Napier Port profit exceeds IPO forecasts

Napier Port has reported is annual result. Photo / Hawke's Bay Today.

Newly listed Napier Port reported a net profit of $20.4m for the September year, slightly ahead of its IPO forecast, thanks to resilient regional cargo flows in the face of challenges posed by Covid-19.

However, the company, which debuted the NZX in August last year, said earnings in the current financial year were expected to fall because of the pandemic.

The company cancelled its interim dividend to protect its balance sheet but declared a final dividend of 5c, up from 2.5c in the previous year and less than that forecast in the IPO.

It now expects underlying EBITDA for the current year to range between $34m and $38m, down from $41m.

Chief executive Todd Dawson said the reduced range was driven by the expectation that there would be no cruise ship visits in the current financial year.

He said if commodity markets remained strong, EBITDA would come in at near the top of the range.

Dawson said the port was benefiting from supply chain issues being faced by northern ports.

"We are acting as a relief valve for some of those congestion issues being faced in Auckland and Tauranga," he told the Herald.

In the year under review, revenue rose by 0.8 per cent to $100.4m.

The port's total container trade was down 1.1 per cent to 268,000 twenty-foot equivalent units (TEU) from 271,000 TEU.

Bulk cargo volumes fell 8.3 per cent to 3.1m tonnes from 3.4m tonnes, reflecting the impact of Covid-19 pandemic lockdown on the log export trade.

Although the pandemic brought the cruise ship season to a premature end, the port hosted 76 cruise lines, up from 70 in the prior year.

Revenues were also underpinned by increased revenues per trade unit.

Napier Port said investment in its infrastructure - including its new multi-purpose 6 Wharf - reflected its confidence in the long-term economic prospects for its region and the service proposition it offers regional cargo owners.

"However, due to the new economic realities the company faces in the wake of the pandemic, Napier Port also notes that earnings for the new financial year are expected to be reduced," the company said.

"For many of these reasons, the board cancelled the interim dividend and directors still believe protecting Napier Port's balance sheet remains a prudent stance," it said.

The port's shares closed at $3.54, down 16c from Tuesday's close.