Napier Port has posted $52.6 million in revenue for its half-year result to March 31 with growth in bulk and log exports offsetting the loss in cruise ship earnings.
The result was up 0.6% year-on-year despite COVID-19 preventing cruise vessel visits which generated $4.2m in the same period last year.
Bulk cargo revenue increased $4.2m (26.5%) to $20.2m driven by a 20.6% increase in log exports to 1.43 million tonnes. Container volumes of 135,000 TEU were in line with the prior period.
Underlying net profit after tax decreased 5.2% to $10.6m. Reported net profit after tax decreased 14.9% to $10.6m due to the reinstatement of tax depreciation on commercial buildings in the prior year, the company says.
The company will pay a fully imputed interim dividend of 2.8 cents per share after no interim dividend in the prior year.
It says demand for the region’s food and fibre exports remains robust, however the impact of labour shortages and supply chains disruption on trade remains uncertain.
Expected underlying result from operating activities for the year to September 30 remains at between $39m and $42m, assuming a continuation of current market conditions.
Napier Port chair Alasdair MacLeod says a key strength of Napier Port is the “diversity of trades” that pass across its wharves.
“In the half year to the end of March 2021, strong growth in bulk exports, and a 20.6% increase in log exports in particular, have offset the absence of cruise ships, which, prior to the COVID-19 pandemic, were a welcome source of business for both Napier Port and the region.
“Over the last half year, that diversity was also apparent in our container trade. Volumes were steady at 135,000 TEU, but with changes in mix between trades with higher exports of meat and apples and other container movements offsetting falls in containerised wood pulp and timber and lower import volumes.
“The diversification of trades and relative stability of earnings this provides to Napier Port are a key reason why we have been able to look through the current COVID-19 turmoil and continue to invest in the infrastructure that will support our region for the longer term,” MacLeod says.
“The centre piece of this investment is 6 Wharf, an inter-generational asset that will extend our capacity and our region’s access to global markets. The project remains within budget and on track to open in late 2022,” he says.
Napier Port chief executive Todd Dawson says the disruption in global shipping over the last year has presented considerable challenges.
“Solid log flows across Napier Port have been sustained in response to the strong export market conditions.
“At the same time, congestion – particularly in the upper North Island – has seen 26 container ships miss their scheduled calls.
“Schedule changes and interruptions have resulted in volatile container flows and cargo owners struggling with shipping container equipment and space availability. On port, containers have dwelled longer, limiting operational space, while we have seen a 67%, or an 11k TEU, increase in other container movements, including DLRs and transhipments.
“Throughout this period, clear communication with all our stakeholders and responding to the container shipping challenges with the flexibility available to us has been fundamental to meeting our customers’ needs.
“I am proud of the way the Napier Port team has risen to the challenge. Our people responded with the determination and the can-do attitude that is at the heart of Napier Port’s culture,” Dawson says.
Outlook
“Demand for the region’s food and fibre exports remains robust. However, notwithstanding the Government’s recent moves to increase the availability of seasonal labour in the future, the impact of worker shortages on seasonal export industries remains uncertain,” MacLeod says.
“Pipfruit exports are tracking in line with the prior year, but it is not clear what the eventual export crop size for this year will be as a result of the seasonal labour shortages. Similar dynamics are at play across all fresh produce sectors.
“Meanwhile, the continued challenges to container-based supply chains from regional and global shipping disruptions continue to impact on the free flow of cargo.
“Noting continued uncertainties and assuming a continuation of current market conditions, Napier Port reaffirms the earnings guidance provided in April for the underlying result from operating activities for the year to range between $39 million and $42 million,” MacLeod says.
