Strong growth in bulk exports – particularly logs – helped to fill the gap left by the absence of cruise ship visits to Napier Port over the first half,but it was not enough to offset a slight fall in operating earnings over the period.
The port said its profit from operating activities came to $21.3m, down 2 per cent from the prior period’s result, due to a 2.4 per cent increase in total operating expenses – mostly increased insurance and employee benefit expenses.
Its net profit fell by 14.9 per cent to $10.6m as the prior year benefited from one-off tax income of $1.5m due to the reinstatement of tax depreciation on commercial buildings.
The board has opted to pay an interim dividend of 2.8 cents per share, after deciding against one last year due to uncertainty surrounding Covid-19.
“In the half year to the end of March 2021, strong growth in bulk exports, and a 20.6 per cent increase in log exports in particular, have offset the absence of cruise ships, which, prior to the Covid-19 pandemic, were a welcome source of business for both Napier Port and the region,” the company said.
Napier Port is sticking with its annual earnings guidance provided in April – an underlying profit of $39m and $42m – but it said continued challenges to container-based supply chains from regional and global shipping disruptions continued to impact on the free flow of cargo.
Demand for the region’s food and fibre exports remained robust.
“However, notwithstanding the Government’s recent moves to increase the availability of seasonal labour in the future, the impact of worker shortages on seasonal export industries remains uncertain,” chairman Alasdair MacLeod said.
Revenue for the half year rose by 0.6 per cent $52.6m.
Napier Port’s total container trade of 135,000 20-foot equivalent units was in line with the prior period, while bulk cargo volumes increased 17.1 per centto 1.87m tonnes.
Bulk cargo revenue increased $4.2m or 26.5 per cent to $20.2m driven by growth in log export volumes.
Log exports increased 20.6 per cent to 1.43m tonnes due to sustained strong log export market conditions.
No cruise revenue was earned in the half year, due to closed international borders, compared to $4.2m in the same year-ago period.
Chief executive Todd Dawson said the disruption in global shipping over the last year had presented considerable challenges to Napier Port and its customers.
“Solid log flows across Napier Port have been sustained in response to the strong export market conditions,” he said.
“At the same time, congestion – particularly in the upper North Island – has seen 26 container ships miss their scheduled calls,” Dawson said.
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