BEGINNING OF HALF YEAR/FULL YEAR*

26,009
25,425

4.6 EQUITY AT END OF HALF YEAR/FULL YEAR

26,208
26,009

EARNINGS PER SECURITY

5. EARNINGS PER SECURITY
Calculation of basic and fully diluted, EPS in accordance with IAS33: Earnings Per Share Current *half year/full year
$NZ'000 Previous corresponding *half year/full year
$NZ'000

(a) Basic EPS

$0.085
$0.093

(b) Diluted EPS (if materially different from (a))

6. MATERIAL ACQUISITIONS OF SUBSIDIARIES [see Note (VII) attached]:

(a) Name of subsidiary or group of subsidiaries
(b) Percentage of ownership acquired
-
-
(c) Contribution to consolidated net *Surplus (Deficit) (item 1.4)
$ -
$ -

(d) Date from which such contribution has been calculated

7. MATERIAL DISPOSALS OF SUBSIDIARIES [see Note (VII) attached]:

(a) Name of subsidiary or group of subsidiaries
(b) Contribution of subsidiaries to consolidated net *Surplus (Deficit) (item 1.4)
(c) Date to which such contribution has been calculated
(d) Contribution to consolidated net *Surplus (Deficit) (item 1.4) for the previous corresponding half year/full year
(e) Contribution to consolidated net *Surplus (Deficit) (item 1.4) from sale of subsidiary

8. REPORTS FOR INDUSTRY AND GEOGRAPHICAL SEGMENTS
Information on the industry and geographical segments of the Listed Issuer to be reported for the *half year/full year in accordance with the provisions of SSAP:23: Financial Reporting for Segments. Because of the differing nature and extent of segments among Listed Issuers, no complete proforma is provided, and the segment information should be completed separately and attached to this report. However, the following shows a suitable list of items for presentation and indicates which amounts should agree with items included elsewhere in the *half year/full year report:

SEGMENTS

Industry
Operating revenue:
Sales to customer outside the group
Intersegment sales
Unallocated revenue
Total revenue [consolidated total equal to Item 1.1(c)]
Segment result
Unallocated expenses
Operating Surplus (Deficit) after tax [Item 1.3]
Segment assets
Unallocated assets
Total assets [Equal to Item 9.3]
Geographical
Operating revenue:
Sales to customer outside the group
Intersegment sales
Unallocated revenue
Total revenue [consolidated total equal to Item 1.1(c)]
Segment result
Unallocated expenses
Operating Surplus (Deficit) after tax [Item 1.3]
Segment assets
Unallocated assets
Total assets [Equal to Item 9.3]

[Note (VIII) attached has particular relevance for the preparation of this statement] CONSOLIDATED STATEMENT OF FINANCIAL POSITION

9. CURRENT ASSETS


At end of current
*half year/full year
$NZ'000
As shown in last
Annual Report
$NZ'000 If half yearly
as shown in last
Half Yearly Report
$NZ'000

(a) Cash
1,040
1,578

(b) Trade receivables
1,821
1,940
(c) Investments
(d) Inventories
(e) Other assets, current
TOTAL CURRENT ASSETS
2,861
3,518
9.1 NON-CURRENT ASSETS
(a) Trade receivables
17
20
(b) Investments
2,179
2,015
(c) Inventories
(d) Property, plant and equipment
22,787
23,715
(e) Goodwill
(f) Deferred Taxation Assets
1,763
1,668
(g) Other Intangible Assets
(h) Other assets, non current
9.2 TOTAL NON- CURRENT ASSETS
26,746
27,418
9.3 TOTAL ASSETS
29,607
30,936
9.4 CURRENT LIABILITIES
(a) Trade Creditors
1,198
1,256
(b) Income in advance, current
(c) Secured loans
(d) Unsecured loans
(e) Provisions, current
641
623

(f) Other liabilities, current
TOTAL CURRENT LIABILITIES
1,839
1,879
9.5 NON- CURRENT LIABILITIES
(a) Accounts payable, non-current
(b) Secured loans
1,500
3,000
(c) Unsecured loans
-
-


(d) Provisions, non-current
60
48


(e) Deferred Taxation Liability, non-current
-
-


(f) Other liabilities, non-current
-
-

9.6 TOTAL NON-CURRENT LIABILITIES
1,560
3,048
9.7 TOTAL LIABILITIES
3,399
4,927
9.8 NET ASSETS
26,208

26,009

9.9 SHAREHOLDERS' EQUITY




(a) Share capital (optional)
9,418
9,418
(b) Reserves (optional) (i) Revaluation reserve
(ii) Other reserves
(c) Retained Surplus (accumulated Deficit) (optional)
16,790
16,591
9.10 SHAREHOLDERS' EQUITY ATTRIBUTABLE TO MEMBERS OF THE LISTED ISSUER

26,208
26,009
(a) Minority equity interests in subsidiaries
9.11 TOTAL SHAREHOLDERS' EQUITY
26,208
26,009
(a) Returns on Assets (%) (EBIT divided by Total Assets)
11.5%
12.4%
(b) Return on Equity (%) (Net Income divided by Shareholders' Equity)
8.5%
9.4%
(c) Debt to Equity Ratio (%) (Total Liabilities divided by Shareholders') Equity)
12.9%
18.9%
[See Note (IX) attached] CONSOLIDATED STATEMENT OF CASH FLOWS FOR *HALF YEAR/FULL YEAR

10. CASH FLOWS RELATING TO OPERATING ACTIVITIES
Current
*half year/full year
$NZ'000 Previous corresponding
*half year/full year
$NZ'000

(a) Receipts from customers
14,482
14,269

(b) Interest received
97

185

(c) Dividends received
1
1

(d) Payment to suppliers and employees
(9,063)
(8,574)

(e) Interest paid
(180)

(277)

(f) Income taxes paid
(1,186)

(1,172)

(g) Other cash flows relating to operating activities
(5)
(14)

NET OPERATING FLOWS

4,146
4,418

[See Note (IX) attached]
11. CASH FLOWS RELATED TO INVESTING ACTIVITIES

Current
half year/full year
$NZ'000 Previous corresponding
half year/full year
$NZ'000
(a) Cash proceeds from sale of property, plant and equipment
33
228
(b) Cash proceeds from sale of equity investments
251
(c) Loans repaid by other entities
(d) Cash paid for purchases of property, plant and equipment
(1,183)
(2,302)
(e) Interest paid - capitalised
(f) Cash paid for purchases of equity investments
(g) Loans to other entitles
(h) Other cash flows relating to investing activities

NET INVESTING CASH FLOWS
(1,150)
(1,823)

[See Note (IX) attached]
12. CASH FLOWS RELATED TO FINANCING ACTIVITIES

Current
half year/full year
$NZ'000 Previous corresponding
half year/full year
$NZ'000
(a) Cash proceeds from issue of shares, options, etc
(b) Borrowings
(c) Repayment of borrowings
(1,500)
(1,650)
(d) Dividend paid
(2,033)
(1,847)
(e) Other cash flows relating to financing activities
NET FINANCING CASH FLOWS
(3,533)

(3,497)

[See Note (IX) attached]
13. NET INCREASE (DECREASE IN CASH HELD)

Current
half year/full year
$NZ'000 Previous corresponding
*half year/full year
$NZ'000

(a) Cash at beginning of *half year/full year
1,578
2,480
(b) Exchange rate adjustments to Item 12.3(a) above
(C) CASH AT END OF *HALF YEAR/FULL YEAR
1,040
1,578
14. NON-CASH FINANCING AND INVESTING ACTIVITIES

Provide details of financing and investing transactions which have had a material effect on group assets and liabilities but did not involve cash flows.
15. RECONCILIATION OF CASH

For the purposes of the above statement of cash flows, cash includes

Cash at the end of the *half year/full year as shown in the statement of cash flows is reconciled to the related items in the financial statements as follows:
Current
- half year/full year
$NZ'000 Previous corresponding
- half year/full year
$NZ'000

Cash on hand and at bank
140
323

Deposits at call
900
1,255

Bank overdraft
Other (provide details eg. Term Deposits)

TOTAL = CASH AT END OF *HALF YEAR/FULL YEAR [Item 13(c)]
1,040 1,578

EQUITY ACCOUNTED EARNIGS FROM ASSOCIATES
16. EQUITY ACCOUNTED INVESTMENTS IN ASSOCIATES

Information attributable to the reporting group's share of investments in associates and other material interests to be disclosed by way of separate note below (refer FRS-38 Accounting for Investments in Associates).
Current
*half year/full year
$NZ'000 Previous corresponding
*half year/full year
$NZ'000

16.1 GROUP SHARE OF RESULTS OF ASSOCIATES

(a) OPERATING *SURPLUS (DEFICIT) BEFORE TAX
(b) Less Tax
(c) OPERATING *SURPLUS (DEFICIT) AFTER TAX
(i) Extraordinary items
(d) NET *SURPLUS (DEFICIT) AND EXTRAORDINARY ITEMS AFTER TAX

16.2 MATERIAL INTERESTS IN CORPORATIONS NOT BEING SUBSIDIARIES

(a) THE GROUP HAS A MATERIAL (FROM GROUP'S VIEWPOINT) INTEREST IN THE FOLLOWING CORPORATIONS:

Name
Percentage of ordinary
shares held at end of
- half year/full year
Contribution to net
- surplus (deficit) (item 1.5)

EQUITY ACCOUNTED
ASSOCIATES

Current
*half year/
full year Previous
corresponding
*half year/
full year
Current
*half year/full year
$NZ'000 Previous
corresponding
*half year/full year
$NZ'000

Equity Accounted in Current Year
OTHER MATERIAL INTERESTS

Not Equity Accounted in Current Year
EQUITY ACCOUNTED INVESTMENT IN ASSOCIATES
Current
*half year/full year
$NZ'000 Previous corresponding
*half year/full year
$NZ'000
(b)INVESTMENT IN ASSOCIATES

Carrying value of investments in associates at beginning of half year/full year
Share of changes in associates' post acquisition surpluses/and reserves:

Retained surplus
Reserves
Net goodwill amortisation and impairment adjustments in the period

Less Dividends received in the period

Equity carrying value of investments at the end of half year/full year
Amount of goodwill included in the carrying value at end of that half year/full year

17.ISSUED AND QUOTED SECURITIES AT END OF CURRENT *HALF YEAR/FULL YEAR

Category of Securities Issued Number Quoted Number Cents Paid-Up Value
(if not fully paid)


PREFERENCE SHARES:


Issued during current *half year/full year
ORDINARY SHARES

Issued during current *half year/full year 26,234,898 9,418,383

CONVERTIBLE NOTES

-(Description)

Issued during current *half year/full year

OPTIONS: Exercise Price Expiry Date

Issued during current *half year/full year

DEBENTURES - Total only: $
UNSECURED NOTES - Totals only: $
OTHER SECURITIES $ $
-Description includes rate of dividend or interest and any redemption or conversion rights together with the prices and dates thereof.

18.COMMENTS BY DIRECTORS If no report in any section, state NIL. If insufficient space below, provide details in the pages attached to this report.


(a)Material factors affecting the revenues and expenses of the group for the current *half year/full year

(b)Significant trends or events since end of current *half year/full year

(c)Changes in accounting policies since last Annual Report and/ or last Half Yearly Report to be disclosed - The majority of Group accounting policies remain substantially unchanged. However, the Group has adopted NZIFRS and the following accounting policies have been applied to the current and comparative accounting principles:
- Recognition of Long Service Leave future liabilities
- Revaluation of Other Investments to reflect market value
- Revaluation of Investment Property to full market value
- Recognition of the market value of Financial Instruments
- Recognition of the deferred tax impact of these adjustments

(d)Critical Accounting Policies - Management believes the following to be critical accounting policies. That is they are both important to the portrayal of the Issuer's financial condition and results, as they require management to make judgments and estimates about matters that they are inherently uncertain

(e)Management's discussion and analysis of financial condition, result, and/or operations (optional) - this section should contain forward looking statements that should outline where these involved risk and uncertainty. Refer Press Release attached

(f)Other Comments

19.DIVIDEND

(a)Dividend Yield as at balance date (%) (Annual dividend per share divided by price per share - 4.6%
(b)Tax Adjusted Dividend Yield as at balance date (%) (Annual net dividend per share divided by price per share) - 3.1%
20.ANNUAL MEETING (If full year report)

(a) To be held at South Port's Board Room, Island Harbour, Bluff
(b) Date: Thursday, 27 September 2007 Time: 10.45 a.m.
(c) Approximate date of availability of Annual Report: 14 September 2007

If this *half year/full year report was approved by resolution of the Board of Directors, please indicate date of meeting: 23 August 2007

NZX AND MEDIA STATEMENT

23 AUGUST 2007


South Port Result Reflects Resilient Regional Economy

Reduced storage volumes and higher R&M costs slightly checked earnings growth for South Port New Zealand Ltd in the year to 30 June 2007.

Net profit after tax was down 8.6% at $2.23m compared with $2.44m in 2006.

South Port, the operator of the Port of Bluff, had signalled a slight slowing when it released its interim results. The chairman, Mr John Harrington, confirmed that there has been "a modest reduction in profitability, largely driven by reduced volumes being stored in our cold stores and higher levels of maintenance."

South Port serves a regional economy "intimately entwined with the export sector and the impact of the strength of the New Zealand dollar has become more evident in the past twelve months," said Mr Harrington. "Relief in the form of a continuing lower currency will be necessary if cargo flows are to increase over the medium term."

Revenue from port and warehousing operations has decreased by 1% to $14.6m ($14.8m).

Group surplus before financing costs and taxation fell by 9% to $3.2m ($3.5m). Net financing costs amounted to $116,000 ($140,000).

Based on the reported profit of $2.23m, earnings per share were 8.5 cents per share (9.3 cents per share).

South Port continues to maintain a stable balance sheet. Current assets amount to $2.9m ($3.5m), and current liabilities stand at $1.8m ($1.9m). Non-current assets excluding Property, Plant and Equipment stand at $4m ($3.7m).

Term liabilities now total $1.6m ($3m)

There has been a substantial rise in total shareholder distributions over the year. Last year, the directors adopted a dividend policy aligning future dividends with free cash flow and reported profitability. The final dividend for 2007 is 5 cents per share, which translates to a full year dividend of 7.75 cents per share, fully imputed.

The payment represents a gross return of 4.6% (net 3.1%) based on a share price of $2.50 as at 30 June.


Total shareholders equity remains around $26m after allowing for dividend payments.

The payout ratio this year was 91% and the Company believes a minimum distribution around this level should be targeted in the foreseeable future.

The share price has risen significantly since balance date, because of a combination of factors.

Mr Harrigton stated, "recent announcements related to the issuing of petroleum exploration permits within the offshore Great South Basin has coincided with an increased demand for shares in South Port in expectation that Bluff is well positioned to benefit from services related to future exploration activity.

"A high degree of speculation will surround this activity and a commercial outcome is unlikely to be quickly quantified."

For the next 24 - 36 months, exploration activity will be limited to further seismic mapping in permit areas in order to determine drilling locations with the best prospects. The port location for servicing seismic vessels remains undecided. Subsequently, it is possible that exploration companies will position drilling rigs in the Southern Ocean to undertake actual drilling. "South Port will be promoting its infrastructure to these exploration companies with the objective of establishing Bluff as the preferred exploration base for any Great South Basin activity," said the chief executive officer Mr Mark O'Connor.

"While there are no assurances that South Port will secure this activity, Bluff is able to provide several advantages over its competitors when it comes to addressing the requirements of an exploration base."

In mid-2006 South Port promoted the launch of a regional capability website targeting exploration companies.

"Energy continues to be a theme with significant potential for the Southern Region, said Mr Harrington. Along with characteristics suitable for wind generated electricity, the region also contains over 70% of the national coal and lignite reserves which both Solid Energy and L&M Group have expressed interest in developing.

L&M Petroleum has also commenced a two-year onshore exploration programme in western Southland and recently relinquished an offshore exploration permit in Solander Basin in exchange for the extension of a permit covering both onshore and offshore prospective acreage.

South Port and Venture Southland, together with other key stakeholders, have formed the Southland Energy Consortium to help co-ordinate the promotion of the region's energy potential and to act as a single contact reference for local service interests.

Mr O'Connor said that while energy has been newsworthy, the base business of South Port remains the primary focus.


"Cargo volumes in the latest year matched the historic record level set in 2004. The 2007 throughput of 2.155 million tonnes exceeded 2006 by 50,000 tonnes. Log and wood chip exports provided encouraging gains and the upward trend is expected to continue in the coming 12 months."

"NZ Aluminium Smelters again provided consistent base levels of import and export cargo through Bluff. A total of 1.15 million tonnes of product transferred across the Tiwai Berth, which is on long term lease to NZAS, matching the highest ever volume set in 2006."

Petroleum products (225,000 tonnes) and fertiliser imports (236,000 tonnes) showed a healthy resilience against a backdrop of export sector businesses struggling with the inflated NZ dollar.

The expected sale of the Company's back-up mobile harbour crane did not eventuate within the period and avenues for its sale are continuing to be explored.

"Several new projects which may come to fruition over the next 18-24 months are currently being considered."

Mr Harrington said that, subject to unforeseen events, South Port is expecting a similar level of earnings in the coming financial year. "However, with modest capex obligations budgeted for in 2008, the Company's free cash flow should remain strong."

An earnings update will be provided with the interim result.

The Company's annual meeting will be held at Bluff on Thursday, 27 September 2007.

FOR FURTHER INFORMATION PLEASE CONTACT:

For Further Information
Please Contact:

Mr Mark O'Connor
Chief Executive
South Port New Zealand Ltd
Tel 03 212 6036
Fax 03 212 8685
Email: moconnor@southport.co.nz

OR

Mr Warren Head,
Head Consultants Ltd,
Tel 03 365 0344
Fax 03 365 4255
Mobile (021) 340 650
Email: headconsultants@xtra.co.nz

Refer also to attached "Company Fact Sheet"

COMPANY FACT SHEET

South Port New Zealand Ltd (South Port) is the southern most commercial port in New Zealand, located at Bluff and operating on a year round, 24 hour basis. It is situated in the rich productive province of Southland which is responsible for generating approximately 12% of New Zealand's total exports. The region's major cargo producing sites are situated within 30 to 80 km of the Port.

The Port of Bluff has been operating since 1877 while the Company was formed in 1988 having taken over the assets and liabilities of the former Southland Harbour Board.

South Port was listed on the NZ Stock Exchange (NZX) in 1994 and has Environment Southland, the region's local government environmental agency, as its 66% majority shareholder.

SOUTH PORT FACTS

- Owns and manages assets worth $30 million

- Directly employs more than 50 full time equivalent staff

- Is the only Southland based company listed on NZX

- Handles in excess of 2.0 million tonnes of cargo each year

- Offers full container, break-bulk and bulk cargo capability and services the following main cargoes:

- import - alumina, petroleum products, fertiliser, acid, fish

- export - aluminium, timber, MDF, logs, dairy, meat by-products and woodchips

- Has split its land-based operating resource into four main divisions - processed forestry, containers, cool & cold storage and dairy

- Undertakes its primary port operation on a 40 ha man-made Island Harbour situated at Bluff

- Operates a separate dedicated fuel berth at Bluff Town Wharf plus provides the Tiwai Wharf facility to NZAS under a long term licence

- Services vessels carrying over 1.0 million tonnes of cargo destined for movement across the Tiwai Wharf each year, of which 2/3 is raw material imports while 1/3 is finished aluminium product

- Has approximately 15 ha of land available for further port development or industry establishment

Director's Report