Napier Port Holdings Ltd · NZX:NPH
Napier Port — H1 2024 Earnings Presentation
31 slides from Napier Port's earnings presentation, May 22, 2024
Slide 1: Half Year Results to 31 March 2024
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: HY2024 Overview
HY2024 OVERVIEW BLAIR O’KEEFFE, CHAIR Robust earnings growth with trade volumes by key customers and cargoes returning towards pre-cyclone levels Fundamentals are strong – cargo diversity, infrastructure and capability, operating leverage, track record of delivery and resilience Critical regional fu
Slide 5: Volume Growth Across Key Trades
VOLUME GROWTH ACROSS KEY TRADES TRADE OVERVIEW FY2024 HALF YEAR Variance Volume HY2024 HY2023 kT / TEU / calls % Total cargo (kT) 2,527 2,283 +244 +10.7 Containerised cargo (TEU) 98,000 119,000 -21,000 -17.3 Bulk cargo (kT) 1,883 1,548 +335 +21.6 - Logs exports (kT) 1,552 1,144 +408 +35.7 Cruise ves
Slide 6: Strong Earnings Growth Driven by Volume Uplifts
STRONG EARNINGS GROWTH DRIVEN BY VOLUME UPLIFTS FINANCIAL RESULTS OVERVIEW FY2024 HALF YEAR HY2024 HY2023 Variance $M $M $M % Revenue 70.6 64.1 +6.5 +10.1 Result from operating activities 27.4 21.9 +5.5 +25.1 Net profit after tax – underlying¹ 11.1 7.5 +3.6 +48.3 Cash flow from operations – underlyi
Slide 7: Cruise and Bulk Cargo Lead Revenue Growth
CRUISE AND BULK CARGO LEAD REVENUE GROWTH • 10.1% total revenue growth half year-on-half year (HoH) • Container services revenue down $2.8m (7.8%) to $33.6m • Bulk cargo revenue increased $5.6m (27.1%) to $26.2m • Cruise revenue up $3.8m (74.3%) to $8.9m HY2024 REVENUE PROGRESSION HY2024 REVENUE COM
Slide 8: Container Revenue Down on Lower Volume Post Cyclone
CONTAINER REVENUE DOWN ON LOWER VOLUME POST CYCLONE VOLUME RECOVERING – YIELD MANAGEMENT GAINS ADD OPERATING LEVERAGE • Container Services revenue decreased $2.8m (7.8%) to $33.6m HoH • Total TEU volume decreased 21,000 (17.3%) HoH • Full containers down 9,000 TEU, empties down 6,000 TEU, and transh
Slide 9: Bulk Cargo – Export Logs Drive Earnings Growth
BULK CARGO – EXPORT LOGS DRIVE EARNINGS GROWTH • Bulk revenue increased $5.6m (27.1%) to $26.2m HoH • Volume increased by 0.33 million tonnes (+21.6%) to 1.88 million tonnes HoH • Export logs increased by 0.41 million tonnes (+35.7%) to 1.55 million tonnes HoH • Bulk cargo average revenue per tonne
Slide 10: Record Log Volume in Soft Export Market
RECORD LOG VOLUME IN SOFT EXPORT MARKET • Log export volume increased 0.41 million tonnes (+35.7%) to 1.55 million tonnes HoH • Prior year second quarter impacted by cyclone • Log export market conditions generally subdued, but first half volumes elevated by CNI wind-throw and Pan Pac LOG EXPORT VOL
Slide 11: Flattened Total Opex Run Rate
FLATTENED TOTAL OPEX RUN RATE FOCUSED COST MANAGEMENT SUPPORTING MARGIN RECOVERY AND OPERATING LEVERAGE • Maintaining continued cost and capital discipline • Total opex increased $0.9m to $43.2m HoH, • +1.8% compared to 2H 2023, +2.2% compared to 1H 2023 • Continuing cost inflation, but at lower lev
Slide 12: Margin Recovery on Volume Uplifts and Stable Cost Base
MARGIN RECOVERY ON VOLUME UPLIFTS AND STABLE COST BASE DEMONSTRATING OPERATING LEVERAGE EFFECT • Cost focus and operating leverage providing strong growth on volume uplifts in the period • Operating margin recovery to 38.8% for HY2024 RESULT FROM OPERATING ACTIVITIES AND MARGIN % $30 40.0% $27.4m $2
Slide 13: Improved Operating Result Driven by Improved Yield and Cruise Growth
IMPROVED OPERATING RESULT DRIVEN BY IMPROVED YIELD AND CRUISE GROWTH • Result from operating activities up $5.5m (+25.1%) • Overall increase driven by ARPU growth and increased cruise calls • Supported by cost control and higher log exports largely offsetting lower container volume RESULT FROM OPERA
Slide 14: Net Profit Growth on Higher Operating Result
NET PROFIT GROWTH ON HIGHER OPERATING RESULT • Underlying NPAT¹ increased by $3.6m (48.3%) to $11.1m • Reported NPAT increased by $5.6m (64.8%) to $14.3m • Increase driven by operating result and net contribution of $7.1m from business interruption insurance claim • Partially offset by lower propert
Slide 15: Capital Expenditure Spend Limited
CAPITAL EXPENDITURE SPEND LIMITED • Capital expenditure of $7.0m1 • $2.7m site asset management plan – 3 Wharf fendering replacement, other major maintenance • $1.5m mobile plant – Eco reachstacker, electric sweeper, other minor plant replacements • $1.5m additional paved area • Near term future cap
Slide 16: Cash Flow & Liquidity
CASH FLOW & LIQUIDITY HY2024 HY2023 Var $M $M $M Operating cash flows 25.3 21.4 +3.9 Investing cash flows (7.4) (5.8) -1.6 Dividends (7.1) (9.4) +2.3 Reduction in total gross debt (9.0) - -9.0 Other financing cash flows (3.3) (4.1) +0.8 Increase in cash and cash equivalents (1.5) 2.1 • Good growth i
Slide 17: Capital Management
CAPITAL MANAGEMENT • Debt to EBITDA of 2.16x at 31 March • Down from 2.98x at 30 September 2023 • Within long-term target range of 2.0x - 3.0x • Weighted average term to debt maturity of 3.2 years • 92% of gross drawn debt subject to fixed interest rates at 31 March 2024 FIXED INTEREST RATE PROFILE
Slide 18: Risk Management and Insurance
RISK MANAGEMENT AND INSURANCE INSURANCE CAPTIVE SET-UP AND RESERVE FUND • Insurance captive entity established for upcoming FY2024 insurance renewal • Board approved establishment of insurance captive risk reserve (investment) fund: • Available for self-insured MD & BI losses; • Increase short term
Slide 19: Sustainability Emissions Reporting
SUSTAINABILITY EMISSIONS REPORTING LOWER GROSS AND RELATIVE EMISSIONS ON LOWER CONTAINER ACTIVITY • Total (unaudited) emissions for half year reduced 16.1% HoH • Scope 1 decreased 15.6% • less fuel usage on reduced container volumes, lower generator use • high generator usage last year following Cyc
Slide 20: Conclusion and Outlook
CONCLUSION AND OUTLOOK FUNDAMENTALS STRONG: VOLUME RECOVERY UNDERWAY Demonstrated diverse and resilient cargo base, operational adaptability Positive operating leverage evident from the volume return in bulk and cruise, together with cost management For 2H 2024, expecting reducing log export volume,
Slide 21: HY2024 Interim Dividend
HY2024 INTERIM DIVIDEND Declared interim dividend of 3.0 cps (2023: 1.7 cps) Fully imputed Record date: 14 June 2024 Payment date: 27 June 2024 21
Slide 22: Questions
QUESTIONS
Slide 23: Appendices
APPENDICES The following appended financial information provides a summary of financial information for the half year period ended 31 March 2024 (HY2024) compared to the corresponding half year period in 2023 (HY2023). Reconciliations provided are extracted from and should be read in conjunction wit
Slide 24: Revenue
REVENUE NZ$000 HY2024 HY2023 Container services 33,594 36,421 Bulk cargo 26,193 20,602 Cruise 8,903 5,108 Sundry revenue 298 692 Revenue from port operations 68,988 62,823 Revenue from property operations 1,594 1,313 Total operating income 70,582 64,136 24
Slide 25: Operating Expenses
OPERATING EXPENSES Employee benefit expenses NZ$000 HY2024 HY2023 Wages & salaries 20,368 20,860 Other employee benefit expenses 1,591 1,325 Total employee benefit expenses 21,959 22,185 Property and plant expenses NZ$000 HY2024 HY2023 Plant expenses 3,022 3,227 Site expenses 1,434 833 Fuel & power
Slide 26: Operating Expenses
OPERATING EXPENSES Other operating expenses NZ$000 HY2024 HY2023 Administration expenses 3,466 3,686 Occupancy expenses 5,014 4,270 Contract services 4,253 3,707 Other staff expenses 815 842 Total other operating expenses 13,548 12,505 26
Slide 27: Capital Expenditure
CAPITAL EXPENDITURE NZ$000 HY2024 HY2023 Development capex 1,713 714 Replacement capex 5,034 5,864 Compliance and other capex 226 344 Total capex including capitalised finance costs 6,972 6,923 Movement in fixed asset creditors 399 (1,375) Capex per cash flow 7,371 5,548 27
Slide 28: Reconciliation of Underlying Net Profit After Tax
RECONCILIATION OF UNDERLYING NET PROFIT AFTER TAX¹ NZ$000 HY2024 HY2023 Reported net profit after tax 14,320 8,690 Adjustments: Fair value movements on investment properties (129) (1,225) Cyclone Gabrielle related expenses 108 Cyclone Gabrielle business interruption insurance income (7,243) Tax impa
Slide 29: Reconciliation of Underlying Net Cash Flows from Operating Activities
RECONCILIATION OF UNDERLYING NET CASH FLOWS FROM OPERATING ACTIVITIES¹ NZ$000 HY2024 HY2023 Reported net cash flows from operating activities 25,292 21,369 Adjustments Cyclone Gabrielle related expenses 108 - Cyclone Gabrielle business interruption insurance income (2,855) - Tax impact of adjustment
Slide 30: 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 the interest costs capitalised during construction • The paym
Slide 31: 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