Napier Port posts strong earnings in Cyclone Gabrielle rebound

Napier Port expects another busy cruise ship season in the current financial year. Photo / Warren Buckland

Napier Port’s earnings bounced back in its latest financial year after being hit hard by Cyclone Gabrielle, and it expects the recovery to continue in the current year.

The company’s underlying net profit after tax came to $20.7 million in the September year, up 94.6% on the previous year.

Napier Port’s reported net profit after tax was $24.8m, up 49.7%.

A post-Cyclone Gabrielle business interruption insurance claim contributed $9.25m to earnings.

The cyclone, which hit the district in February 2023, dented the company’s rebound from the impact of Covid-19, damaging port’s customers’ crops, exporters’ premises and regional infrastructure and trade volumes.

Today, Napier Port said it was well-positioned for earnings growth.

Over the year, Napier Port’s revenue rose 15.9% to $141.4m due to volume growth across all categories and yield improvements.

The company declared a fully imputed final dividend of 6 cents per share, taking total dividends for the 2024 financial year to 9 cents per share, up from 5.25 cents for the prior year.

Chair Blair O’Keeffe said the result demonstrated Napier Port’s capability to deliver with improved operating conditions.

“As the regional recovery continued during the year, cargo volumes rebounded, and the operating leverage developed over recent challenging years saw a set of milestone financial results achieved,” he said.

Napier Port CEO Todd Dawson. Photo / NZME

Chief executive Todd Dawson said volume growth was achieved alongside the recovery by the region’s cargo owners.

“As port activity ramped up during the year, we were able to respond dynamically redeploying assets and resources to meet customer demand coming through the gates,” he said.

The announced closure of Winstone Pulp International (WPI) was a disappointing outcome for the Rangitīkei community, Napier Port and New Zealand manufacturing, he said.

“We await the outcome of the potential asset sale process and in the meantime are supporting WPI’s parent group with additional log exports.”

Cruise ship visits to Napier Port increased to 89, from 64 vessel calls in the prior year, and contributed $9.1m in revenue.

There was 13.5% growth in log volumes to 2.87 million tonnes, compared to 2.52 million tonnes in the prior year.

Log volume was supported by cyclone-affected windthrown logs and redirected logs that would have otherwise been processed into wood pulp or timber.

Napier Port repaid $20.5m of loans and borrowings to end the year with gross drawn debt of $109.5m.

On the outlook, Napier Port said while inflation pressures globally were retreating, regional exporters still faced elevated uncertainty in key international export markets.

The nearby Pan Pac mill curtailed activity when spot power prices spiked.

Napier Port said the regional recovery after Cyclone Gabrielle was continuing, and it looked forward to Pan Pac achieving more normal operating levels at its pulp mill during the first half of the 2025 financial year.

Log exports were flowing steadily and there were raised expectations among exporters that export market conditions would continue to improve.

The 2025 cruise season is set to be another busy one, with 85 bookings.

Napier Port debuted on the NZX in August 2019 at $2.91, a 16% premium to its $2.60 issue price, later escalating to a peak of $3.04.

The shares traded on Monday at $2.24.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.