Napier Port profit hits record in 2017 and eyes more capacity
Napier Port lifted net profit to a record this year as the Kaikoura earthquake meant it benefited from atypically high cargo volumes, and it wants to expand so it can handle larger tourism and trade ships.
Net profit jumped 46 percent to $16.7 million in the year ended Sept. 30 on a 19 percent increase in revenue to $86.7 million, its annual report shows. The port paid a $10.7 million dividend to the Hawke's Bay Regional Investment Company, up from $7.9 million in 2016, and invested $18.7 million in capital projects and equipment in the year.
The November 2016 earthquake meant cargo which would normally go to Wellington's CentrePort arrived in Napier instead, meaning the port handled a record 288,444 twenty-foot equivalent units (TEU) in the year. Some 54 cruise ships also arrived at the port during the year, which the port said is estimated to have injected around $20 million into the local economy.
Napier Port is seeking resource consent for a $125 million, 350-metre long wharf constructed along the existing sea wall. Chief executive officer Garth Cowie, who is leaving at the end of this year having held the role since 1999, said the port is investing now to ensure it is well-placed to handle the central New Zealand cargo base into the future.
"The most crucial element in our future strategy is the development of a wharf capable of handling the next generation of larger vessels," Cowie said. "With cruise lines building ever-larger ships and container lines cascading bigger vessels into New Zealand trades, we are already seeing an increase in the size of vessels calling at Napier Port. As central New Zealand grows, it is vital that Napier Port has the capability to handle the increasing frequency of large vessel calls."
Napier Port's debt rose to $83.3 million as at Sept. 30, from $79.2 million a year earlier. During the year, the port operator amended its bank facilities with Westpac New Zealand to $65 million, which expires on Dec. 31, 2019, and entered into a new $42.5 million agreement with ASB Bank which expires by Oct. 31, 2018.
The port said New Zealand's apple industry is poised for major growth, with exports on par with records set in 2016 and a significant planting programme across the region. A direct service from New Zealand to Europe during peak export season, targeted at apple and meat exporters, began in the year.