Down results but strategic success for Port

The Port’s yearly financial results reflect resilience in the face of a difficult trading environment and operational disruption.

Most of the numbers on Napier Port’s newly announced financial results for the year ending September are down – container volumes (-8%), bulk cargo volumes (-7.6%), ship visits (-12.3%) operating profits (-8.4%), underlying net profit (-$3.4 million) – even as revenue rose by $5m (4.6%). 

A spokesperson said the higher revenue was largely because the Port had moved to recover the significant rise in operating costs through the year for some of the bigger expense items such as insurance and fuel, but said operating efficiency was something they were always working to improve, especially in the face of rising prices.

Despite the tough operating environment, which includes labour constraints, worker absences due to Covid, customers’ limited productivity, adverse weather events and rising prices, chairman Alistair MacLeod said from a strategic perspective, it has been a “highly successful” year.

In particular, the delivery of 6-Wharf Te Whiti.

MacLeod said that the wharf’s completion was key in regard to its strategic goals around infrastructure and capabilities, because they underpin the success of not just the Port and the region but the whole economy of the central and lower North Island.

“The centrepiece of this achievement was the opening of 6 Wharf – Te Whiti – a multi-generational asset for Hawke’s Bay and the New Zealand supply chain that now positions Napier Port to support the easing of congestion and expand capacity across the entire North Island.

“Through its opening, we have delivered on the commitments we made when we launched our initial public offer and NZX listing in 2019. During the year we have also continued to deliver on our commitments to safety, sustainability and to building more diversity and inclusion into our workforce.”

The wharf came in ahead of schedule and under budget – a rare achievement. Final construction costs were $171m, below the $173m-to-$190m.

BayBuzz enquired how the Port achieved this. A spokesperson said timing of the construction had been favourable, beginning more than two years ago, compared to what it would be like in the current environment.

“Having said that, the ground-breaking and blessing ceremony for the project happened the same month New Zealand had its first case of Covid, February 2020. However, the overriding reason is very good project management execution by the whole Napier Port team. As well as choosing partners with similar values to ourselves and prioritising consultation early on.”

Napier Port’s chief executive Todd Dawson said it was “an outstanding achievement in the history of New Zealand infrastructure investment”.

“It is a credit to our people that amid these challenges they did not waiver from their commitment to our region and our customers. It is well understood across Napier Port that our success is linked to the success of our regional economy and I am proud to lead a team that is proud to service our region.”

MacLeod said the coming year held many challenges including the continued labour shortage, inflationary pressures, rising interest rates and geopolitical tensions, but expected next year’s results to sit between $42m and $48m, with the new wharf putting the Port in a strong financial position.

“Directors have therefore resolved to pay a fully imputed final dividend of 4.7 cents per share, taking total dividends for the 2022 financial year to 7.5 cents per share. We look forward to providing a further update at our annual meeting in December,” he said.

The Port will see a change of chair in December as MacLeod steps down at the Port’s annual meeting after eight years of service. Current independent non-executive director Blair O’Keefe will replace him as chair.

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Photo: Alphapix, John Cowpland