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 (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.  

<ul><li>Napier Port’s (NPH) third quarter volumes showed further evidence of constrained activity in the aftermath of Cyclone Gabrielle.</li><li>Management also refers to “unexpected weather and swell events during June had restricted shipping and softened volumes further”.</li><li>We currently assume FY23 EBITDA of NZ$36.5m (-9% against the prior year), below market consensus at NZ$38.3m.</li></ul>

Napier Port’s (NPH) third quarter volumes showed further evidence of constrained activity in the aftermath of Cyclone Gabrielle.Management also refers to “unexpected weather and swell events during June had restricted shipping and softened volumes further”.We currently assume FY23 EBITDA of NZ$36.5m (-9% against the prior year), below market consensus at NZ$38.3m.

<ul><li>Price remains management's key lever: Unit revenue gains continue. Average container pricing was up +8% against the prior year, boosted by the introduction of a fuel recovery charge in 2H22, and partly offset by adverse mix.</li><li>Cost inflation remains elevated: Opex inflation remains a key feature at NPH, with an +18% increase in 1H23 against the prior year</li><li>Near-term volume shortfall: Volumes slowed materially as a result of Cyclone Gabrielle through 2Q23</li></ul>

Price remains management's key lever: Unit revenue gains continue. Average container pricing was up +8% against the prior year, boosted by the introduction of a fuel recovery charge in 2H22, and partly offset by adverse mix.Cost inflation remains elevated: Opex inflation remains a key feature at NPH, with an +18% increase in 1H23 against the prior yearNear-term volume shortfall: Volumes slowed materially as a result of Cyclone Gabrielle through 2Q23

Napier Port: 1H23 — Looking Beyond Gabrielle Hangover

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 - 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

Napier Port (NPH): Softer 3Q23 Volumes

Napier Port’s (NPH) third quarter volumes showed further evidence of constrained activity in the aftermath of Cyclone Gabrielle; Management also...

Forsyth Barr

Napier Port: 1H23 — Looking Beyond Gabrielle Hangover

We upgrade Napier Port to NEUTRAL from UNDERPERFORM following its post-Cyclone Gabrielle share price fall and in light of further evidence in its...

Forsyth Barr

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