Napier Port's log explosion: Double the volume in three years driving increased revenue

The continued rise of log exporting at Napier Port has helped revenue increase 8.6 per cent from 2018.

In financial results released on Tuesday, revenue was $99.6 million, ahead of the forecast $97.4m when it launched its IPO in July.

The share price went up slightly after the result, and was sitting on $3.37 on Tuesday morning.

Chairman Alasdair MacLeod described the 2019 financial year as "transformative".

"We achieved these results while successfully completing our capital raising and sharemarket listing.

"This move has seen us welcome more than 9000 new investors to the Napier Port share register, including 97 per cent of our employees, and will allow us to extend our near 150-year record of connecting Hawke's Bay and the surrounding regions with the people and the markets of the world."

He said the port is now well-placed to begin construction of its new wharf, in early 2020.

"6 Wharf will give us the capacity we need to grow with the region and deliver our customers the efficient and networked supply chain infrastructure they have come to expect from us."

Chief executive Todd Dawson said given the financial results the company was happy with where share prices were set in July.

He said the company had done a lot of research into what the share prices should be, and subsequently had seen a great return for investors.

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He said the company had delivered a strong financial performance with cargo volumes and revenue up from what was set at the time of the IPO.

"Another record apple crop drove an 8.6 per cent increase in apple container volumes, and 1.9 per cent for all containers, on last year, with the pipfruit industry per hectare production well above the global average and continuing to intensify.

Despite a correction in export log prices in the last quarter of the year, a record 2.6 million tonnes of logs were handled in the 2019 financial year.

That represents a doubling of log volume at the port over the past three years.

He said the port had also seen a growth in cruise ship numbers, with passengers spending around $28.4m in Hawke's Bay, according to Statistics New Zealand.

"Container services revenue rose 5.5 per cent from $58m to $61.2m, while bulk cargo revenue increased 11.4 per cent from $29m to $32.3m. Cruise revenue increased from $2.6m last year to $3.7m."

Other container services preformed ahead of forecast, but were down from the 2018 financial year, due to the loss of a significant depot customer early in the year.

Bulk cargo revenue growth of 11.4 per cent was driven by the 16.9 per cent year-on-year increase in log export volumes.

"Operating expenses as a percentage of revenue increased during the year, from 57.6 per cent to 57.9 per cent.

"This reflects a boost in staff numbers to build resilience and support growth, however these were higher than forecast due to the higher cargo volume and higher employee and site entrance safety improvement costs."

In the 2019 financial year, the port invested $17.6m in capital projects, including deposit payments on the new tug Kaweka.

Napier Port ended the financial year with cash and cash equivalents of $31.2m, higher than estimated at the time of the IPO due to spend on a number of capital investment projects being deferred into the 2020 financial year and working capital gains.