Covid-19 has again made its presence felt with Napier Port announcing lower revenue and earnings for the nine months to 30 June 2020, and a significant fall in profitability in the third quarter (April to June).
The results are reflected in share prices, of interest to Hawke’s Bay’s many Port shareholders. A year ago, Port shares were selling for $3.09, then rose steadily, peaking at $4.10 on 3 January … now at this writing down to $3.55.
And of interest to all Regional Council ratepayers, the unsettled financial situation means that Napier Port will still defer until November its decision on awarding a dividend to HBRC.
The earnings decrease is due to restrictions in container and bulk cargo volumes across its wharves as a result of Covid-19 disruptions, with revenue down 1.4% in the nine-month period to $76.6 million from $77.6 million last year. However, it was the the third-quarter revenue that experienced the most significant decrease, down 16.2% to $24.3 million from $29 million in the same period last year.
In the same quarter, container volumes fell 17.4% to 74,000 TEU (Twenty-foot Equivalent Unit) due to the Level 4 lockdown on non-essential cargo and lower number of empty container imports. Bulk cargo volume was also down, dropping 24.2% to 0.6 million tonnes as a result of the cessation of log harvesting during Covid-19 Alert Level 4.
And it wasn’t great reading for Napier Port’s profitability in the third quarter either, with a 30.1% drop in pro-forma EBITA to $9.3 million from $13.3 million for the same period last year. And reported net profit after tax was down by 17.2% to $5.9 million from $7.1 million.
While the nine-month results see a less significant drop in volumes, the Port says the trade outlook is uncertain due to Covid-19 and broader economic conditions and month-to-month cargo volatility.
“The expectation for the 2020 Financial Year pro forma NPAT (Net Profit After Tax) is approximately $20 million, assuming no material change to trading conditions. There is no update to the final dividend expectation, which will be reviewed in November.”