Napier Port upgrades annual earnings forecast

Napier Port has upgraded its earnings forecast for 2021. Photo / Hawke's Bay Today

Napier Port - New Zealand's fourth-largest port by container volume - has raised its earnings guidance for the September year to the point where it now expects it to level peg with last year's.

The port now expects its underlying result from operating activities to range between $39m and $42m, up from a guidance issued last November of $34m to $38m.

The result from operating activities came to $41.2m in the year to September, 2020.

"While we remain uncertain about the impact of labour shortages in the pipfruit and seasonal export industries, we expect to - assuming a continuation of the current market conditions - report an underlying operating result for the 2021 financial year similar to the prior year," chief executive Todd Dawson said.

The absence of cruise vessels calling at Napier Port due to border closures had largely been offset by an increase in bulk cargo revenue.

For the half-year to March, the company expects to report a profit from operating activities of $21m, slightly less than the $21.7m reported for the first half of the last financial year.

Dawson said Napier Port's catchment area - Hawke's Bay and the central and lower North Island - continued to benefit from solid demand for the region's food and fibre exports.

"The bounce-back we saw in log exports in the last quarter of our 2020 financial year has been sustained for the first half of our current financial year, supported by sustained strong log export markets," Dawson said.

"As our trade volume data for the half-year to March shows, these trends have underpinned a 17.1 per cent increase in bulk cargo volumes, including a 20.6 per cent increase in log volumes on the same period in the prior financial year," he said.

Container volumes for the half-year were in line with the same period a year ago.
Dawson said there had been a lift in year-to-date volumes of meat exports, and strong early-season pipfruit trades.

"These gains have been offset by reductions in containerised wood pulp and timber trades, following exporters' plant maintenance and shutdowns," he said.

Dawson said the port had faced challenges from the continued regional and global shipping schedule disruptions, port congestion and the disrupted flow of empty containers into New Zealand.

Total container volumes for the second quarter of the 2021 financial year increased 2.8 per cent to 78,000 twenty-foot equivalent units (TEU) from 76,000 last year as a result of increased empty and other container movements.

For the half-year, total container volumes of 135,000 TEU were in line with the prior period.

No cruise vessels called during the half-year due to the closed international border compared with 76 in the previous first half.

Napier Port listed in August 2019 at a premium to its $2.60 issue price.

The stock last traded at $3.45.