New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Thematic (Sector/Industry)

<ul><li>Domestic transport, be it freight or passenger, is currently feeling pretty sorry for itself.</li><li>The depressed economic backdrop at home and stalled recovery of inbound air travel is weighing on the sector’s psyche and financial performance.</li><li>At this stage of the cycle, we tender to look for anything vaguely resembling a green shoot. </li></ul>

Domestic transport, be it freight or passenger, is currently feeling pretty sorry for itself.The depressed economic backdrop at home and stalled recovery of inbound air travel is weighing on the sector’s psyche and financial performance.At this stage of the cycle, we tender to look for anything vaguely resembling a green shoot. 

Transport Trends - Green Shoots Yet to Germinate

Equity Bottom-Up

<ul><li>One of Napier Port's (NPH) largest customers is shutting down permanently, which will result in a headwind to FY25 earnings growth.</li><li>Winstone Pulp International (WPI) announced a temporary closure of its timber mills last month, and following employee consultation, a final decision to close permanently has been made.</li><li>NPH has suggested that WPI currently contributes EBITDA of around ~NZ$4m, largely reflecting pulp and timber exports that are containerised at its Port Pack facility. </li></ul>

One of Napier Port's (NPH) largest customers is shutting down permanently, which will result in a headwind to FY25 earnings growth.Winstone Pulp International (WPI) announced a temporary closure of its timber mills last month, and following employee consultation, a final decision to close permanently has been made.NPH has suggested that WPI currently contributes EBITDA of around ~NZ$4m, largely reflecting pulp and timber exports that are containerised at its Port Pack facility. 

<div><div><div><div><ul><li>Napier Port's (NPH) third quarter result highlights: (1) further recovery from Cyclone Gabrielle, as volume improvements generate meaningful operating leverage, and (2) an immaterial impact from the current (temporary) high electricity price, driving plant closures among key customers.</li><li>Consequently, management has retained its full year earnings guidance (EBITDA range of NZ$50m–N$53m), which should lead to further strong growth in FY25.</li><li>NPH appears cheap against peers and against its own trading history. Its one year forward PE discount to larger sector peer, Port of Tauranga (POT), is the widest (&gt;40%) it's been since NPH listed in 2019. </li></ul></div></div></div></div>

Napier Port's (NPH) third quarter result highlights: (1) further recovery from Cyclone Gabrielle, as volume improvements generate meaningful operating leverage, and (2) an immaterial impact from the current (temporary) high electricity price, driving plant closures among key customers.Consequently, management has retained its full year earnings guidance (EBITDA range of NZ$50m–N$53m), which should lead to further strong growth in FY25.NPH appears cheap against peers and against its own trading history. Its one year forward PE discount to larger sector peer, Port of Tauranga (POT), is the widest (&gt;40%) it's been since NPH listed in 2019. 

Napier Port - 3Q24 Result — Voyage of Recovery

<div id="m_7505193840733105993iubdj-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2"><ul><li>The volume backdrop across the wider transport sector is generally challenged by a weak demand environment, though pockets of positive activity are evident.</li><li>The latter most notably on global air and sea freight lanes, where activity is up against a destocking impacted prior year.</li><li>In contrast, the pricing environment is generally favourable for freight, but headwinds persist for passenger transport. </li></ul></div>

The volume backdrop across the wider transport sector is generally challenged by a weak demand environment, though pockets of positive activity are evident.The latter most notably on global air and sea freight lanes, where activity is up against a destocking impacted prior year.In contrast, the pricing environment is generally favourable for freight, but headwinds persist for passenger transport. 

<ul><li>We upgrade Napier Port (NPH) to OUTPERFORM from NEUTRAL following a strong 1H24 result, which again highlighted its effective pricing power.</li><li>A +25% increase in EBITDA (against the prior year) was largely driven by unit revenue gains in its container and cruise operations. ​​​​​​​</li><li>We expect the company to continue to use pricing as a strategic lever to grow earnings and lift returns. In the near term this will be supported by a full Cyclone Gabrielle volume recovery. </li></ul>

We upgrade Napier Port (NPH) to OUTPERFORM from NEUTRAL following a strong 1H24 result, which again highlighted its effective pricing power.A +25% increase in EBITDA (against the prior year) was largely driven by unit revenue gains in its container and cruise operations. ​​​​​​​We expect the company to continue to use pricing as a strategic lever to grow earnings and lift returns. In the near term this will be supported by a full Cyclone Gabrielle volume recovery. 

Napier Port - 1H24 — Wharf a Bit More Than We Port

New Zealand

Napier Port Holdings Limited provides shipping services. The Company offers transportation for cargo and passenger. Napier Port Holdings serves customers in New Zealand.

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Napier Port (NPH NZ)

Transport Trends - Green Shoots Yet to Germinate

The depressed economic backdrop at home and stalled recovery of inbound air travel is weighing on the sector’s psyche and financial performance.

Forsyth Barr

Napier Port - WPI Closure Hurts

One of Napier Port's (NPH) largest customers is shutting down permanently, which will result in a headwind to FY25 earnings growth.

Forsyth Barr

Napier Port - 3Q24 Result — Voyage of Recovery

Consequently, management has retained its full year earnings guidance (EBITDA range of NZ$50m–N$53m), which should lead to further strong growth in...

Forsyth Barr

Transport Trends - Freight Expectations

The volume backdrop across the wider transport sector is generally challenged by a weak demand environment, though pockets of positive activity are...

Forsyth Barr

Napier Port - 1H24 — Wharf a Bit More Than We Port

We upgrade Napier Port (NPH) to OUTPERFORM from NEUTRAL following a strong 1H24 result, which again highlighted its effective pricing power.

Forsyth Barr

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