By Ian Findlay, industrial reporter

A CHANGE in property strategy that resulted in significantly reduced property sales saw revenue for Forth Ports dip by nearly £10 million last year, the company reported yesterday.

However the company saw a substantial increase in its port revenue for the year to December 31, up 13% on 2004.

Pre-tax profits for the year dropped to £58.3 million from £62.8 million the year before.

Chief executive Charles Hammond said 2005 had been “a year of achievement and change.” He went on, “We have a wide-ranging action plan for various property projects to deliver long-term growth in net asset value for our shareholders.

“Our ports performed well and we have an active project pipeline which, combined with progress on existing business initiatives, gives us confidence that 2006 should be another year of successful progress.

“Our secure and valuable ports income stream complements the property business and will enable us to deliver growing dividends to our shareholders.”

Forth Ports said its group revenue for 2005 totalled £151.5 million, compared to £162.2 million the previous year.

Within that total, port revenue rose from £118.3m to £134.2m, while property revenue dropped from £43.6m in 2004 to £17.3 million.

Underlying port operating profit increased 12% to £36.0m (2004: £32.2m) and reported group operating profit was up 8% to £62.8m (2004: £58.0m).

Basic earnings per share over the year were 97.6p (2004: 100.7p). A 7.8% increase in full year dividend to 43p (2004: 39.9p) has been declared.

Forth Ports owns and operates seven commercial ports in the UK—at Tilbury, Dundee, and five in the Firth of Forth.

As far as Dundee was concerned, Forth Ports said 2005 saw a large increase in the piped cargo tonnage handled by the Nynas AB refinery, up to 0.7 million tonnes from 0.5 million.

In terms of dry cargo, paper and pulp tonnages were at a higher level with the winning of new business from Star Shipping, which moved from the Port of Montrose to Dundee in the first half of the year.

Fertiliser tonnages were very low in the first half but improved in the second half. The closure of various grain facilities in the hinterland of Dundee reduced agripod tonnages to 155,000 tonnes (2004: 166,000 tonnes). The Grainfax business performed very well in difficult circumstances.

North Sea oil business was said to be “well up” year on year.

Forth Ports sold two development sites and the City Quay Retail Centre at Dundee during the year, realising £16 million which it intends to reinvest at Edinburgh Forthside.

Overall tonnage from Rosyth and other Fife ports amounted to 1.2 million tonnes, up 100,000 tonnes over 2004, with timber, plasterboard and coal the main commodities.

In November, Superfast Ferries announced its daily service between Rosyth and Zeebrugge would be reduced to three sailings per week in each direction. The revised service has seen continuing high usage.

Forth Ports was in discussions with several ferry operators to determine the viability of a freight-only service from Rosyth to Zeebrugge.

The smaller Fife Ports had continued to make “a modest contribution to the overall Scottish ports’ operating profits.”

Consideration will have to be given in due course to their future, with the potential to develop alternative uses.