Napier Port Holdings Ltd · NZX:NPH
Napier Port — H1 2023 Earnings Presentation
29 slides from Napier Port's earnings presentation, May 24, 2023
Slide 1: Half Year Results to 31 March 2023
HALF YEAR RESULTS TO 31 MARCH 2023 INVESTOR PRESENTATION - 24 MAY 2023
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: HY2023 Overview
HY2023 OVERVIEW BLAIR O’KEEFFE, CHAIR Tracking to upper end of previous guidance pre-cyclone; trade volumes and results impacted on disruptions Diverse cargo portfolio provides resilience and trade environment for key cargoes remains stable Lifeline asset providing a critical regional function Funda
Slide 5: Positive Trade Outlook Diluted by Cyclone Gabrielle
POSITIVE TRADE OUTLOOK DILUTED BY CYCLONE GABRIELLE TRADE OVERVIEW FY2023 HALF YEAR Variance Volume HY2023 HY2022 kT / TEU / calls % Total cargo (kT) 2,283 2,513 -230 -9.1 Containerised cargo (TEU) 119,000 113,000 +6,000 +5.7 Bulk cargo (kT) 1,548 1,707 -159 -9.3 - Logs exports (kT) 1,144 1,316 -172
Slide 6: Accelerated Revenue and Earnings Growth
ACCELERATED REVENUE AND EARNINGS GROWTH FINANCIAL RESULTS OVERVIEW FY2023 HALF YEAR HY2023 HY2022 Variance $M $M $M % Revenue 62.3 50.7 +11.4 +22.8 Result from operating activities 21.9 16.4 +5.5 +33.0 Net profit after tax - underlying¹ 7.5 7.2 +0.3 +3.9 Cash flow from operations 21.4 13.0 +8.4 +64.
Slide 7: Cyclone Gabrielle: Impact on Cargo Trades
CYCLONE GABRIELLE IMPACT ON CARGO TRADES HORTICULTURE AND OTHER SEASONAL PRODUCE Reduced crop 2023, spring update EXPORT LOGS Minimal forest losses in immediate Hawke's Bay forestry catchment PAN PAC Damage to timber & pulp processing facilities, restart expected from September WPI WPI supply chain
Slide 8: Cyclone Gabrielle: Regional Infrastructure
CYCLONE GABRIELLE REGIONAL INFRASTRUCTURE NAPIER PORT Minimal impact on port's infrastructure and operations ROAD AND RAIL NETWORK Key SH road access to port restored, rail reinstated to Hastings with link to port ongoing through to Q1 FY24 COASTAL SHIPPING Freight alternative to roading for East Co
Slide 9: Improved Container Services Operating Environment
IMPROVED CONTAINER SERVICES OPERATING ENVIRONMENT • Container Services revenue increased $4.4m (14.5%) to $34.5m half year-on-half year (HoH) • Total TEU volume increased 6,000 (5.7%) HoH • Full containers down 5,000 TEU, empties up 5,000 TEU, and tranships and DLRs up 6,000 TEU • Average revenue pe
Slide 10: Bulk Cargo – Lower Volume Offset by ARPU Growth
BULK CARGO – LOWER VOLUME OFFSET BY ARPU GROWTH • Bulk revenue increased $1.4m (7.5%) to $20.6m HoH • Volume decreased by 0.16 million tonnes (-9.3%) to 1.55 million tonnes HoH • Bulk cargo average revenue per tonne increased 18.5% to $13.30/T from $11.23/T HoH • Primarily cargo mix and average rate
Slide 11: Log Volume Lower but Steady Given Operating Conditions
LOG VOLUME LOWER BUT STEADY GIVEN OPERATING CONDITIONS • Log export volume decreased 0.17 million tonnes (-13.1%) to 1.1 million tonnes HoH • Cyclone impacted second quarter • Log export market conditions generally subdued • Post cyclone Gabrielle: • Flow of logs to port steady • Pan Pac exporting h
Slide 12: Continued Cost Control Focus
CONTINUED COST CONTROL FOCUS • Total opex increased $6.1m to $40.4m HoH, • Comparable in quantum to 2H 2022 • Strong cost inflation continuing across all categories • Additional cost control measures introduced post-cyclone focused on: • Discretionary spend, R&M, non-critical capex • Redeployments,
Slide 13: Improved Operating Result Driven by Yield and Return of Cruise
IMPROVED OPERATING RESULT DRIVEN BY IMPROVED YIELD AND RETURN OF CRUISE • Result from operating activities up $5.5m (33%) • Majority of increase attributed to cruise • ARPU growth matching operating expense growth RESULT FROM OPERATING ACTIVITES Millions 1- Fuel plus contract labour 13
Slide 14: Net Profit Maintained Post Te Whiti Wharf Completion
NET PROFIT MAINTAINED POST TE WHITI WHARF COMPLETION • Underlying NPAT¹ increased by $0.3m (3.9%) to $7.5m • As flagged, increased depreciation (+$1.7m) and finance costs (+$3.3m) post Te Whiti construction period DISTRIBUTION OF RESULT FROM OPERATING ACTIVITES $25.0 $20.0 $6.3 $8.1 $15.0 $4.2 $6.4
Slide 15: Capital Expenditure – Reduced Spend Post Te Whiti Wharf
CAPITAL EXPENDITURE – REDUCED SPEND POST TE WHITI WHARF • Capital expenditure of $6.9m1 • $3.9m mobile plant – four Eco container handling machines, log loader • $1.6m post cyclone restorative dredging • Deferral of non critical capex as impact of cyclone assessed • No significant existing capital c
Slide 16: Cash Flow & Liquidity
CASH FLOW & LIQUIDITY HY2023 HY2022 Var $M $M $M Operating cash flows 21.4 13.0 +8.4 Investing cash flows (5.8) (43.7) +37.9 Dividends (9.4) (9.4) - Other financing cash flows (4.1) (0.1) -4.0 Increase in cash and cash equivalents 2.1 1.8 Increase in total gross drawn loans and borrowings - (42.0) •
Slide 17: Capital Management
CAPITAL MANAGEMENT • Debt to EBITDA of 2.96x at 31 March • Down from 3.36x at 30 September 2022 • Within long-term target range of 2.0x - 3.0x • Weighted average term to debt maturity of 4.2 years • 82% of gross drawn debt subject to fixed interest rates at 31 March 2023 FIXED INTEREST RATE PROFILE
Slide 18: Current Outlook
CURRENT OUTLOOK FUNDAMENTALS REMAIN STRONG; NEW CHALLENGES IN SHORT TERM Resilient port infrastructure and lifeline asset Te Whiti wharf delivering results and enabling new services Key stakeholders and cargo customers committed to reinstatement post cyclone Damage to the region creates opportunitie
Slide 19: HY2023 Interim Dividend
HY2023 INTERIM DIVIDEND Interim dividend of 1.7 cps declared Fully imputed Record date: 9 June 2023 Payment date: 22 June 2023 19
Slide 20: Questions
QUESTIONS
Slide 21: Appendices
APPENDICES The following appended financial information provides a summary of financial information for the half year period ended 31 March 2023 (HY2023) compared to the corresponding half year period in 2022 (HY2022). Reconciliations provided are extracted from and should be read in conjunction wit
Slide 22: Revenue
REVENUE NZ$000 HY2023 HY2022 Container services 34,540 30,157 Bulk cargo 20,602 19,169 Cruise 5,108 12 Sundry revenue 692 149 Revenue from port operations 60,942 49,487 Revenue from property operations 1,313 1,225 Total operating income 62,255 50,712 22
Slide 23: Operating Expenses
OPERATING EXPENSES Employee benefit expenses NZ$000 HY2023 HY2022 Wages & salaries 20,860 17,481 Other employee benefit expenses 1,325 1,387 Total employee benefit expenses 22,185 18,868 Property and plant expenses NZ$000 HY2023 HY2022 Plant expenses 3,227 3,100 Site expenses 833 814 Fuel & power 3,
Slide 24: Operating Expenses
OPERATING EXPENSES Other operating expenses NZ$000 HY2023 HY2022 Administration expenses 3,686 2,680 Occupancy expenses 4,270 3,262 Contract labour 1,826 2,012 Other staff expenses 842 949 Total other operating expenses 10,624 8,903 24
Slide 25: Capital Expenditure
CAPITAL EXPENDITURE NZ$000 HY2023 HY2022 Development capex 6 Wharf construction - 27,728 Other development capex 714 2,868 Total development capex 714 30,596 Replacement capex 5,864 3,774 Compliance and other capex 344 271 Total capex including capitalised finance costs 6,923 34,641 Movement in fixe
Slide 26: Reconciliation of Underlying Net Profit After Tax
RECONCILIATION OF UNDERLYING NET PROFIT AFTER TAX¹ NZ$000 HY2023 HY2022 Reported net profit after tax 8,690 8,984 Adjustments: Fair value movements on investment properties (1,225) (1,800) Underlying net profit after tax 7,465 7,184 1- Underlying net profit after tax is a non-NZ GAAP measure – refer
Slide 27: 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 which will be capitalised during construct
Slide 28: Our Strategy Builds on a Strong Business
OUR STRATEGY BUILDS ON A STRONG BUSINESS A LONG TERM ASSET ESSENTIAL TO THE HEALTH OF THE HAWKE’S BAY ECONOMY AN INFRASTRUCTURE ASSET ESSENTIAL TO THE HEALTH OF THE HAWKE’S BAY ECONOMY Napier Port is an essential regional infrastructure asset and, by connecting Hawke’s Bay and central New Zealand to
Slide 29: 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