Napier Port is reporting a 34% drop in net profit after tax to $9.3 million for the nine months to June 30 as the impact of Cyclone Gabrielle weighed on exports from the region.
The slump was also the result of further adverse weather in June and July that limited access to the wharves, it says.
However, the port says it anticipates a recovery in cargo volumes in the new financial year. It says a focus on yield management and pricing adjustments linked to investments in infrastructure and additional customer services have supported revenue.
Revenue for the nine months rose 5.7% to $90m from $85.1m in the same period last year.
“The lasting effects of the cyclone on cargo volumes are expected to persist into the fourth quarter, but our confidence of a step up in cargo in the new financial year is growing given the progress of the recovery efforts we are seeing in the region,” chief executive Todd Dawson says.
“Regional infrastructure rebuilding is well underway, assisted by the ongoing financial commitment and prioritisation by government. We are particularly encouraged by the progress made by key customers affected by the cyclone.
“The strong forward bookings for the upcoming cruise season suggest it could be our busiest on record. Interest from shipping lines meanwhile remains high, which is a measure of confidence in Napier Port’s long-term volume growth potential,” Dawson says.
The port’s full-year earnings guidance remains unchanged for an underlying result from operating activities for the year to September 30 of between $34.5m and $36.5m.
Container volume down
Container services revenue decreased by 1% to $51.9m for the period as decreased container volumes were largely offset by higher revenue per TEU.
Average revenue per TEU for the nine months increased 9.9% to $297 from $270 in the same period last year. This was driven by factors including tariff increases, fuel and insurance cost recoveries and increased utilisation of depot and storage services.
For the nine months, container volumes decreased 10% to 175,000 TEU from 194,000 TEU in the same period last year.
Log exports down
Bulk cargo revenue decreased 2% to $30m for the nine months as volumes decreased 16.4% to 2.3 million tonnes from 2.7 million tonnes in the same period a year ago.
Log export volume for the nine-month period decreased 16.1% to 1.8 million tonnes from 2.1 million tonnes due to adverse weather, damaged roading infrastructure and subdued log export market conditions.
Average revenue per tonne for the nine months increased 17.3% to $13.26 from $11.31 in the same period last year, driven by yield increases and an increased contribution from the port’s debarking operation.
Cyclone Gabrielle impact
Six months post-cyclone, all road access to Napier Port are open and KiwiRail has indicated a mid-September reinstatement of the rail line from Hastings to Napier Port.
Once the rail line is fully operational, the port expects pulp, meat and log cargoes from the central North Island to revert back to rail mode, with a positive effect on volumes.
Pan Pac’s timber operations are expected to restart in the first quarter of the next financial year, and pulp processing by the second quarter, with a ramp up towards normal production levels over the subsequent quarters, the port says.
Ravensdown’s fertiliser plant in Awatoto restarted manufacturing operations in July.
“The forestry sector has seen some reduction in capacity however forest-based production has been re-established”, the port says.
“Log volumes are steady and we are receiving some additional windthrown logs from the central North Island. Export market conditions for logs remains subdued.
“The extent of pipfruit areas that will require remediation and replanting to restore production will become clearer in the spring when fruit buds appear,” it says.
