Half Year 2024 Napier Port Holdings Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andy Bowley - Forsyth Barr - Analyst : Thanks, operator. Good morning, guys. A few questions from me. The first is around guidance. And maybe -- forget about this year's guidance for a minute and think back to the Investor Day and the 50% increase for FY25. I assume -- there hasn't been a lot of commentary on that since the Investor Day. But I assume that's very much now in track and in your minds with regards to meeting that longer-term objective and still very achievable.

Question: Andy Bowley - Forsyth Barr - Analyst : Good stuff. And then maybe with regards to FY24 guidance, it implies a reasonably meaningful sequential decline in profitability during the second half versus the first half. You've talked to reduced log volumes and various other issues. I guess, what I'm trying to get to here is how conservative you're being here. I recognize things can come out of left field as they have done in recent years. But is there anything else we need to be thinking about with regards to that guidance that you haven't talked to on page 20? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 21, 2024 / 11:00PM, NPH.NZ - Half Year 2024 Napier Port Holdings Ltd Earnings Call

Question: Andy Bowley - Forsyth Barr - Analyst : So you're anticipating better container throughput through the second half. Is that fair? Where do you typically (multiple speakers) reefer. So the log fallback or decline must be reasonably material in terms of what you're anticipating.

Question: Andy Bowley - Forsyth Barr - Analyst : And just maybe, Todd, on log volumes, yeah, how much of the first-half log volumes were windthrown and unprocessed Pan Pac logs? Have you got a sense for that?

Question: Andy Bowley - Forsyth Barr - Analyst : Okay. So the decline in the second half, if your underlying log export volumes are reasonably stable, which you've alluded to, isn't going to be overly material?

Question: Andy Bowley - Forsyth Barr - Analyst : Yeah, okay, cool. Sorry, that was my first question with quite a few sub-questions. So second question around the broader pricing backdrop. So the ARPU gain in the container side of the business was pretty impressive. But I recognize that there were a few mix influences on that ARPU gain. If we strip out those mix influences, I guess, the question here is, what's the underlying unit pricing gain that you're able to achieve with the shipping lines and through tariffs?

Question: Andy Bowley - Forsyth Barr - Analyst : Maybe then, Todd, with regards to those individual shipping line contractual arrangements that you have, were any implemented with changes through the influence this period, i.e., was there some unit price increases that have contributed to that double-digit increase in ARPU for containers during the period?

Question: Andy Bowley - Forsyth Barr - Analyst : And then lastly, is there any reason to believe that ARPU wouldn't be better in the second half than the first half, generally because mix typically is slightly better in the second half?

Question: Andy Bowley - Forsyth Barr - Analyst : Yeah, no, fair enough. Thanks, guys. Appreciate your time and well done with the good result.

Question: Wade Gardiner - Craigs Investment Partners - Analyst : Yeah, hi, guys. Just while we're on pricing, what about sort of some of these ancillary revenues that -- Port of Auckland has used that as a lever to try and increase revenue. Is that something that you guys have done as well?

Question: Wade Gardiner - Craigs Investment Partners - Analyst : So going forward, we would expect more of that, or you're saying that that has been a contributor here or both?

Question: Wade Gardiner - Craigs Investment Partners - Analyst : Just in terms of the Pan Pac, the ramp-up, where are they actually at now? And what's sort of the timing you're expecting for when they'll be back to sort of full capacity, with volumes going into the Port Pack facility?

Question: Wade Gardiner - Craigs Investment Partners - Analyst : Okay. So it's not -- we won't see that full amount in the second half. It's more of a next-year thing.

Question: Wade Gardiner - Craigs Investment Partners - Analyst : You mentioned the drop in cruise revenue for next year. Can you put a sort of scale on that? I mean, how much -- versus price rises compared to average smaller boats, what are we looking at?

Question: Wade Gardiner - Craigs Investment Partners - Analyst : Okay. And you mentioned $20 million for cranes sometime in the future. Is that -- sorry, is that $20 million each or the total of them that you talked about?

Question: Wade Gardiner - Craigs Investment Partners - Analyst : Yeah. Okay. And finally, for me, just insurance proceeds. I assume that is maybe more of it, but you can give us a number on that? Or do you expect that that's the end of it?

Question: Wade Gardiner - Craigs Investment Partners - Analyst : Yeah, yeah.

Question: Wade Gardiner - Craigs Investment Partners - Analyst : Okay. No, it's all right.

Question: Wade Gardiner - Craigs Investment Partners - Analyst : Thanks.

Question: Jonathan Davis - ACC - Analyst : Good morning, Blair, Todd, and Kristen. Really good to see the rebound in profitability post the cyclone. Most of my questions have been asked. But just on the property revenue uplift in the first half, it looks quite good. Should we kind of double that amount to get to an annual number? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 21, 2024 / 11:00PM, NPH.NZ - Half Year 2024 Napier Port Holdings Ltd Earnings Call

Question: Jonathan Davis - ACC - Analyst : And on this risk reserve fund of $25 million, what does that get invested into? And is there an impact on your insurance costs once it's up and running?

Question: Jonathan Davis - ACC - Analyst : Okay. And any comments you can make on shipping schedules and berth windows and how that's going?

Question: Jonathan Davis - ACC - Analyst : And some of those initiatives outside of your immediate trade catchment, winning volumes from the lower North Island, how are they going?

Question: Shane Solly - Harbour Asset Management - Analyst : Hi. Good morning, guys, and well done to the team for delivering a pretty solid result, given the circumstances. I've got a couple of questions, if I might. Firstly, just touching on return on capital targets, can you just remind us what a reasonable return on capital band is for the business?

Question: Shane Solly - Harbour Asset Management - Analyst : No, no, that's great. I just wanted a bit of a range just to -- and so just how you're tracking getting there, just picking up on Todd's comments about getting a reasonable return for the capital employed. So you're making progress to getting back to that WAC-type returns.

Question: Shane Solly - Harbour Asset Management - Analyst : Okay, great. So you can just build on the shipping line question. In terms of calls, are you seeing any variance in terms of the numbers and size of vessels? I appreciate the volatility is still there, but is there any suggestion that -- we have seen blank sailings in other ports. We have seen -- is there any suggestion you -- have you seen any changes in calls in terms of sizes and numbers? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 21, 2024 / 11:00PM, NPH.NZ - Half Year 2024 Napier Port Holdings Ltd Earnings Call

Question: Shane Solly - Harbour Asset Management - Analyst : Great, thank you. Just on horticulture, obviously, a pretty tough period of time for your horticulture producers. Anything you can sort of point to on what you're seeing coming down the line there?

Question: Shane Solly - Harbour Asset Management - Analyst : Good to hear. Just the last one from me, the CapEx investment you've discussed, particularly the crane, the $20 million, does that actually lift capacity? Or does that actually improve -- what's the -- appreciate there's going to be a replacement cycle. But what -- is there any capacity lift, sustainability lift, from making that investment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 21, 2024 / 11:00PM, NPH.NZ - Half Year 2024 Napier Port Holdings Ltd Earnings Call

Question: Shane Solly - Harbour Asset Management - Analyst : Okay. Thank you. Appreciate it, guys.