Q3 2026 Napier Port Holdings Ltd Earnings Call

August 11, 2026

Speaker #2: Thank you for standing by, and welcome to the Napier Port Holdings Limited Q3 2026 nine-month results announcement. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session.

Operator 2: Thank you for standing by, and welcome to the Napier Port Holdings Limited 2026 nine-month results announcement. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Kristen Lie, Napier Port Chief Financial Officer. Please go ahead.

Operator: Thank you for standing by, and welcome to the Napier Port Holdings Limited 2026 nine-month results announcement. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Kristen Lie, Napier Port Chief Financial Officer. Please go ahead.

Speaker #2: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Kristen Lee, Napier Port Chief Financial Officer.

Speaker #2: Please go ahead.

Speaker #3: Marina, thank you all for joining us this morning. I'm Kristen Lee, CFO at Napier Port, and I'm joined on the call this morning by Todd Dawson, Chief Executive.

Kristen Lie: Mōrena, and thank you all for joining us this morning. I am Kristen Lie, CFO at Napier Port, and I am joined on the call this morning by Todd Dawson, Chief Executive. Earlier this morning, we released our unaudited interim Q3 and nine months year-to-date results. In terms of the format for this call, we will provide a high-level overview of the results, and then we will open up the line for any relevant questions. Let us get straight into it. I will now hand over to Todd to get things underway.

Speaker #3: Earlier this morning, we released our unaudited interim third-quarter and nine-month year-to-date results. In terms of the format for this call, we will provide a high-level overview of the results, and then we'll open up the line for any relevant questions.

Speaker #3: Let's get straight into it, and I'm going to hand over to Todd to get things underway.

Speaker #4: Thanks, Kristen, and good morning, everyone. Thank you for joining us today. I'm pleased to report that Napier Port has continued to deliver strong financial performance through the third quarter.

Todd Dawson: Thanks, Kristen, and good morning, everyone, and thank you for joining us today. I am pleased to report that Napier Port has continued to deliver strong financial performance through the Q3. Nine months revenue of NZD 134 million, up 11.1% on the same period last year. Our result from operating activities increased 16.6% to NZD 59.3 million, while underlying net profit after tax increased 27.8% to NZD 29.6 million. This represents another strong result and reflects our continued focus on growth, yield management, productivity, and operational performance. There are three key factors behind today's result. First, we have continued to see positive trends across our container cargo portfolio. Refrigerated exports, including apples and meat, have performed well following favorable growing and harvest conditions, while dry cargo categories have also contributed positively.

Speaker #4: Nine-month revenue of $134 million was up 11.1% on the same period last year. Our result from operating activities increased 16.6% to $59.3 million, while underlying net profit after tax increased 27.8% to $29.6 million.

Speaker #4: This represents another strong result and reflects our continued focus on growth, yield management, productivity, and operational performance. There are three key factors behind today's result.

Todd Dawson: This represents another strong result and reflects our continued focus on growth, yield management, productivity, and operational performance. There are three key factors behind today's result. First, we have continued to see positive trends across our container cargo portfolio. Refrigerated exports, including apples and meat, have performed well following favorable growing and harvest conditions, while dry cargo categories have also contributed positively.

Speaker #4: First, we have continued to see positive trends across our container cargo portfolio. Refrigerated exports, including apples and meat, have performed well following favorable growing and harvest conditions, while dry cargo categories have also contributed positively.

Speaker #4: Although overall container volume growth in the year has moderated following the strong growth experienced during 2025, container activity has continued to consolidate and grow.

Todd Dawson: Although overall container volume growth in the year has moderated following the strong growth experienced during 2025, container activity has continued to consolidate and grow. Second, our long-term strategy of investing in infrastructure, services, and improved operating capability continues to deliver value alongside our active yield management strategies. We have continued to improve revenue per unit and improved our returns across both our container and bulk businesses through enhancing the services we provide to customers and improving our revenue yields whilst delivering ongoing service and capability improvements for customers. Third, we continue to maintain a disciplined approach to cost management. While operating expenses have increased over the period, revenue growth has continued to outpace increases in costs, allowing us to deliver another period of positive margin growth and operating returns. Across our strategic investment program, we have made good progress also.

Speaker #4: Second, our long-term strategy of investing in infrastructure, services, and improved operating capability continues to deliver value alongside our active yield management strategies. We have continued to improve revenue per unit and improved our returns across both our container and bulk businesses through enhancing the services we provide to customers and improving our revenue yields, whilst delivering ongoing services and capability improvements for customers.

Todd Dawson: We have continued to improve revenue per unit and improved our returns across both our container and bulk businesses through enhancing the services we provide to customers and improving our revenue yields whilst delivering ongoing service and capability improvements for customers. Third, we continue to maintain a disciplined approach to cost management. While operating expenses have increased over the period, revenue growth has continued to outpace increases in costs, allowing us to deliver another period of positive margin growth and operating returns.

Speaker #4: Third, we continue to maintain a disciplined approach to cost management. While operating expenses have increased over the period, revenue growth has continued to outpace increases in costs, allowing us to deliver another period of positive margin growth in operating returns.

Speaker #4: Across our strategic investment program, we've made good progress also. Our new jointly owned dredge vessel was successfully launched into the water at the end of July, and is receiving its final fit-out prior to its delivery to New Zealand, which remains on schedule for later this calendar year.

Todd Dawson: Across our strategic investment program, we have made good progress also. A new jointly owned dredge vessel was successfully launched into the water at the end of July and is receiving its final fit-out prior to its delivery to New Zealand, which remains on schedule for later this calendar year. New ShoreTension mooring units are now installed and operational, while our container terminal transformation program has entered an exciting new phase with autonomous truck trials underway ahead of broader operational deployment over the next six months.

Todd Dawson: A new jointly owned dredge vessel was successfully launched into the water at the end of July and is receiving its final fit-out prior to its delivery to New Zealand, which remains on schedule for later this calendar year. New ShoreTension mooring units are now installed and operational, while our container terminal transformation program has entered an exciting new phase with autonomous truck trials underway ahead of broader operational deployment over the next six months. These investments are enhancing Napier Port's capability, providing increased capacity, resilience, and further operating efficiencies while positioning us to support future growth. I will now hand over to Chris Penn to provide more detail on the financial results.

Speaker #4: New shore tension mooring units are now installed and operational, while our container terminal transformation program has entered an exciting new phase, with autonomous truck trials underway ahead of broader operational deployment over the next six months.

Speaker #4: These investments are enhancing Napier Port's capability, providing increased capacity, resilience, and further operating efficiencies, while positioning us to support future growth. I'll now hand over to Kristen to provide more detail on the financial results.

Todd Dawson: These investments are enhancing Napier Port's capability, providing increased capacity, resilience, and further operating efficiencies while positioning us to support future growth. I will now hand over to Chris Penn to provide more detail on the financial results.

Speaker #3: Thank you, Todd. With our third quarter trade volume released in July, we reported container volumes for the quarter 2.5% lower than the strong comparative period of the prior year.

Kristen Lie: Thank you, Todd. With our Q3 trade volume release in July, we reported container volumes for the quarter 2.5% lower than the strong comparative period the prior year. The decrease in container volumes for the quarter reflected a higher proportion of empty container repositioning activity occurring earlier in this financial year. For the nine-month period, container volumes increased 1% to 196,000 TEU. Within this total increase, empty container movements have been relatively flat, and we have seen a 17% reduction in transshipments in DLRs and a 5% total increase in higher-yielding, fully laden containers, both dry and reefers, most notably across apples, meat, fertilizer, timber, and paper products. Despite lower total volumes, Q3 container services revenue increased 21.9% to NZD 35.8 million. For the nine months, container services revenue increased 18.8% to NZD 85.7 million.

Speaker #3: The decrease in container volumes for the quarter reflected a higher proportion of empty container repositioning activity occurring earlier in this financial year. For the nine-month period, container volumes increased 1% to 196,000 TEU.

Speaker #3: Within this total increase, empty container movements have been relatively flat, and we've seen a 17% reduction in transshipments and DLRs, and a 5% total increase in higher-yielding, fully laden containers.

Kristen Lie: Within this total increase, empty container movements have been relatively flat, and we have seen a 17% reduction in transshipments in DLRs and a 5% total increase in higher-yielding, fully laden containers, both dry and reefers, most notably across apples, meat, fertilizer, timber, and paper products. Despite lower total volumes, Q3 container services revenue increased 21.9% to NZD 35.8 million. For the nine months, container services revenue increased 18.8% to NZD 85.7 million.

Speaker #3: Both dry and reefers, most notably across apples, meat, fertilizer, timber, and paper products. Despite lower total volumes, third-quarter container services revenue increased 21.9% to $35.8 million.

Speaker #3: For the nine months, container services revenue increased 18.8% to $85.7 million. Average revenue per TEU increased 17.7% to $439 for the nine months, driven by improvements in container and cargo mix.

Kristen Lie: Average revenue per TEU increased 17.7% to NZD 439 for the nine months and was driven by a container and cargo mix improvements, tariff and levy increases, together with a higher contribution from depot activities. Bulk cargo volumes were 4.6% lower in the Q3 and 2.5% lower for the nine months compared to the same periods last year. Log export volumes remained lower than the previous year as exporters continued to face challenging global market conditions. Log exports for the nine months were down 5.2% to 1.92 million tonnes. This was partially offset by stronger fertilizer imports and exports. Bulk cargo revenue for the quarter was marginally reduced at NZD 12.2 million. For the nine months, bulk cargo revenue increased 3.8% to NZD 39.2 million. Average revenue per tonne increased 6.4% to NZD 16.14, reflecting customer and cargo mix changes together with tariff and levy increases.

Speaker #3: Tariff and levy increases, together with a higher contribution from depot activities. Bulk cargo volumes were 4.6% lower in the third quarter and 2.5% lower for the nine months, compared to the same periods last year.

Speaker #3: Log export volumes remained lower than the previous year, as exporters continued to face challenging global market conditions. Log exports for the nine months were down 5.2% to 1.92 million tonnes.

Kristen Lie: Log exports for the nine months were down 5.2% to 1.92 million tonnes. This was partially offset by stronger fertilizer imports and exports. Bulk cargo revenue for the quarter was marginally reduced at NZD 12.2 million. For the nine months, bulk cargo revenue increased 3.8% to NZD 39.2 million. Average revenue per tonne increased 6.4% to NZD 16.14, reflecting customer and cargo mix changes together with tariff and levy increases.

Speaker #3: This was partially offset by stronger fertilizer imports and exports. Bulk cargo revenue for the quarter was marginally reduced at $12.2 million, and for the nine months, bulk cargo revenue increased 3.8% to $39.2 million.

Speaker #3: Average revenue per ton increased 6.4% to $16.14, reflecting customer and cargo mix changes together with tariff and levy. There were 55 vessel calls and more than 88,000 passengers, contributing $6.5 million in revenue compared with $8.3 million in the prior comparative period.

Kristen Lie: The cruise season concluded in April with 55 vessel calls and more than 88,000 passengers, contributing NZD 6.5 million in revenue compared with NZD 8.3 million in the prior comparative period. This reflects fewer cruise vessels across New Zealand. As noted in our market release, there are currently 50 cruise bookings scheduled for the upcoming 2027 season. Despite the current retrenchment in cruise activity being seen across Australia and New Zealand cruise markets, and flat booking numbers, we are seeing a step up in bookings for the 2028-2029 season. In terms of operating results, we have invested in our team to support our operational service delivery, resilience, and the breadth of projects we are undertaking. We are also seeing continued cargo growth within our Viewpoint supply chain service, which is supporting revenue growth and flowing through to contracted services expense.

Speaker #3: This reflects fewer cruise vessels across New Zealand. As noted in our market release, there are currently 50 cruise bookings scheduled for the upcoming 2027 season.

Speaker #3: Despite the current retrenchment in cruise activity being seen across Australia and New Zealand cruise markets, and flat booking numbers, we are seeing a step up in bookings for the 2028–2029 season.

Speaker #3: In terms of operating results, we have invested in our team to support our operational service delivery, resilience, and the breadth of projects we are undertaking.

Kristen Lie: In terms of operating results, we have invested in our team to support our operational service delivery, resilience, and the breadth of projects we are undertaking. We are also seeing continued cargo growth within our Viewpoint supply chain service, which is supporting revenue growth and flowing through to contracted services expense.

Speaker #3: We are also seeing continued cargo growth within our Viewpoint supply chain service, which is supporting revenue growth and flowing through to contractor services expense.

Speaker #3: Despite continuing points of inflationary pressure, revenue growth is translating strongly into operating profit. With the third quarter, total revenue growth of $6.5 million, or 15.3%, saw the result from operating activities increase $4.3 million, or 24.3%, to $22 million.

Kristen Lie: Despite continuing points of inflationary pressure, revenue growth is translating strongly into operating profit. For Q3, total revenue growth of NZD 6.5 million or 15.3% saw the result from operating activities increase NZD 4.3 million or 24.3% to NZD 22 million. For the nine months, total revenue increased by NZD 13.3 million or 11.1%, and the result from operating activities increased NZD 8.4 million or 16.6% to NZD 59.3 million. Reflecting the stronger operating result, underlying net profit after tax increased 38.9% for the quarter to NZD 11.7 million and 27.8% for the nine months to NZD 29.6 million. During the nine months, Napier Port has spent NZD 44.2 million on capital assets, including the new dredge vessel, the container terminal transformation program, ShoreTension mooring technology, mobile plant replacements, major maintenance, and ongoing site management works. We are expecting a further NZD 5 to 10 million of spend in the remainder of the current financial year.

Speaker #3: For the nine months, total revenue increased by $13.3 million, or 11.1%, and the result from operating activities increased by $8.4 million, or 16.6%, to $59.3 million.

Speaker #3: Reflecting the stronger operating result, underlying net profit after tax increased 38.9% for the quarter to $11.7 million, and 27.8% for the nine months to $29.6 million.

Kristen Lie: Reflecting the stronger operating result, underlying net profit after tax increased 38.9% for the quarter to NZD 11.7 million and 27.8% for the nine months to NZD 29.6 million. During the nine months, Napier Port has spent NZD 44.2 million on capital assets, including the new dredge vessel, the container terminal transformation program, ShoreTension mooring technology, mobile plant replacements, major maintenance, and ongoing site management works. We are expecting a further NZD 5 to 10 million of spend in the remainder of the current financial year.

Speaker #3: During the nine months, Napier Port has spent $44.2 million on capital assets, including the new dredge vessel, the container terminal transformation program, Shore Tension mooring technology, mobile plant replacements, major maintenance, and ongoing site management works.

Speaker #3: We're expecting a further $5 to $10 million of spend in the remainder of the current financial year. As always, actual spend is dependent upon approvals and timing.

Kristen Lie: As always, actual spend is dependent upon approvals and timing. Underlying operating cash flow for the nine months grew 8.1% to NZD 48.6 million, and at 30 June 2026, total drawn debt was NZD 136.5 million, up from NZD 107 million at the end of the 2025 financial year. At June, we had NZD 43.5 million of undrawn banking facilities available, and our total debt to EBITDA ratio was 1.88 times, representing significant available servicing capacity to support our strategic investments. As noted at the half year results presentation, we are continuing our due diligence to support an investment decision within the next 12 months on the replacement of our crane fleet. No decisions have been made, and all investment options are on the table to make the decision best suited for Napier Port's future. Replacement cranes will not be delivered within the current CapEx guidance period covering 2025 to 2027 financial years.

Speaker #3: Underlying operating cash flow for the nine months grew 8.1% to $48.6 million. At 30 June 2026, total drawn debt was $136.5 million, up from $107 million at the end of the 2025 financial year.

Speaker #3: As of June, we had $43.5 million of undrawn banking facilities available, and our total debt-to-EBITDA ratio was 1.88 times, representing significant available servicing capacity to support our strategic investments.

Speaker #3: As noted at the half-year results presentation, we are continuing our due diligence to support an investment decision within the next 12 months on the replacement of our crane fleet. No decisions have been made, and all investment options are on the table to make the decision best suited for Napier Port's future.

Kristen Lie: As noted at the half year results presentation, we are continuing our due diligence to support an investment decision within the next 12 months on the replacement of our crane fleet. No decisions have been made, and all investment options are on the table to make the decision best suited for Napier Port's future. Replacement cranes will not be delivered within the current CapEx guidance period covering 2025 to 2027 financial years. I now hand back to Todd.

Speaker #3: Replacement cranes will not be delivered within the current CapEx guidance period, covering the 2025 to 2027 financial years. On that note, I'll hand back to Todd.

Kristen Lie: I now hand back to Todd.

Speaker #1: Thank you, Kristen. We continue to operate in an environment where global economic and geopolitical uncertainty creates challenges for many of our exporters. Despite this, demand for the region's food and fiber exports has remained resilient, and our diversified cargo base continues to provide stability and prospects for future growth.

Todd Dawson: Thank you, Kristen. We continue to operate in an environment where global economic and geopolitical uncertainty create challenges for many of our exporters. Despite this, demand for the region's food and fiber exports has remained resilient, and our diversified cargo base continues to provide stability and prospects for future growth. With the consolidation of higher container activity in the current year, we have also seen increasing interest in growth in vessel calls by container shipping lines. This saw the additional seasonal calls by Maersk with their Southern Star service and an additional MSC service through to Northeast USA and Europe being added into Q3, which were welcomed by cargo shippers. Unfortunately, MSC has now advised that its USA and Europe direct Eagle service will cease calling at Napier Port late in August this year.

Speaker #1: With the consolidation of higher container activity in the current year, we have also seen increasing interest and growth in vessel calls by container shipping lines.

Speaker #1: This saw the additional seasonal calls by Maersk with their Southern Star service, and an additional MSC service through to Northeast USA and Europe, being added into the third quarter, which will be welcomed by cargo shippers.

Todd Dawson: This saw the additional seasonal calls by Maersk with their Southern Star service and an additional MSC service through to Northeast USA and Europe being added into Q3, which were welcomed by cargo shippers. Unfortunately, MSC has now advised that its USA and Europe direct Eagle service will cease calling at Napier Port late in August this year.

Speaker #1: Unfortunately, MSC is now advised that its USA and Europe direct Eagle service will cease calling at Napier Port late in August this year. While this demonstrates the dynamic nature of global container shipping, shipping lines and new services are attracted to our cargo, and we continue to work closely with shipping lines on the evolution of services calling Napier.

Todd Dawson: Whilst this demonstrates the dynamic nature of global container shipping lines and new services are attracted to our cargo, and we continue to work closely with shipping lines on the evolution of services calling Napier. We remain confident in our investment strategy of improving our capacity, capabilities, and operational efficiencies to enhance Napier Port's long-term service offering. Our strategic investment program is progressing to plan, with major milestones already achieved across the program. As these investments come into operation, they will further improve the efficiency of our operations and strengthen the service we provide to our customers. We are reaffirmed today that our underlying result from operating activities for the year ending 30 September 2026 will be around the top end of our previously communicated guidance range of between NZD 70 million and NZD 74 million, assuming a continuation of the current operating conditions.

Speaker #1: We remain confident in our investment strategy of improving our capacity, capabilities, and operational efficiencies to enhance Napier Port's long-term service offering. Our strategic investment program is progressing to plan, with major milestones already achieved across the program.

Speaker #1: As these investments come into operation, they will further improve the efficiency of our operations and strengthen the service we provide to our customers. We are reaffirming today that our underlying result from operating activities for the year ending 30 September 2026 will be around the top end of our previously communicated guidance range of between $70 million and $74 million.

Todd Dawson: As these investments come into operation, they will further improve the efficiency of our operations and strengthen the service we provide to our customers. We are reaffirmed today that our underlying result from operating activities for the year ending 30 September 2026 will be around the top end of our previously communicated guidance range of between NZD 70 million and NZD 74 million, assuming a continuation of the current operating conditions.

Speaker #1: Assuming a continuation of the current operating conditions, overall, we're pleased with the progress we've made during the first nine months of the financial year and look forward to updating shareholders again at the full-year results in November.

Todd Dawson: Overall, we are pleased with the progress we have made during this first nine months of the financial year and look forward to updating shareholders again at the full-year result in November. I will now hand back to Kristen.

Speaker #1: I'll now hand back to Kristen.

Speaker #3: Thank you. That concludes our prepared remarks. We would like to provide the opportunity for those on the call to ask questions related to our presentation, and therefore hand back over to the moderator to do so.

Kristen Lie: Thank you. That concludes our prepared remarks. We would like to provide the opportunity for those on the call to ask questions related to our presentation and therefore hand back over to the moderator to do so.

Speaker #2: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two.

Operator 2: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Andy Bowley with Forsyth Barr. Please go ahead.

Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Andy Bowley with Forsyth Barr. Please go ahead.

Speaker #2: If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Andy Bowley with Forsyth Barr. Please go ahead.

Speaker #4: Thanks, moderator. Good morning, guys. A few questions from me, and congrats on another strong performance in terms of the further uplift in profit. First one: around pricing and unit revenue growth.

Andy Bowley: Thanks, moderator. Good morning, guys. A few questions from me, and congrats on another strong performance in terms of the further uplift in profit. First one around pricing and unit revenue growth. Pretty impressive unit revenue growth if we just take out that Q3 in isolation. Very strong relative to the prior year, and I recognize your yield enhancement measures, which you referred to in the prepared remarks, are clearly bearing fruit. I am just more interested in the broader backdrop when we think about where pricing is now, and where you see it can get to, particularly in light of this time of the year where your tariff schedule is going to be updated soon, and you will be communicating with your customers over the coming weeks, I suspect, in terms of the pricing backdrop for next year.

Speaker #4: Pretty impressive unit revenue growth if we just take out that third quarter in isolation. So, very strong relative to the prior year, and I recognize your yield enhancement measures, which you referred to in the prepared remarks.

Speaker #4: It's clearly bearing fruit. I'm just kind of more interested in the broader backdrop when we think about where pricing is now and where you see it could get to, particularly in light of this time of year, when your tariff schedule is going to be updated soon and you'll be communicating with your customers over the coming weeks, I suspect, in terms of the pricing backdrop for next year.

Andy Bowley: I am just more interested in the broader backdrop when we think about where pricing is now, and where you see it can get to, particularly in light of this time of the year where your tariff schedule is going to be updated soon, and you will be communicating with your customers over the coming weeks, I suspect, in terms of the pricing backdrop for next year.

Speaker #4: Is there anything to suggest that we can't continue on with the kind of price increases or unit revenue increases that we've been generating in recent years? It's been a multi-year and pretty impressive backdrop in terms of the broader pricing environment when we think about FY27 and FY28.

Andy Bowley: Is there anything to suggest that we cannot continue on with the kind of price increases or unit revenue increases that we have been generating in recent years, which has been a multi-year and pretty impressive backdrop in terms of the broader pricing backdrop when we think about FY27 and FY28, particularly in light of the fact that return on capital is still what I would suspect is still below your expectations around WACC? Sorry, long-winded question.

Speaker #4: Particularly in light of the fact that return on capital is still, I suspect, below your expectations around work. Sorry, that was a long-winded question.

Speaker #3: Good morning, Andy. Todd here. Yeah, I guess what we've said in the past around, I guess, expectations moderating from levels previously seen around price increases.

Todd Dawson: Mōrena, Andy. Todd here. Yeah, I guess what we have said in the past around, I guess, expectations moderating from levels previously seen around price increases, I think we still believe that to be the case, noting that other competitors around the port industry have been quite aggressive with their recent pricing. We are probably thinking about more of a slow and steady approach from here. But we will obviously still take into context what other industry partners or participants are doing as well. The backdrop around price in terms of what the major customers, like shipping lines and things, are willing to tolerate at the moment has been a little bit fluctuating, given that they have been going from relatively boom times post-COVID to more austere times. But equally, some of the recent results that they are putting out are pretty impressive as well.

Speaker #3: I think we still believe that to be the case, noting that other competitors around the port industry have been quite aggressive with their recent pricing.

Speaker #3: We've probably been thinking about more of a slow and steady approach from here. But we will obviously still take into context what other ministry partners or participants are doing as well.

Todd Dawson: The backdrop around price in terms of what the major customers, like shipping lines and things, are willing to tolerate at the moment has been a little bit fluctuating, given that they have been going from relatively boom times post-COVID to more austere times. But equally, some of the recent results that they are putting out are pretty impressive as well.

Speaker #3: The backdrop around price, in terms of what the major customers like shipping lines and things are willing to tolerate at the moment, is being a little bit fluctuating, given that they have been going from relatively boom times post-COVID to more steady times. But equally, some of the recent results that they are putting out are pretty impressive as well.

Speaker #3: So we're going to have to take all that into context and also think about where we want to land in regard to trying to achieve that ROIC target that we've set out to achieve five to ten years post-64.

Todd Dawson: We are going to have to take all that into context and also think about where we want to land in regards to trying to achieve that ROIC target that we have set out to achieve 5 to 10 years post 6 Wharf. Your long-winded question has been responded with a long-winded answer. I guess we would not be disclosing what we are going to be doing around our tariffs just yet, but we are taking all those factors into consideration. Underlying sort of expectation would be less aggressive than what we have seen perhaps in the past.

Speaker #3: So your long-winded question has resulted in a long-winded answer. I guess we wouldn't be disclosing what we're going to be doing around our tariffs just yet, but we are taking all those factors into consideration.

Speaker #3: But the underlying sort of expectation would be less aggressive than what we've seen, perhaps, in the past.

Speaker #4: I think—that's a message that, and I appreciate that answer, Todd. It's a message you've probably been giving us for 12 to 18 months, but this year has been extremely strong again.

Andy Bowley: I guess that is a message that, and appreciate that answer, Todd, it is a message you have been probably being giving us for 12, 18 months, but this year has been extremely strong again. I guess there are reasons for that, and some of that will reflect some of your investment. But the message I am getting is that it will not be as strong as this year, next year or the year after, and probably on an ongoing basis. Is that fair?

Speaker #4: And I guess there are reasons for that, and some of those will reflect some of your investment. But the message I'm getting is that it won't be as strong next year or the year after as it is this year.

Speaker #4: And I’m probably on an ongoing basis. Is that fair?

Speaker #3: Yeah, I think so. I think this year we've obviously benefited as well from what I refer to as yield, which is that mix of cargo as much as it is around price.

Todd Dawson: Yeah, I think so. I think this year we have obviously benefited as well from what I have referred to as yield, which is that mix of cargo as much as it is around price. That has been quite beneficial for us in terms of the uplift we are seeing in particular things like meat and apples and things going through the port too.

Speaker #3: So, that has been quite beneficial for us in terms of the uplift we've seen, and particularly things like meat and apples and things going through the port too.

Speaker #3: Yeah, and also, the mix of the exporters on the bulk side. Obviously, there’s a mix of different commercials with those, and that can contribute towards the yield on the bulk if we have a more favorable customer pushing more volume through the port too.

Andy Bowley: Yeah.

Todd Dawson: Yeah. And also

Andy Bowley: Okay

Todd Dawson: the mix of the exporters on the bulk side. Obviously there's a mix of different commercials with those, and that can contribute towards the yield on the bulk if we have a more favorable customer pushing more volume through Napier Port too.

Speaker #4: Yeah, okay. No, that's fair. So, next question—just around the log market. You referred to some challenging conditions in the broader global backdrop around logs.

Andy Bowley: Yeah. Okay. No, that's fair. Next question, just around the log market. You referred to some challenging conditions in the broader global backdrop around logs. What are you hearing from key export partners around current harvesting activity, in terms of crews out in the forests, number of days, et cetera, and how that may look over the next 3 to 15 months?

Speaker #4: What are you hearing from key export partners around current harvesting activity in terms of cruise out in the forests, number of days, etc.? And how might that look over the next three to fifteen months?

Speaker #3: It's probably a bit hard to say at 15 months, but in the last few months, we've seen—and I think we've talked about—the fact that the log exporters have been under pressure mainly due to fuel pricing and the cost of harvesting forests that are further afield.

Todd Dawson: It's probably a bit hard to say at 15 months, but in the last few months, we've seen, and I think we've talked about, the fact that the log exporters have been under pressure mainly due to fuel pricing, and the cost of harvesting forests that are further afield. So they've moved crews back towards forests that are close to Napier Port to offset that fuel price pressure. I think that's been reflected in the lower volumes coming through Napier Port as well, that we've talked about. But equally, in the last month or so, as fuel prices have come back down a little bit and demand's been pretty stable in China in terms of offtake and things, we actually are seeing a bit of an uptick again.

Speaker #3: So they've moved cruise back towards forests that are closer to ports, due to price pressure. We have seen, I think, that's been reflected in the lower volumes coming through the port as well.

Speaker #3: That we've talked about, but equally, in the last month or so, as fuel prices have come back down a little bit, demand's been pretty stable in China.

Todd Dawson: But equally, in the last month or so, as fuel prices have come back down a little bit and demand's been pretty stable in China in terms of offtake and things, we actually are seeing a bit of an uptick again. As well as, I think that's also influenced a bit by weather as well in terms of what they can actually harvest out of the forests, where it's dry versus wet. So we have seen a bit of an increase again, and we would expect the next few months to be relatively stable, sort of 3 months out. Crystal ball gazing, really, to say what would we expect in 15 months time or further afield.

Speaker #3: In terms of offtake and things, we're actually seeing a bit of an uptick again, as well, and I think that's also influenced a bit by weather in terms of what they can actually harvest out of the forests—whether it's dry versus wet.

Todd Dawson: As well as, I think that's also influenced a bit by weather as well in terms of what they can actually harvest out of the forests, where it's dry versus wet. So we have seen a bit of an increase again, and we would expect the next few months to be relatively stable, sort of 3 months out. Crystal ball gazing, really, to say what would we expect in 15 months time or further afield.

Speaker #3: So, we have seen a bit of an increase again, and we would expect the next few months to be relatively stable—sort of three months out.

Speaker #3: Crystal ball-gazing, really, to say what we expect in 15 months' time or further afield.

Speaker #4: Yeah, no, that's fair enough. Last one from me, just on the cost side of things. So, contract services is a relatively small line in the P&L, but I'm just keen to get a sense of what's going in there, what's driving the increase, and how that will look over the coming quarters, stroke next financial year.

Andy Bowley: Yeah. No, that is fair enough. Last one from me, just on the cost side of things. Contract services is a relatively small line in the P&L. Just keen to get a sense of what is going in there, what is driving the increase, and how that will look over the coming quarters/next financial year.

Speaker #3: Yeah. Hi, Andy. Kristen here. Yeah, probably the two main drivers there—and you've noted it—it's basically up to $2.4 million, nine months on nine months.

Kristen Lie: Yeah. Hi, Andy. Kristen here. Yeah, probably the two main drivers there, and you have noted it is basically up to NZD 2.4 million, nine months on nine months. Two main drivers there are our Viewpoint service. Basically it is contracting for transportation, so both rail and road. So that is a significant driver. The volumes going through Viewpoint have been growing very strongly, and that is obviously supporting revenue growth, and being reflected in that expense line. The other key driver of late has been around our stevedoring charges. I think we have talked about this in the past. It is basically a labor business. That is one point of inflation, I guess, certainly the supply chain for us. That has been relatively significant this year and probably has been significant for the last few years actually. So that is sort of running through, I think.

Speaker #3: Two main drivers there are our Viewpoint service—basically, it's contracting or transportation, so both rail and road. So that's a significant driver. The volumes going through Viewpoint have been growing very strongly.

Speaker #3: And that's obviously supporting revenue growth and being reflected in that expense line. The other key driver of late has been around our debit ordering charges. I think we've talked about this in the past, but it's basically a labor business.

Kristen Lie: The other key driver of late has been around our stevedoring charges. I think we have talked about this in the past. It is basically a labor business. That is one point of inflation, I guess, certainly the supply chain for us. That has been relatively significant this year and probably has been significant for the last few years actually. So that is sort of running through, I think. Yeah, so we will continue to sort of see some pressure in that area, I suspect. Yeah, that kind of covers the main drivers.

Speaker #3: And that's one point of inflation, I guess, sort of in the sort of certainly the supply chain for us. And that's been relatively significant this year and probably has been significant for the last few years actually.

Speaker #3: So that's sort of running through. I think, yeah, so we'll continue to see some pressure in that area, I suspect. Yeah, that kind of covers the main drivers.

Kristen Lie: Yeah, so we will continue to sort of see some pressure in that area, I suspect. Yeah, that kind of covers the main drivers.

Speaker #4: So I guess the incremental growth in that cost line continues through the fourth quarter, and then is annualized for FY27. In light of where the run rate is, is that a fair assumption?

Andy Bowley: I guess the incremental growth in that cost line continues through the Q4 and into an annualized FY27, in light of where the run rate is. Is that a fair assumption?

Speaker #3: Yeah, I think that's fair. I guess probably the other thing I should note is that we've, I guess, changed the model a little bit, without getting into too much detail.

Kristen Lie: Yeah, I think that's fair. I guess probably the other thing I should note is that we've just changed the model a little bit, without getting into too much detail. I think we're positioning ourselves for a kind of a future growth scenario where we will kind of take away some of that strong correlation for the future. But I guess that's a little hard to see from what you're seeing. But yeah, otherwise-

Speaker #3: So we've I think we're positioning ourselves for a kind of a future growth scenario where we will kind of take away some of that strong correlation for the future.

Speaker #3: But I guess that's a little bit hard to see from what you're saying, but yeah, otherwise, yeah, that's fair.

Andy Bowley: Sorry, what do you-- Sorry, Kristen, what do you mean by that?

Speaker #4: So, what are you—sorry, Kristen—what do you mean by that?

Speaker #3: So in some of the changes we've made in that space, I guess, to address the sort of inflation we're seeing there, is to position our, I guess, our economics, if you like, around the future.

Kristen Lie: In some of the changes we've made in that space, I guess, to address the sort of the deflation we're seeing there is to position our economics, if you like, around the future. So future growth scenarios. Whilst we're seeing growth in the expense line now, we're positioning ourselves to get some benefits a bit further down the line. But that's obviously a bit harder for you to see.

Speaker #3: So, future growth scenarios. While we're seeing growth in the expense line now, we're positioning ourselves to get some benefits, but further down the line, that's obviously a bit harder for you to see.

Speaker #4: Yeah, okay. Fair enough. Thanks, guys. Appreciate it.

Andy Bowley: Yep. Okay, fair enough. Thanks, guys. Appreciate it.

Speaker #1: Your next question comes from Wade Gardner with Craigs Investment Partners. Please go ahead.

Operator 2: Your next question comes from Wade Gardiner with Craigs Investment Partners. Please go ahead.

Operator: Your next question comes from Wade Gardiner with Craigs Investment Partners. Please go ahead.

Speaker #4: Hi, just one question from me. I know it's a long way out, but you mentioned a tick up in expectations for cruise ship visits for '28, '29.

Wade Gardiner: Hi, just one question from me. I know it is a long way out, but you mentioned a tick-up in expectations for cruise ship visits for 2028, 2029. What are you seeing there, and how much of a tick-up are you expecting?

Speaker #4: What are you seeing there, and how much of a tick up are you expecting?

Speaker #3: It's in the 60s, the bookings, and it's changing almost week to week—quite fluid, Wade—but we are seeing a noticeable increase in that 2028, 2029 seasonal timeframe.

Kristen Lie: It is in the 60s, the bookings, and it is changing almost week to week. Quite fluid, Wade, but we are seeing a noticeable increase in that 2028, 2029 seasonal timeframe with more or less confirmed bookings for then. We expect it to change quite a bit between now and then, obviously. But it is on the up, yeah.

Speaker #3: With more or less confirmed bookings for then, we expect it to change quite a bit between now and then, obviously. But it is on an upward trend.

Speaker #4: Yeah. Okay. Thank you.

Wade Gardiner: Okay. Thank you.

Speaker #1: Once again, if you wish to ask a question, please press star one on your telephone. We'll pause for a short moment to allow any final questions to register.

Operator 2: Once again, if you wish to ask a question, please press star one on your telephone. We will pause a short moment to allow any final questions to register. There are no further phone questions at this time. I will now hand back to Kristen Lie for closing remarks.

Operator: Once again, if you wish to ask a question, please press star one on your telephone. We will pause a short moment to allow any final questions to register. There are no further phone questions at this time. I will now hand back to Kristen Lie for closing remarks.

Speaker #1: There are no further phone questions at this time. I'll now hand back to Kristen Lee for closing remarks.

Speaker #2: Great. Thank you, everyone, for joining us for the Napier Port Holdings Q3 2026 nine-month results call and for your questions. That ends our presentation. I wish you all a good day, and goodbye.

Kristen Lie: Great. Thank you everyone for joining us for the Napier Port Holdings 2026 nine-month results call and for your questions. That ends our presentation. I wish you all a good day, and goodbye.

Operator 2: That does conclude our conference for today. Thank you for participating. You may now disconnect.

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.

Browse all earnings call transcripts

Q3 2026 Napier Port Holdings Ltd Earnings Call

Request TrialDemo

Napier Port

Earnings