Cure and welcome to Shared Lunch. Today, we've got a short bonus episode for you where we talked to Todd Dawson, who's the CEO of Nappi Port, about the earnings results out last week. Before we get started, there's some important information.
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Welcome Todd. Nice to have you back at Cheesy's HQ again.
Thank you, nice to be here. I don't thank you very much.
Now, a few days ago you released your interim results Napei Port, and it was a pretty strong result. All in all, your revenue was up by ten point six percent I think, to about seventy eight million, and your net profit was up forty percent to just over twenty million, although that was boosted by the Cyclone Gabriel insurance payout. How would you describe the company's performance over that six months to the sudieth of March.
Yeah, that's a really pleasing result. I think it's sort of underpinned by a strong recovery in the region, certainly led by our container volumes which have come through really nicely. A large part of that is really due to the rebuild of pan Pack, you know, since the cyclone. They've up to full production now so hit their straps around the end of December early January. So pan Pack pan Packs our pulp and timber customer just down the road from the port, big volume customer as well. So yeah,
they've really underpinned a lot of that container recovery. We've also had a really good season in terms of our crews coming through. I think we finished the season with seventy seven crews which runs across that period, and equally some really good steady volumes for our bulk business as well.
So volume lead recovery coming through in those numbers. And I think, you know, the other good thing from our perspective is that the volume and revenue uplift is also not just heed out the back door in terms of costs as well, so we've minised the manager costs really really well. A lot of the work that we put in to correct flexibility in the port is coming through in terms of the operating earnings. You know, we're getting that operating lead what we talk about as operating leverage
coming through. As the volumes come through, the returns get better. So good management of costs pricing is also played a part over the years, but equally just really good management of the business and responding to that recovery.
So you would think that that economic cyde and we've been in a bit of a downturn where we're going up the other side.
Now, would you say, look, I think you know New Zealand seeing a really good, strong, I guess primary sector lead recovery in our view, and that's what we in our region are really all about. It's that regional primary sector, you know, part of a country's that's that's flowing through and that food and fiber demand globally, despite what's going on, you know in macroeconomic markets, people still need the food, they need the fiber, et cetera. And that's what that's
what we export. So it's lying through nicely and we've had a fantastic growing season. You know, we're seeing some effect of the season in terms of the apples and squash and there's vegetables and things I let that go out through NAPY port seeing a bit of that come through in that first half. Result the second half of the years we will see more of that polling come on. And we've had a fantastic summer for growing produce and that's flowing through as well.
Is that a bit earlier for the pit fruit for example, I mean there's climate change? Is that a slightly silver line? Now?
I don't know if you put it down to climate change or just just this year. We've certainly seen ideal you know, all the stars, moons and planets are aligned, and the growers that had outstanding growing conditions. The quality of the fruit that's coming on is excellent. Where they'd sort of typically see pack out rachech just how many actual apples, say, out of ten that you get to go and put in a box, it might be eight or nine. It's definitely up in the nine out of ten.
So we're seeing material up with distance in terms of the quality of the fruit that they can actually expelt is really good this year. So yeah, it's been a great season so far, and hopefully we see that continue into the second half.
New s tariffs and what's been happening there with all those gyrations, does that affect you at all.
Look, it affects US I think from confidence market sentiment since Liberation Day and general Trump came out with what he came out with. You know, our customers aren't seeing any material impact from that right here and now. It's not impacting our volumes going through the port and any by any means, quite a small proportion of our cargo actually ends up in the US. However, it's the I guess the secondary effects that we're looking at more closely.
You know, where our export products go through to countries like China, which you use, for example, our pulp and our timber, which we export a lot of to make other goods that then go on to the States. You know, of consumer sentiment in China comes back a little bit, that may impact those sales of our product that goes up to China. So that's what we were a little in the second half. But in saying that, you know, who knows what Trump's going to come out with tomorrow.
So yeah, it changes day to day, and I think things will settle down, And my feeling is that things will settle down as everyone works out what the world looks like post Trump's bargaining tactics.
Yep, we'd all like to know that. Just thinking about the cruise line, I see that slightly down at eight percent down. I mean, how material is that? Do we need those cruises coming in? I mean their environmental concerns and the like. What snap re port's position on that.
Yeah, Look, cruise is a really good industry for the port, and my view is it's really good for New Zealand. We have seen a drop off and cruise over the whole country this year. Our numbers went impacted quite as bad as some of the other ports around the countryside where they've been seeing from fifteen to thirty percent down. This year, we were slightly down and we ended up the year I think seventy seven I think was the
total number. I think we've go our last cruise vessel through this week, and next year we're saying sixty six, so down again. Unfortunately, the cruise industry, their capacity is imminently movable, and so you know, you can put your vessels wherever you want in the world where you're going to make the best return, and currently they're not making the best returns in the southern hemisphere in New Zealand, so they're putting their vessels up in the Northern Hemisphere.
There are a mixture of international things going on there as to what the cruise lines are doing in terms of decision making, as well as localized issues that they're looking at. And unfortunately New Zealand's getting a reputation with the cruise industry is being not very friendly or welcoming. We're known is no Zealand. So we've got to change that, really do, because it's actually cruise is actually a very
strong and important contributor to New Zealand economy. It's fantastic for our business, it's higher margin work as well, and it's fantastic for the local region in terms of the number of people that come through. So it's a real shame to see that sception in the international cruise industry of New Zealand.
Let's look at that insurance payout, the seven point five million, and that was due to business disruption during cyclone. Gabrielle, that's I think been quite nice for investors. You've actually helped share in those proceeds with them. Can you tell us about that.
Yeah, Look, it's really nice to be able to issue a bit more of a special dividend this time around. And I guess as reflective of the fact that we've had those insurance proceeds come through that the balance sheet is in a really healthy position. But also to reward those shareholders that have been there stuck with us for a while, and we to when we can reward them with a bit more of a one off special dividends.
So you know, we're looking always to be able to see a steady and growing dividends sort of what we say, and working with our dividend policy, and yeah, it's nice to be able to give something back when we can.
And also that's on top of the four cents for the interim in which that's up from three cents.
That's right, Yes, that's that steady and growing and then a one off special as well, because we're in a good position to be able to do that.
Looking ahead, then Todd, I think you've increased your guidance for the full year. I think it was around the range was fifty five million two fifteen fifty nine. Yeah, and this time we're at fifty nine to sixty three. Is that right?
Spot on? You've got a good memory, Yeah, that's right. So we've increased that guidance range up and that's reflective of the first half that we've had, and on I guess our view that we expect things to stay steady and we've obviously got our eye on the horizon as to that those impacts in places like China, which is why we've kept the range still quite wide at four
million dollar range there. So, but you know, all things been equal, when the market conditions are remaining the same, we'd be reasonably confident that we can we can certainly meet that range.
Any headwinds that you think might have other.
Than the one I spoke about with the effects of macroeconomic conditions, trade, things that are uncertain. You know, I think we've got a we're setting up for a pretty good strong second half as well.
What excites you, then, Todd, this is our last question for the next six months.
Then, Look, I'm really excited about some of the projects and things that we've got going on. We've got some fantastic initiatives. We've got this partnership with Port Otago where we're making it we're building a dredge that's going to be a really strategic opportunity for the port to utilize its full consent that we have. So we're already consented
to go deeper at napier ports. We don't have to do any applications for resource consent and things like that, so that'll enable us to do the maintenance stredging that we do anyway, but equally, as we get as we need to, we can chip away and just to make the channels and birth bockets deeper as well. So strategically
long term that's fantastic. It protects the port from being able to maintain its relevance as vessels get bigger, but equally unlocks opportunities for us as well if we want to do more things like transhipment and some of our container volumes. First half, you've seen transhipment volumes coming through, so we think that's an opportunity for us to be able to do more of that type of work, which comes down to have you got the capability, capacity, the depths, etc.
To be able to do that. The other one that's really exciting is our we've got a new project that we're getting the green light to which is around changing the operating model in the port. We're going to do far more. We're going to move our model from big containers being taken to the crane with forklifts. We travel around the port sideways to truck and trailers where the crane will be fed by truck and trailers. But those those truck and trailers will be fully autonomous, nobody driving them,
and equally electric as well. So fantastic new technology that's coming on in the next eighteen months or so, great for emissions and things like that as well. So really exciting new technology that's coming into the port. And we're seeing steady ongoing growth around our viewpoint supply chain service as well, which is sort of the three major kind of strategic initiative that we have underway, which I'm pretty excited about seeing deliver.
Yeah, lots of that's going on there. Yeah, yeah, hey, we look Thanks so much for coming in and giving us that short update. I'm sure investors will be really pleased, especially with the divisions and the outlook and increased guidance.
Thanks Helen, appreciate it.
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