whilst I am a fan of infrastructure investments Ports of Napier has a major flaw in it's business model. IMO way to much of NPH revenue relies on logs and given forestry is notorious for bust and booms and 80% of our exports logs go to one destination (China). Currently most forestry block needs to receive about $95 a ton average price across all grades to break even.......just recently the average log price has dropped from $140 to $107. For a decent IRR on investment, 7% compounding before tax a forest grower needs about a $130 average across all grades. I can tell you from a forestry growers point of view we only get to harvest once every 25 years and one of the few things forestry investment has going for it is we can delay harvest, stop harvesting or suspend harvest if the price on offer is SH#@.........watch and see what happens to NPH bottom line should there be a prolonged down turn in forestry
Quote from: snapiti on Jun 25, 2022, 01:10 PMwhilst I am a fan of infrastructure investments Ports of Napier has a major floor in it's business model. IMO way to much of NPH revenue relies on logs
So, have wooden floor ?
that's all I need another english teacher in my life
The English teacher may have missed NPH has essentially quite wider dependence on Primary products
overall - all prone to whims of Mother Nature & the seasons.
there aways was & is question of how well utilised and at what point that is reached with the costly
wharf extensions - ultimately the reason for listing due to HBRC position on stumping up added
expansion capital inject into NPH.
The float completed, expansion all but complete - the question remains whether & for how long NPH
remains a sleepy satellite of the overall HBRC empire with the further 50% new stakeholders clinging
on for the ride in more choppy global trading times :)
almost down to near the $2.60 IPO pricing - my fancy is for other port companies
the more I think about it the more vulnerable NPH appears........63% of all the wharfs outgoing tonnage is logs, much of there expansion has been spent on og tonnage increasing..... hope for investors sake logs prices do not remain suppressed for a long period...... unforetunately history indicates this happens often
I recall going through the prospectus and being surprised with the reliance on log exports. It provides a base earnings and there are plenty of trees to harvest up the coast which provides stability. But such a large base of earnings also represents a risk and is subject to factors outside of the control of NPH. I can't see NPH growing at an extraordinary rate and I think the income from the much touted cruise ships will be relatively miniscule. I don't currently hold NPH but may be interested at a lower price.
The SP seems to have ticked up a bit in past week or two - perhaps visible sight of incoming Tour Ships ?
Quote from: snapiti on Jun 25, 2022, 03:09 PMthe more I think about it the more vulnerable NPH appears........63% of all the wharfs outgoing tonnage is logs, much of there expansion has been spent on og tonnage increasing..... hope for investors sake logs prices do not remain suppressed for a long period...... unforetunately history indicates this happens often
Anecdotally only (as in I have to share the road with them) but the number of trucks has increased markedly over the last couple of months. The amount of planting going in is massive also - not that that'll impact Napier Port for a couple of decades.
Quote from: Ferg on Jun 25, 2022, 08:54 PMI can't see NPH growing at an extraordinary rate and I think the income from the much touted cruise ships will be relatively miniscule.
Nicely called. Today's annoucement (https://www.nzx.com/announcements/405276) shows no growth at all. Contnainer ship calls to port down 53 to 47 YoY. And this tucked away at the very end, "Assuming no further booking cancellations, Napier Port now has actual calls plus remining bookings totalling 81 cruise vessels for this cruise season, down from the 87 bookings reported earlier." English teachers are also encouraged to spot the spelling error.
Forbar negative on NPH. (https://www.stuff.co.nz/business/131834678/markets-wrap-cyclone-gabrielles-devastating-impact-lingers) Their expectation is for a drop in profits of 41% to $12.4 million, log exports down 17%, container exports by 9%, and for cruise ship visits by 20%. An "Underperform" rating is retained on the stock and they have pulled back on their one-year price target to $2.50 from $2.60.
Pip-fruit and forestry represent about three quarters of NPH's cargo revenue. I'm picking that the log export drop will be greater and for longer. You'd want outstanding odds on seeing logging trucks accessing the Pacific Coast route this year...and that's the key for the port's tree trade. There are already other options (even prior to the cyclones) being pursued, for example the barge at Te Araroa, which bypass the need for Napier.
The cruise ship income for the port is supposed to be where the growth is - that's why they increased debt to for the new wharf. Hard to know how Forbar attained a 20% drop figure? However, previous results suggested that NPH's cruise income expectations were inflated.
$2.50 does not look a fair price...let alone a good price for entry to me.
$2.50 price target 1 year hence suggests current price should be $2.20-$2.30.
Forbars forecast represents eps of 6.2 cps. At $2.50 that's a forward PE of 40 times what is hopefully, trough year earnings.
I'm sure we'd all like to think the region would get back on its feet quickly and volumes recover such that NPH can return to something like 10 cps in earnings (PE 25) but (and I acknowledge you'd know a lot more than me Hectorplains living amongst the devastation in the region) I would think the effects will be felt for many years. Wouldn't you agree ?
I agree 100%, NPH doesn't make a great investment case at this point in time. I note its the main other contender apart from HLG for inclusion in the NZX50 when PPH is removed, the outcome of which company goes in is still uncertain, but pricing action in the last month tends to suggest HLG might be the slight favorite.
Possible inclusion in the NZX50 is the only thing I can see that could move the needle north for NPH but it not enough for me to engage with given all the negatives and the current metrics.
Quote from: Basil on Apr 22, 2023, 10:47 AM$2.50 price target 1 year hence suggests current price should be $2.20-$2.30.
Forbars forecast represents eps of 6.2 cps. At $2.50 that's a forward PE of 40 times what is hopefully, trough year earnings.
I'm sure we'd all like to think the region would get back on its feet quickly and volumes recover such that NPH can return to something like 10 cps in earnings (PE 25) but (and I acknowledge you'd know a lot more than me Hectorplains living amongst the devastation in the region) I would think the effects will be felt for many years. Wouldn't you agree ?
I agree 100%, NPH doesn't make a great investment case at this point in time. I note its the main other contender apart from HLG for inclusion in the NZX50 when PPH is removed, the outcome of which company goes in is still uncertain, but pricing action in the last month tends to suggest HLG might be the slight favorite.
Possible inclusion in the NZX50 is the only thing I can see that could move the needle north for NPH but it not enough for me to engage with given all the negatives and the current metrics.
The speed they are getting the main arterials open has been outstanding. Highway 35 from Gisborne heading north reopened a couple of weeks ago. There is talk of Gisborne to Napier being open in less than a month. That is a phenomenal effort given the scale of the damage. However; 'open' for what? Patch repairs won't handle the tonnage of timber trucks. That'll require much greater remediation and in some places even re-routing. The hit to NPH is likely to be over at least a couple of years.
Half year is due in about a month. Their debt level will be interesting - they flicked off a $75m bond issue back in Sept, stating that it was to repay a portion of their existing debt. Hopefully they have it all under control... and no Synlait like surprises.
Good they're making excellent progress to get the main arterial roads open. At least that's a start in the long journey of the region's recovery. Really hope cyclones like that are not a regular thing going forward with climate change but I have a bad feeling devastating weather events are going to occur more frequently in the future.
don't follow the ann's from this infrastruture dog, have they updated the markets that the Napier Pan Pac mill remains out of action due the the cyclone damage in Feb, this is a major user of the port.
Also log prices have dropped so much many harvest crews are on the sidelines and the ones that are working are doing so with meaningful volume output reductions.
Have they updated the market with how fruit exports are going given the Hawkesbay crops where meaningfully effected by the storms this year, we are several months into the fruit export season so they would surely have some guidance
Snapiti
3rd quarter activities down heaps ...about 30% v pcp
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NPH/414513/398258.pdf
Quote from: winner (n) on Jul 10, 2023, 12:30 PMSnapiti
3rd quarter activities down heaps ...about 30% v pcp
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NPH/414513/398258.pdf
yep....no surprise....this port relies highly on forestry which is notorious for boom and bust cycles.
Given pan pac is still closed and the log price is still low(lots of harvest crews on the side lines) the next 1/4 V PCP will be fairly aweful as well. SP not reacted to the numbers but I still see plenty of downside pressure as it trades at very high multiples given the risks
all time low hit this week....no surprise
Good on them for keeping the market informed. This 9 month trading update was released mid August:
https://www.nzx.com/announcements/416401
Terrible quarter given the cyclone impact plus the economic downturn.
They expected the rail line to Hastings to open mid September - I don't know if it is fully open but I saw a single tender testing the line south of Awatoto earlier this week and a truck using the line closer to Napier today. And whilst PanPac are shifting logs, I don't think their Whirinaki site has reopened yet.
https://www.panpac.co.nz/news/
Still hard to see growth. Preserving cash will be key. NZX50 inclusion may be a pipe dream and IPO investors are under water which IMO will put a cap on any price appreciation.
EDIT: Napier Hastings line to reopen on Friday (https://www.nzherald.co.nz/hawkes-bay-today/news/trains-set-to-return-to-napier-for-first-trip-after-cyclone/I7KLGY5PC5CYLE3WTKJBTQNYSM/). And the Napier Gisborne line is not being closed, it is being 'mothballed (https://www.nzherald.co.nz/nz/gisborne-to-napier-rail-line-under-threat/2T4YYXHKZLXI5L66II4KMLG7VI/)'.
Quote from: Ferg on Sep 13, 2023, 10:06 PMGood on them for keeping the market informed. This 9 month trading update was released mid August:
https://www.nzx.com/announcements/416401
Terrible quarter given the cyclone impact plus the economic downturn.
They expected the rail line to Hastings to open mid September - I don't know if it is fully open but I saw a single tender testing the line south of Awatoto earlier this week and a truck using the line closer to Napier today. And whilst PanPac are shifting logs, I don't think their Whirinaki site has reopened yet.
https://www.panpac.co.nz/news/
Still hard to see growth. Preserving cash will be key. NZX50 inclusion may be a pipe dream and IPO investors are under water which IMO will put a cap on any price appreciation.
EDIT: Napier Hastings line to reopen on Friday (https://www.nzherald.co.nz/hawkes-bay-today/news/trains-set-to-return-to-napier-for-first-trip-after-cyclone/I7KLGY5PC5CYLE3WTKJBTQNYSM/). And the Napier Gisborne line is not being closed, it is being 'mothballed (https://www.nzherald.co.nz/nz/gisborne-to-napier-rail-line-under-threat/2T4YYXHKZLXI5L66II4KMLG7VI/)'.
I think they're being unduly optimistic. The forestry situation is down played by NPH. This headline (https://www.rnz.co.nz/news/business/494915/east-coast-forestry-industry-on-the-ropes-as-demand-drops-bad-weather-goes-on) captures where the industry is really at.
Full year volumes do not look good relative to last year. Source: https://www.nzx.com/announcements/419815
Lower volumes are to be expected given Cyclone Gabrielle, but could we see a loss for H2? And the dividend suspended?
Quote from: Ferg on Oct 19, 2023, 10:48 PMLower volumes are to be expected given Cyclone Gabrielle, but could we see a loss for H2? And the dividend suspended?
NPH Shareholders breathe a collective sign of relief: loss avoided and dividend not suspended.
Results announcement: https://www.nzx.com/announcements/421575
Sales for the last 4 half years (1H22, 2H22, 1H23, 2H23): $51m, $64m, $62m, $56m!
EBITDA last 4 half years: $16.4m, $23.7m, $21.9m, $15.3m!
NPAT last 4 half years: $9.0m, $11.4m, $8.7m, $7.9m*
*Note: NPAT for 2H23 includes Cyclone Gabrielle insurance claim of $7.25m pre-tax ($5.22m post tax). So the trading NPAT for 2H23 was $2.7m. Phew!
Note that FY22 included capitalised interest of $5.6m pre-tax ($4m post tax) which did not re-occur in FY23. Plus FY23 had higher depreciation charges for the new wharf which also explains some of the fall in NPAT YoY.
Operating costs have stabilised, operating cashflow is positive and growing, FCF is also positive.
I'm not seeing an investment case (yet) but I am still watching. NPH need log volumes to return but even if they return, this continues to be a risk given it is such a large proportion of their volumes (55% of total tonnage in FY23).
Consensus (1 analyst) of a $3.05 target https://www.marketscreener.com/quote/stock/NAPIER-PORT-HOLDINGS-LIMI-103506280/consensus/
Quote from: SuperMario on Jun 01, 2024, 10:26 PMConsensus (1 analyst) of a $3.05 target https://www.marketscreener.com/quote/stock/NAPIER-PORT-HOLDINGS-LIMI-103506280/consensus/
A consensus of one? That sounds like my wife...
Quote from: Ferg on Nov 18, 2023, 11:25 PMI'm not seeing an investment case (yet) but I am still watching. NPH need log volumes to return but even if they return, this continues to be a risk given it is such a large proportion of their volumes (55% of total tonnage in FY23).
Log prices have got worse in the last six months since this post. There was a big drop in April that, against expectations, continued into May. Prices are at $106/JAS level for A-grade logs. Exchange rates with China and shipping costs have been unfavorable too making an unholy trinity for log volumes. There are no signs of significant turnaround for Chinese log demand.
I wonder what calculations the analyst is running for a 20% climb in share price?
I had a look at that this morning. They are predicting $24m NPAT which based on the company's recent half year result and forward guidance looks quite unlikely to me. I think ~ $20m is where its more likely to be. That analyst is forecasting much stronger growth in FY25 and FY26, based on what exactly I am not sure, but as you suggest, there are obvious near term headwinds.
https://www.marketscreener.com/quote/stock/NAPIER-PORT-HOLDINGS-LIMI-103506280/
QuoteA consensus of one? That sounds like my wife...
Is she always right ;) Mine thinks she is but very often isn't lol
Even with possible NZX50 inclusion I am struggling with this one.
P.S. I also think sometimes the liquidity exclusion process is a bit opaquer than some analysts think it is and therefore NPH is far from certain to be included in the NZX50 at this June review based on SAN's liquidity issue.
Further, if WHS makes an exit at the Sept or December review which is starting to look quite likely, currently position 53 based on a 6 month price average of $1.48, (spot price only $1.05), it could be by that time TWR's free float market cap based on 6 month price average, (currently just behind NPH but based on a 6 month price average of only 68 cents, v current spot price $0.83) will exceed NPH's. It looks to me more likely TWR would get the nod next time rather than NPH
Conclusion. If NPH doesn't get added to the NZX50 this month as a result of SAN's illiquidity, then people buying based on index exclusion might have to wait a very long time before index inclusion finally occurs. Plenty of risk with the NPH's FY24 forecast and possible index inclusion and Hectorplains has posted good info on log prices to think about too. I really did try quite hard this morning to like this but...if you have to try that hard it's probably a good indicator to choose something else.
Impressive result...... well done holders (and the NPH team)
https://www.nzx.com/announcements/462894
HIGHLIGHTS
• Revenue rises 11.6% to $157.7 million, led by strong container services volume growth and yield improvements across all trade areas
• Result from operating activities increases 23.5% to $64.2 million, benefiting from ongoing cost control, yield management and strong operating leverage
• Underlying net profit after tax of $28.3 million, up 36.5% from $20.7 million in the prior year
• Reported net profit after tax of $30.9 million, up 24.4% on the prior year's $24.8 million
• Directors declare a fully imputed final dividend of 8 cents per share, taking total dividends for the 2025 financial year to 14.5 cents per share, up from 9 cents for the prior year, and representing a gross dividend yield of 5.9%
• Earnings guidance for FY2026 for an underlying result from operating activities of between $70 million and $74 million