Napier Port has released its financial results for the year ending 30 September, with performance down but recovering, and smoother sailing predicted ahead.
The Port earned a net profit after tax of $16.6 million off revenue of $118 million, down 18.8% from the previous year’s net profit of $20.4 million.
Post-Cyclone Gabrielle business interruption insurance claim contributed $7.25 million to earnings
The return of cruise ships – 64 calls in 2023 season (worth $5.3 million in revenue), with 92 bookings. this coming season – will help the Port’s recovery.
But mainly the Port’s revenues are driven by cargo flows. Port Chair Blair O’Keeffe noted that the Port had been rebounding at the beginning of the fiscal year as “cargo flows were bouyant” and “pandemic pressures, including constraints on labour and supply chain disruptions, were easing.”
Then the cyclone hit. Says O’Keeffe: “The landing of Cyclone Gabrielle in mid-February 2023, dented the rebound from the pandemic. It damaged our customers’ crops, exporters’ premises and regional infrastructure, diluted trade volumes and overshadowed the steady progress we had made.”
But looking ahead: “Nevertheless, thanks to the good progress in regional recovery efforts and positive signs in key export trades and the cruise industry, we are now looking forward to a resumption of the momentum we saw at the start of the year.”
The Port’s report noted that: “Several major apple exporters suffered less permanent flood damage to their trees than initially thought and replanting of damaged areas is already underway or complete. Continued investment in the region’s apple industry underscores the value of the cargo and the positive long-term outlook for volume growth across Hawke’s Bay’s horticulture sector.”
BayBuzz asked Port Chief Executive Todd Dawson what he saw as the Port’s biggest challenge in terms of reaching full stride.
“The biggest challenge now is really just the pace of recovery across the different cargo trades, for example the ramp up of Pan Pac’s operations during 2024 and the harvesting of crops.”
Pan Pac, the Port’s biggest customer, is expected to be back in swing around November and the Port expects the pick-up in its overall log trade, already begun, to continue. Whether the weather helps or hinders the crops coming out of Hawke’s Bay is rather more unpredictable.
Dawson adds: “While we anticipate less disruption during FY23, we are still expecting inflationary cost pressures together with uncertain global economic activity will remain a challenge.
Like our region, we’ve had 3-4 years of tough circumstances, but under ‘normal’ operating conditions like we had in the first half of the year, we’ve shown our capability when we’re not hindered by extraordinary events.”
BayBuzz has applauded the Port’s sustainability initiatives and we asked if the recent suppressed returns had any effect on those efforts?
Dawson replied: “At the end of this financial year 61% of all (100+) workstreams we identified two years ago have now started and/or are ongoing, compared to 47% last year.
“As we work towards the longer term goals, like net zero 2050, we aren’t taking our eye off the things we can be doing year on year to be more sustainable in our daily work. Initiatives like reducing waste, reducing equipment idle time, maximising use of lower consumption fleet where possible and introducing green energy equipment, like the Eco Reachstackers and Container Handlers we commissioned this year.”
The Port’s total carbon emissions did reduce by 10% in the reporting year, a consequence of the reduced cargo volumes moving through the Port, resulting in less fuel and electricity consumption.
The Port also uses an instructive emissions efficiency metric to drive its performance – aiming to reduce emissions per tonne of cargo handled. This number was up, in part because the emissions created by tugs to manoeuvre more cruise ships has no associated cargo tonnage to offset those emissions.
Cruise ships … a mixed blessing?