Return of log exports boosts Napier Port's Q3 earnings

Log exports have boosted Napier Port's third quarter earnigns. Photo / Hawke's Bay Today

A bounce back in log exports has boosted Napier Port's third quarter earnings by 33.7 per cent to $7.9 million, but in broad terms the company does not expect current supply chain disruptions to improve any time soon.

Napier Port, which listed in August 2019, said the resilience and diversity of its trade portfolio continued to mitigate the effect of container shipping disruptions caused by the ongoing effects of the Covid-19 pandemic.

Revenue growth had been driven by increases in bulk cargo volumes, in particular, strong log exports.

For the third quarter to June 30, revenue rose by 25.3 per cent to $30.4m over the same period last year.

Bulk cargo revenue increased $4.3m, or 67.4 per cent, to $10.6m driven by a 75.6 per cent increase in log exports to 0.82m tonnes.

Container services revenue rose 10.5 per cent to $19.1m, as container volumes increased 8.3 per cent to 80,000 twenty foot equivalent units (TEU).

Revenue for the nine months rose 8.4 per cent to $83.0m and its profit for the period gained by just under 1 per cent to $18.4m.

Looking ahead, Napier Port said the impact of the current Covid Alert Level 4 lockdown would depend on how the situation develops.

Napier Port is deemed an essential business and remains open to support the flow of cargo.

The company did not change its existing guidance for the year to September, which is for an underlying profit of between $39m to $42m.

Log export volume increased by 36.1 per cent to 2.2m tonnes for the nine-month period because of sustained strong log export market conditions.

In the previous year, bulk cargo volumes were weakened when forestry stopped because of the level 4 lockdown.

Chief executive Todd Dawson said the year to date had been challenging.

"Missing container ship calls – 15 in the past three months – and a lack of schedule integrity resulting in the flow-on disruption to supply chains is now a feature of the New Zealand supply chain," he said.

"We do not see signs of this supply chain disruption abating in the immediate future," he said.

Over the nine months, Napier Port had invested $76.3m in capital assets, further progressing its strategic infrastructure development programme, led by the 6 Wharf development project.