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.

Equity Bottom-Up

<ul><li>Napier Port's (POT) 1H24 trade volumes were mixed but in aggregate should contribute to a strong sequential profit bounce following a weak 2H23 which was materially impacted by Cyclone Gabrielle.</li><li>First half container volumes fell -17% against the prior year, but this shortfall should be more than made up for by a strong lift in bulk cargo tonnage (+22%) and an additional 26 cruise vessel calls.</li><li>Log exports were particularly strong, helped by central North Island windthrown related harvesting and additional unprocessed log volume from the Pan Pac closure. </li></ul>

Napier Port's (POT) 1H24 trade volumes were mixed but in aggregate should contribute to a strong sequential profit bounce following a weak 2H23 which was materially impacted by Cyclone Gabrielle.First half container volumes fell -17% against the prior year, but this shortfall should be more than made up for by a strong lift in bulk cargo tonnage (+22%) and an additional 26 cruise vessel calls.Log exports were particularly strong, helped by central North Island windthrown related harvesting and additional unprocessed log volume from the Pan Pac closure. 

Thematic (Sector/Industry)

<ul><li>Mega trends have been dictating transport sector performance over the last few years.</li><li>The pandemic saw international travel halt overnight, congested supply chains, and ripples sent across the broader freight sector.</li><li>Just as these trends began to normalise, global economic conditions started to deteriorate, leading to supply chain destocking, and weaker passenger and freight end demand. </li></ul>

Mega trends have been dictating transport sector performance over the last few years.The pandemic saw international travel halt overnight, congested supply chains, and ripples sent across the broader freight sector.Just as these trends began to normalise, global economic conditions started to deteriorate, leading to supply chain destocking, and weaker passenger and freight end demand. 

<ul><li>For the first time in three years we are moving our WACC assumptions down.</li><li>This is driven by a modestly lower (-25 bps) interpolated 10-year interest rate assumption; our proxy for the risk free rate.</li><li>We also incorporate our C&amp;ESG ratings into our WACC assumptions. We do this on an overall neutral basis, with a scale of -25 bps to +25 bps added to the cost of equity. </li></ul>

For the first time in three years we are moving our WACC assumptions down.This is driven by a modestly lower (-25 bps) interpolated 10-year interest rate assumption; our proxy for the risk free rate.We also incorporate our C&amp;ESG ratings into our WACC assumptions. We do this on an overall neutral basis, with a scale of -25 bps to +25 bps added to the cost of equity. 

Equity Strategy - WACC Review; a Lower Rfr and Adding C&ESG

<ul><li>A deteriorating economic backdrop is impacting demand for freight and passengers.</li><li>Imports into New Zealand have slumped over 2023 as supply chain destocking has compounded slowing domestic consumption.</li><li>The latter has softened demand across different transport modes. </li></ul>

A deteriorating economic backdrop is impacting demand for freight and passengers.Imports into New Zealand have slumped over 2023 as supply chain destocking has compounded slowing domestic consumption.The latter has softened demand across different transport modes. 

Transport Trends - Where's the Freight, Mate?

<ul><li>Napier Port (NPH) reported a Cyclone Gabrielle impacted FY23 result, but is optimistic of a strong recovery in volumes and profitability over the next few years.</li><li>Importantly, management appears confident that its medium-term profit target (for a +50% increase on FY20 EBITDA within five years) is still achievable.</li><li>Our earnings forecasts are consistent with this, but reliant on a full recovery in log exports and containers to ~95% of the FY21 peak. </li></ul>

Napier Port (NPH) reported a Cyclone Gabrielle impacted FY23 result, but is optimistic of a strong recovery in volumes and profitability over the next few years.Importantly, management appears confident that its medium-term profit target (for a +50% increase on FY20 EBITDA within five years) is still achievable.Our earnings forecasts are consistent with this, but reliant on a full recovery in log exports and containers to ~95% of the FY21 peak. 

Napier Port - FY23—Berth of Gabrielle Recovery

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)

Napier Port - First Half Whiplash

Log exports were particularly strong, helped by central North Island windthrown related harvesting and additional unprocessed log volume from the...

Forsyth Barr

Transport Trends - A Second Wave

Mega trends have been dictating transport sector performance over the last few years. The pandemic saw international travel halt overnight,...

Forsyth Barr

Equity Strategy - WACC Review; a Lower Rfr and Adding C&ESG

For the first time in three years we are moving our WACC assumptions down. This is driven by a modestly lower (-25 bps) interpolated 10-year...

Forsyth Barr

Transport Trends - Where's the Freight, Mate?

Imports into New Zealand have slumped over 2023 as supply chain destocking has compounded slowing domestic consumption. The latter has softened...

Forsyth Barr

Napier Port - FY23—Berth of Gabrielle Recovery

Napier Port (NPH) reported a Cyclone Gabrielle impacted FY23 result, but is optimistic of a strong recovery in volumes and profitability over the...

Forsyth Barr

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