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>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?

Equity Bottom-Up

<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

<ul><li>Napier Port (NPH) reported third quarter profitability significantly down on the prior year given depressed cargo volumes following Cyclone Gabrielle, further exacerbated by adverse weather events during the quarter.</li><li>3Q23 underlying EBITDA fell -44% to NZ$7.5m, while underlying NPAT fell -73%.</li><li>Volatility in earnings remains a key feature of the company, reflective of its concentrated cargo base and high fixed costs (providing [de]operating leverage). </li></ul>

Napier Port (NPH) reported third quarter profitability significantly down on the prior year given depressed cargo volumes following Cyclone Gabrielle, further exacerbated by adverse weather events during the quarter.3Q23 underlying EBITDA fell -44% to NZ$7.5m, while underlying NPAT fell -73%.Volatility in earnings remains a key feature of the company, reflective of its concentrated cargo base and high fixed costs (providing [de]operating leverage). 

Napier Port - Cyclone Aftermath Dampens Profits

<ul><li>Napier Port (NPH) has reinstated earnings guidance for FY23 having previously withdrawn it following Cyclone Gabrielle.</li><li>Its new EBITDA guidance range of NZ$34.5m-NZ$36.5m compares to our current forecast of NZ$36.5m and the previously withdrawn guidance range of NZ$42m-NZ$48m.</li><li>In addition NPH expects to report 9M23 EBITDA of NZ$29.1m, down from NZ$29.8m for 9M22, implying a near halving of EBITDA in 3Q23 (NZ$7.2m vs NZ$13.3m) against the prior year.  </li></ul>

Napier Port (NPH) has reinstated earnings guidance for FY23 having previously withdrawn it following Cyclone Gabrielle.Its new EBITDA guidance range of NZ$34.5m-NZ$36.5m compares to our current forecast of NZ$36.5m and the previously withdrawn guidance range of NZ$42m-NZ$48m.In addition NPH expects to report 9M23 EBITDA of NZ$29.1m, down from NZ$29.8m for 9M22, implying a near halving of EBITDA in 3Q23 (NZ$7.2m vs NZ$13.3m) against the prior year.  

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)

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

Napier Port - Cyclone Aftermath Dampens Profits

Napier Port (NPH) reported third quarter profitability significantly down on the prior year given depressed cargo volumes following Cyclone...

Forsyth Barr

Napier Port: Reinstates Guidance

Napier Port (NPH) has reinstated FY23 earnings guidance but with a lowered EBITDA range and reduced 9M23 EBITDA, attributed to the impact of...

Forsyth Barr

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