Log exports had a slow start to the year however, the sector recovered to return to forecasted volumes ahead of a market slowdown in June, the recovery contributing to Port Nelson’s resilient 2023 financial year results. Despite challenging trading conditions the Port achieved a $4 million dividend for the community.
Underlying Net Profit after Tax result (NPAT) (excluding one-offs and property valuations) was $7.7 million, down $0.1m on the budget provided in the Statement of Corporate Intent and down $0.2 million on last year. Cargo volumes reached 3.2 million tonnes, 2% below budget and 2.5% ahead of last year.
Hugh Morrison, Port Nelson’s Chief Executive, says he is pleased the Port has provided the forecasted dividend of $4 million amidst tightening export markets and supply chain challenges.
“Port Nelson’s purpose is to facilitate regional prosperity, providing a $4 million dividend to our shareholders, Nelson City Council and Tasman District Council, is an important contribution to that regional prosperity.”
“We have faced challenges this year that have impacted our end of year results. A record volume of apple and wine exports helped offset what have been difficult trading conditions for imports and exports of sawn timber, fish and general cargo.”
Like most businesses, the Port faced strong cost pressures during the year, particularly fuel, interest, payroll and insurance costs. One-off factors impacting the business were a slight uplift in investment property values, a write-off of feasibility costs related to the intended Science and Technology Precinct and, most significantly, recognition of beneficial interest rate swaps, triggered by the establishment of Infrastructure Holdings. Together these one-offs contributed to an overall NPAT result of $9.3 million.
The Port’s carbon emissions continue to be below the average of the last four years. Emissions in the year were similar to last year, and overall, down 18.8% on 2019FY emissions. “This year the Port set a goal to further reduce its scope 1 and 2 carbon emissions from 42% to an ambitious 67% on 2019 emissions, by 2035. These targets are framed within the parameters of the Paris Agreement and in line with the targets set by the Climate Leaders Coalition, of which the port is a member,” says Mr Morrison.
The Port has again had an active year supporting its community. He says that the Port’s sponsorship programme is very important: “We feel privileged to engage with many amazing people who lead initiatives that positively impact Te Tauihu. Some of the organisations we have supported this year include the Cawthron Seagrass Project to help restore biodiversity in the Nelson haven, Moananui which supports the blue economy, LifeLinc the beneficiary of the Port Nelson Golf Day, and the Port Nelson Export Hub, providing support and guidance to local importers and exporters.”
In addition to sponsorship donations, the Port offers in-kind contributions including donations of port services, equipment and personnel.
During the year, the Port also developed an iwi and Māori Partnership Plan and is implementing the plan over the next three to five years.
The Port initiated a long-term strategic plan for the period out to 2030, and commenced an Infrastructure Master Plan, looking ahead 30 years. Consultation with stakeholders for the Master Plan has shown that the Port has forecasted the potential need to accommodate at least a 50% annual increase in cargo over 30 years; driven by growth in timber, apples, kiwifruit, wine and seafood. In the 2024 financial year, further engagement will be sought with internal and external stakeholders, including iwi before the plan’s finalisation.
Looking to the future, the Port anticipates ongoing trading challenges for exporters over much of the 2024 financial year but expects improvements in container shipping schedule reliability.
