Napier Port Holdings Ltd · NZX:NPH
Napier Port — FY2023 Earnings Presentation
34 slides from Napier Port's earnings presentation, Nov 1, 2023
Slide 1: Investor Presentation FY2023
INVESTOR PRESENTATION FY2023
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This presentation has been prepared by Napier Port Holdings Limited (together with Port of Napier Limited, "Napier Past performance: Any past performance information given in this presentation is given for illustrative purposes only Port"). This presentation is being
Slide 3: Presenting Today
PRESENTING TODAY BLAIR O'KEEFFE TODD DAWSON KRISTEN LIE CHAIR CHIEF EXECUTIVE CHIEF FINANCIAL OFFICER 3
Slide 4: Welcome and Introduction
WELCOME AND INTRODUCTION BLAIR O’KEEFFE, CHAIR Strong growth in revenue and operating earnings first half Volumes and results impacted by cyclone disruptions Lifeline asset providing a critical regional function Track record of delivery and resilience Confidence in volume bounce back retained in a m
Slide 5: FY2023 Overview
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Slide 6: Muted Second Half Volume Following Cyclone
MUTED SECOND HALF VOLUME FOLLOWING CYCLONE TRADE OVERVIEW FY2023 Variance Volume FY2023 FY2022 kT / TEU / calls % Total cargo (kT) 4,614 5,392 -778 -14.4 Containerised cargo (TEU) 222,000 254,000 -32,000 -12.7 Bulk cargo (kT) 3,184 3,650 -466 -12.8 - Logs exports (kT) 2,524 2,844 -320 -11.3 Cruise v
Slide 7: Record Revenue Despite Challenges
RECORD REVENUE DESPITE CHALLENGES FINANCIAL RESULTS OVERVIEW FY2023 FY2022 Variance $M $M $M % Revenue 118.4 114.5 +3.9 +3.4 Result from operating activities 37.2 40.1 -2.9 -7.1 Net profit after tax 16.6 20.4 -3.4 -18.8 Cash flow from operations 37.2 33.0 +4.2 +12.7 • Revenue growth of 3.4% on 14.4%
Slide 8: Adaptability Maintained Momentum and Opportunities
ADAPTABILITY MAINTAINED MOMENTUM AND OPPORTUNITIES CUSTOMER FOCUS, CREATING VALUE, WELLBEING • Prioritised customer needs • Protecting cargo, maintaining access routes and shipping services • 8/10 customer satisfaction score • Agile and responsive 'whole of port’ planning • Wood chip export • Re-all
Slide 9: Sustainability Reporting
SUSTAINABILITY REPORTING STRATEGY AND THIRD TCFD • Total carbon emissions (Scope 1, 2 and 3) reduced by 10% on prior year • Continuous progress on strategy and action plan: • 61% of initiatives ongoing or complete (up from 47% prior year) • Climate change risk assessment updated with new climate dat
Slide 10: Financial & Operating Performance
FINANCIAL & OPERATING PERFORMANCE
Slide 11: Record Revenue on Impacted Trade Volume
RECORD REVENUE ON IMPACTED TRADE VOLUME • 3.4% year-on-year (YoY) increase in total revenue by $3.8m to a new high of $118.4m • Cruise return contributed $5.3m • Container services decreased $2.7m on 12.7% lower volume • Bulk cargo revenue increased $0.4m on 12.8% lower volume • Revenue growth large
Slide 12: Container Services Revenue Resilient Despite Volume Fall
CONTAINER SERVICES REVENUE RESILIENT DESPITE VOLUME FALL AVERAGE REVENUE PER TEU INCREASED 10.2% • Container services revenue decreased 3.8% YoY to $67.8m • Total TEU volume decreased 32,000 (-12.7%) YoY • Full containers down 24,000 TEU, empties down 8,000 TEU, and tranships and DLRs flat • Average
Slide 13: Bulk Cargo – Revenue Maintained on Lower Volume
BULK CARGO – REVENUE MAINTAINED ON LOWER VOLUME • Bulk revenue increased 0.9% YoY to $41.8m • Volume decreased 12.8% to 3.2 million tonnes • Bulk cargo average revenue per tonne increased 15.9% to $13.11/T from $11.33/T • Primarily cargo mix and average rate increases • Increased contribution from d
Slide 14: Log Volumes Ease but Stable Given Market Conditions
LOG VOLUMES EASE BUT STABLE GIVEN MARKET CONDITIONS • Log export volume decreased 320k tonnes (-11.3%) to 2.5 million tonnes • Log export market conditions generally subdued • Weak second and third quarters particularly following cyclone • Stronger Q4 in line with 2022 Q4 • Supported by Pan Pac expo
Slide 15: The Welcome Return of Cruise
THE WELCOME RETURN OF CRUISE • Return of cruise generated a record $5.3m revenue contribution • Currently 92 vessels booked for FY2024 season, previous peak 76 visits in FY2020 CRUISE REVENUE AND VISITS FY2023 REVENUE COMPOSITION (VERSUS FY2022) Other $6.0 90 Cruise 3.0% 4.5% (+0.7%) 80 (+4.5%) $5.0
Slide 16: Flattened Opex Run-Rate in High Inflationary Environment
FLATTENED OPEX RUN-RATE IN HIGH INFLATIONARY ENVIRONMENT • Total opex increased $6.7m to $81.1m YoY • Additional cost control measures introduced post-cyclone • Limited directly variable opex component • Recent semi-annual opex run-rate contained despite continuing significant underlying cost inflat
Slide 17: Lower Operating Result Driven by Lower Trade Volume
LOWER OPERATING RESULT DRIVEN BY LOWER TRADE VOLUME • Result from operating activities down $2.8m (7.1%) • $14.3m decrease attributed to lower trade volume, partly mitigated by the return of cruise (+$5.3m) • ARPU growth greater than operating expense growth • Excludes $7.25m insurance income from p
Slide 18: Net Profit Reduced on Post Te Whiti Depreciation and Finance Costs
NET PROFIT REDUCED ON POST TE WHITI DEPRECIATION AND FINANCE COSTS • Underlying NPAT¹ decreased by $8.0m (42.8%) to $10.7m • As flagged, increased depreciation (+$2.7m) and finance costs (+$5.9m) post Te Whiti construction period • Reported NPAT decreased by $3.8m (18.8%) to $16.6m • Includes $6.5m
Slide 19: Capital Expenditure – Reduced Spend Post Te Whiti Wharf
CAPITAL EXPENDITURE – REDUCED SPEND POST TE WHITI WHARF • Capital expenditure of $12.3m1 • $4.5m mobile plant – four Eco container handling machines, log loading mobile plant • $2.4m additional paving capacity, primarily for additional log storage area options • $1.4m post cyclone restorative dredgi
Slide 20: Cash Flow
CASH FLOW FY2023 FY2022 Var $M $M $M Operating cash flows 37.2 33.0 +4.2 Investing cash flows (14.0) (71.9) +57.9 Dividends (12.8) (15.0) +2.2 Other financing cash flows (7.2) (1.6) -5.6 Increase / (reduction) in cash and cash equivalents (0.8) 0.5 (Increase) / reduction in total gross drawn loans a
Slide 21: Capital Management
CAPITAL MANAGEMENT SOUND FUNDING POSITION WITH LOW INTEREST RATE RISK EXPOSURE • Debt to EBITDA of 2.98x at 30 September • Down from 3.36x at 30 September 2022 • Within long-term target range of 2.0x – 3.0x • Additional undrawn credit facilities available of $50m • Weighted average term to debt matu
Slide 22: Volume and Earnings Outlook
VOLUME AND EARNINGS OUTLOOK FUNDAMENTALS REMAIN STRONG: EARNINGS GROWTH LEVERAGED TO RECOVERY Region and key cargo customers recovering & replanting Fundamentals of ‘food and fibre’ remain strong New season, new crops; record cruise bookings for FY2024 Baseline cargo recovery expected FY2024-25 Trad
Slide 23: Conclusion and Current Outlook
CONCLUSION AND CURRENT OUTLOOK LOOKING FORWARD TO FY2024 Noting dependence on timing and cadence of key cargo return, we have confidence in core trade volume recovery and earnings potential Anticipate improved operating conditions relative to FY2023 Continuing inflationary environment; continued cos
Slide 24: FY2023 Dividend
FY2023 DIVIDEND Final dividend of 3.55 cps declared Fully imputed Record date: 4 December 2023 Payment date: 14 December 2023 Total dividends, in respect of FY2023, of 5.25 cps, fully imputed (FY2022: 7.5 cps) 24
Slide 25: Questions
QUESTIONS
Slide 26: Appendices
APPENDICES The following appended financial information provides a summary of financial information for the year ended 30 September 2023 (FY2023) compared to the corresponding period in 2022 (FY2022). Reconciliations provided are extracted from and should be read in conjunction with the Supplemental
Slide 27: Revenue
REVENUE NZ$000 FY2023 FY2022 Container services 67,756 70,457 Bulk cargo 41,761 41,370 Cruise 5,321 12 Sundry revenue 995 277 Revenue from port operations 115,833 112,116 Revenue from property operations 2,551 2,407 Total operating income 118,384 114,523 27
Slide 28: Operating Expenses
OPERATING EXPENSES Employee benefit expenses NZ$000 FY2023 FY2022 Wages & salaries 40,591 37,111 Other employee benefit expenses 2,922 2,858 Total employee benefit expenses 43,513 39,968 Property and plant expenses NZ$000 FY2023 FY2022 Plant expenses 6,262 6,777 Site expenses 2,365 1,653 Fuel & powe
Slide 29: Operating Expenses
OPERATING EXPENSES Other operating expenses NZ$000 FY2023 FY2022 Administration expenses 7,648 5,950 Occupancy expenses 8,680 6,816 Contract labour 3,548 4,319 Other staff expenses 1,658 1,999 Total other operating expenses 21,533 19,084 29
Slide 30: Capital Expenditure
CAPITAL EXPENDITURE NZ$000 FY2023 FY2022 Development capex 6 Wharf construction - 45,096 Mooring plant and equipment 351 3,497 Other development capex 3,372 3,325 Total development capex 3,722 51,918 Replacement capex 8,224 7,829 Compliance and other capex 389 441 Total capex including capitalised f
Slide 31: Reconciliation of Underlying Net Profit After Tax
RECONCILIATION OF UNDERLYING NET PROFIT AFTER TAX¹ NZ$000 FY2023 FY2022 Reported net profit after tax 16,587 20,421 Adjustments: Fair value movements on investment properties (1,225) (1,800) Cyclone Gabrielle related expenses 708 - Cyclone Gabrielle business interruption insurance income (7,250) - T
Slide 32: Reconciliation of Underlying Net Cash Flows from Operating Activities
RECONCILIATION OF UNDERLYING NET CASH FLOWS FROM OPERATING ACTIVITIES¹ NZ$000 FY2023 FY2022 Reported net cash flows from operating activities 37,239 33,040 Adjustments Cyclone Gabrielle related expenses 708 - Cyclone Gabrielle business interruption insurance income (3,395) - Tax impact of adjustment
Slide 33: Dividend Policy
DIVIDEND POLICY • The Board is targeting paying total dividends within a range of 70% to 90% of Free Cash Flow1 • Free Cash Flow1 is a non-NZ GAAP measure adopted by Napier Port. It excludes capital expenditure on development projects and interest costs capitalised during construction • The payment
Slide 34: Further Information on Napier Port
FURTHER INFORMATION ON NAPIER PORT To learn more about Napier Port and what it does please refer to our website at www.napierport.co.nz See our website Investor Centre for: • Share price information • Links to NZX results and market announcements • Key calendar dates • Publications, including: - Ann