Chief Executive Todd Dawson said: “Today’s result reinforces the continuing recovery of regional trade following Cyclone Gabrielle in February 2023.
“Trade for the nine months has been driven by strong log exports, cruise vessel calls, and the bounce back in containerised exports including fresh produce, apples, meat, and wood pulp and timber. As anticipated, as cargo volumes return our strategies focused on yield management linked to investments in infrastructure and customer services, and cost management are demonstrating strong operating leverage and earnings growth.
“While the regional export-led trade recovery continues post cyclone, most regional businesses continue to face a challenging economic environment. We note the current challenges across NZ’s major manufacturing industries due to abnormally high energy costs. This has led to two of our largest cargo customers, WPI and Pan Pac, to undertake temporary shutdowns of either all or part of their timber and pulp processing facilities. During this period, we expect both companies will take the opportunity to undertake repairs and maintenance and that we will continue to receive and pack timber through our Port Pack operation, and to receive logs for export from Pan Pac.”
Financial results
Container services
Container services revenue for the quarter of $24.3 million increased 33.4% from $18.2 million in the same period last year. For the nine months, container services revenue increased by 6% to $57.9 million from $54.6 million as higher revenue per TEU (Twenty-foot equivalent container unit) offset lower container volumes.
Average revenue per TEU for the nine months increased 8.5% to $339 from $313 in the same period last year. This was driven by container mix, tariff increases, cost recoveries and increased utilisation of other container services, partially offset by lower Port Pack volumes.
Container volumes for the quarter increased 29.6% to 72,000 TEU as a result of the continuing regional recovery following the product losses caused by Cyclone Gabrielle in the prior year comparative period. For the nine months, container volumes decreased 2.3% to 171,000 TEU from 175,000 TEU in the
same period last year.
Bulk cargo
Bulk cargo revenue for the quarter increased 18.9% to $11.1 million from $9.4 million in the same period last year, as bulk volumes increased 7.4% from 0.7 million tonnes to 0.8 million tonnes. For the nine months, bulk cargo revenue increased by 24.6% to $37.3 million from $30 million as volumes increased
17.1% to 2.6 million tonnes from 2.3 million tonnes in the same period a year ago.
Log export volume for the quarter increased by 4.6% to 0.6 million tonnes, and for the nine-month period increased by 24.9% to 2.2 million tonnes from 1.8 million tonnes. The strong volume momentum of the first half year slowed in the third quarter, in line with anticipated decreases in volumes from central North Island windthrown forests and unprocessed logs sourced from Pan Pac.
Average revenue per tonne for the nine months increased 6.3% to $14.10 from $13.26 in the same period last year, driven by yield increases and an increased contribution from our debarking operation, partially offset by fewer vessel calls.
Cruise services
The cruise season completed in April with 89 vessel calls and nearly 140,000 passengers visiting the region, contributing $9.1 million to revenue. This compares to 64 vessel calls contributing $5.3 million to revenue in the prior comparative period.
There are currently 85 cruise vessel bookings for the upcoming 2025 season, and we note industry expectations of a further reduced Australasian cruise season with fewer vessels and port calls for 2026.
Operating results
The result from operating activities for the third quarter increased 64.3% to $12.3 million from $7.5 million in the prior year period, as the third quarter revenue increase of $8 million exceeded the increase in operating expenses of $3.2 million.
The result from operating activities for the nine months increased 35.1% to $39.6 million from $29.3 million. Positive operating leverage was demonstrated with higher bulk and cruise volumes driving higher revenue of $14.4 million, and effective cost management limiting the increase in operating expenses to $4.1 million. Increased operating expenses resulted from higher insurance costs, higher contract services for containers, and wage inflation.
Underlying net profit after tax for the third quarter increased by 156.7% to $4.8 million from $1.9 million in the same period last year. For the nine months this increased by 70% to $15.9 million from $9.3 million primarily due to the higher operating result.
Reported net profit after tax for the third quarter increased 13.7% to $4.8 million from $4.2 million in the same period last year, and for the nine months increased 48.2% to $19.1 million from $12.9 million. Reported net profit after tax for the nine months included a $7.2 million before tax contribution from the Cyclone Gabrielle business interruption insurance claim and $2.0 million of additional deferred tax expense arising from the removal of tax depreciation on commercial buildings.
CAPITAL MANAGEMENT
Over the nine-month period Napier Port has invested $8.6 million in capital assets, including additional terminal paving, replacement mobile plant and site asset management works.
Cash flows from operating activities increased significantly by $19.4m, or 58.7%, to $52.3 million from $33 million in the same period last year. Operating cash flow was supported by net $7.5 million of business interruption insurance income receipts and favourable working capital movements.
Napier Port ended June 2024 with total drawn debt of $108 million, down from $130 million at the end of the 2023 financial year, and undrawn bank facilities of $72 million, and with a Debt to EBITDA ratio of 1.87 times.
