Napier Port. Photo: Supplied / Napier Port
Napier Port has reported a slight fall in half-year profit and reduced its dividend as its costs increased and cargo volumes were hit by the disruption caused by Cyclone Gabrielle.
Key numbers for the six months ended March compared with a year ago:
- Net profit $8.7m vs $9.0m
- Underlying profit $7.5m vs $7.2m
- Revenue $62.3m vs $50.7m
- Cargo vols 2.3m tonnes vs 2.5m tonnes
- Interim dividend 1.7cps vs 2.8cps
Napier Port said its first half had been strong with an uplift in container volumes and a return of cruise ships, but the outlook has been tempered by the impact of the cyclone.
Chief executive Todd Dawson said its new wharf, Te Whiti, had given it added flexibility through being able to handle more ships, higher cargo volumes, and added capacity for future growth.
Napier Port chief executive Todd Dawson. Photo: Napier Port
"Our additional berth availability is helping to ease shipping congestion across New Zealand. New shipping services are calling Napier Port and the cruise industry has resumed."
"Our cargo volumes and customer base in the central North Island accessed via Napier Port's road and rail service has been growing and to maximise this potential we have strengthened our position and investment in the Manawatū Inland Port."
However, the cyclone had heavily affected the horticulture and forestry sectors, as well as major customers such as the Pan Pac pulp mill and the Ravensdown fertiliser works.
Increased revenue from container operations offset a fall in bulk cargo, with price rises offsetting an overall fall in cargo volumes.
Operating costs rose nearly 4 percent on higher labour and other inflationary costs, while the new wharf had increased its finance and depreciation costs.
Lingering cyclone impact
Dawson said he expected the cyclone disruption, which included the destruction of the rail link to the port, would continue into 2024, although it was too soon to say how much it would hit the port's earnings.
The company withdrew its full-year underlying earnings guidance of between $42 million and $48m after the cyclone, and has cut its first half dividend, which Dawson said was a "prudent" move given the uncertainty.
He said the major industrial customers were rebuilding and would likely be back operating towards the end of the year, but the horticulture sector would take a considerable time to recover.
"As the region recovers and road and rail networks reopen to Napier Port, we will continue to see our long-term strategies deliver growth and value."
Dawson said the small coastal shipping service between the port and Gisborne had been useful but commercial viability would determine its long term future.