Napier Port released its 2020 annual results this week, and it appears to have weathered the Covid storm, buoyed by the region’s strong primary production sector … at least for the time being.
In a justifiably upbeat statement, Napier Port Chair Alasdair MacLeod, noting that the Port performed well enough to return its $2m coronavirus wage subsidy, said:
“Despite all the uncertainties associated with the pandemic, our management and people have worked through these unique challenges with commitment and calm. This resilience operationally, backed up by tight financial controls, has left Napier Port in a stronger position than we anticipated at the outset of COVID-19. It has further cemented our position as the major freight gateway for our region and the lower North Island.”
Covid disruptions lowered both container and bulk cargo (logs, considered ‘non-essential during lockdown) volume, yet revenue rose slightly, topping $100 million, as did net profit. Lower volumes were offset by higher revenue per unit, and cost-cutting measures were taken.
As a result, the Port was able to announce a dividend of 5 cents a share, yielding $10 million or slightly less than half of what was projected pre-Covid (at the time of the IPO).
For ratepayers, that’s $5.5 million to HBRIC, the Regional Council’s holding company, about half of what was projected in HBRC’s long term plan, leaving a sizable shortfall in funding to HBRC.
Meantime work on new capacity-enhancing 6 Wharf proceeds apace, with no material change to completion date (scheduled for late 2022) or cost (($173m-$190m).
Port officials do express caution about the future.
No cruise ships (which account for less than 5% of Port revenue) are expected for the coming season. Labour shortages could constrain harvesting and therefore food exports. And of course the global economy is still reeling from the coronavirus, disrupting both export markets and shipping patterns.
Export expert Murray Painter warned here in BayBuzz in recent days about the potential for container shortages that could affect getting HB’s imminent fruit and veggie harvest to market with the Port’s usual efficiency.
Chairman MacLeod summed up the future outlook as follows:
“Sentiment amongst our customers remains upbeat and positive, particularly in the meat and forest products sectors, however significant uncertainty remains for our cruise industry customers entering into the new year. Neither Napier Port nor its customers are complacent about the risks to both the global, national and regional economy as we look to the future.
“In addition to these uncertainties, there are secondary effects which have a direct bearing on the region and cargo flows through Napier Port, including access to labour to harvest our region’s primary produce and ongoing congestion in supply chains in the upper North Island.
“As we signalled earlier in the year, we do not expect a resumption of cruise ship visits this cruise season and we are conscious of the uncertainty regarding the timing and eventual extent of this industry’s revival.”