How did Napier Port (NZX:NPH) defy COVID-19 to report strong results?

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How did Napier Port (NZX:NPH) defy COVID-19 to report strong results?

 How did Napier Port (NZX:NPH) defy COVID-19 to report strong results?
Image source: Mr. Amarin Jitnathum, Shutterstock.com

Highlights

  • Napier reports strong performance in Q3 and in the nine months ended 30 June 2021.
  • The growth is mainly driven by log exports.
  • For FY22 keeps the guidance unchanged and also uncertain about the log export volumes.

Napier Port (NZX:NPH) on Monday announced improved revenue and earnings in Q3FY21 and for the nine months ended 30 June 2021. It reported that the impact of COVID-19 on container shipping was getting offset by resilience in its other trade portfolios.

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NPH revenue for Q3 rose by 25.3% to NZ $30 million from NZ$24 million pcp. Underlying net profit after tax increased 55.5% to NZ$6.7 million from NZ$4.3 million and reported net profit after tax increased 33.7% to NZ$7.9 million.
Also Read: Napier Port (NZX:NPH): Will it sail smoothly in its upcoming earnings report?

The revenue growth has been driven by mainly growth in bulk cargo volumes and strong log exports.
Related Read: What’s the reason for Napier Port’s (NZX:NPH) high trade volumes for Q1FY21?

Revenue for nine months

For the nine-month period also, the revenue of NPH grew by 8.4% at NZ$83.0 million from NZ$76.6 million versus pcp. Bulk cargo revenue was up by 38.1 % at NZ$30.8 million due to a 36.1% increase in log exports to 2.24 million tonnes. Container revenue rose only by 4.1% to NZ$50.2 million from NZ$48.2 million. 
Also Read: Sailing smooth: a glimpse into Port Stocks—POT, NPH and SPN


Cruise revenue was nil in the nine months under discussion as compared with NZ$4.2 million last year. Reported net profit after tax increased 0.7% to NZ$18.4 million.

Bulk cargo the main driver of revenues

Bulk cargo was the main driver for a strong performance by Napier Port. In Q3, bulk cargo revenues rose by 67.4% at NZ$10.6 million from NZ$6.4million last year. For the nine-month period, log export volume was up by 36.1% to NZ$2.2 million tonnes due to strong demand for log wood internationally.
Related Read: Which are the top 10 transportation stocks in New Zealand?

Chairman of NPH, Alasdair MacLeod, said that due to supply chain problems, the Company continued to witness disruptions in container trades due to several factors, but the port benefitted the most from the outside demand for NZ forest products, including log exports.

Outlook

The Company has not provided any change in the existing guidance. It says the impact of the current level-4 lockdown will depend on how the situation unfolds. The Port is an essential service, so it is open to the flow of cargos even at the time of lockdowns. Log exports which were the main drivers of revenues for the nine months may not do so in the coming months as there are early signs that the Chinese log market prices may be cooling off and the exporters are facing higher shipping costs, all this may have an impact on the volume of the log trade.

Further, the Company does not see a resumption of cruise ship visits in 2021/22. NPH also revealed detailed planning for the new warf was underway and that that would be live from 2022.

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