Napier Port says market disruptions caused by the coronavirus outbreak present an “increased risk” to earnings with log prices back to levels seen during last year’s sharp correction.
The company’s year-to-date log export volumes are up 2.9% compared to the previous year and this is in line with expectations.
However, a slowdown in log exports, and possibly other cargo, is expected due to current market uncertainty, it says.
“While we are unable to quantify the potential financial impact at this time, these conditions represent a materially increased risk to the achievement of previous earnings forecasts.
“Napier Port is closely monitoring changes to trading patterns, particularly as it affects our log export customers and the key Chinese destination market.
“The impact on global trade and supply chains from the coronavirus outbreak is uncertain and we continue to engage with our customers to understand the possible impacts which will vary by cargo type.
“Log exports continue to sail from Napier Port however there have been reductions in log harvesting and current log inventory levels on Chinese ports remain high. Export log prices have reduced to levels seen during the sharp price correction during 2019.
“We understand port operations in China are rebuilding towards normal operating capacity but it is uncertain how quickly this will occur. The trade outlook remains uncertain, and dependant on the speed of recovery in China, and other countries taking measures to manage the coronavirus risk and any resulting supply chain impacts.”
*Napier Port announces its half-year financial results in May.
