Cargo surge and hard work lifts South Port

GROUP
NOTEGROUP
Statement of Comprehensive Income
OF SOUTH PORT NEW ZEALAND LIMITED FOR THE YEAR ENDED 30 JUNE 2021
Statement of Changes in Equity
OF SOUTH PORT NEW ZEALAND LIMITED FOR THE YEAR ENDED 30 JUNE 2021
Share CapitalRetained EarningsTotal Equity
In Thousands of New Zealand Dollars 2021 2020
Total operating revenues from port services 5 47,291 44,573
Total operating expenses 7 (28,447) (26,688)
Gross profit 18,844 17,885
Administrative expenses (4,174) (4,014)
Operating profit before financing costs 14,670 13,871
Financial income 340 11
Financial expenses (367) (569)
Net financing costs 6 (27) (558)
Other income 5 36 35
Surplus before income tax 14,679 13,348

Income tax (3,965) (3,988)
Adjustments relating to tax legislation changes — 70
Total income tax 10 (3,965) (3,918)
Net surplus after income tax 10,714 9,430
Other comprehensive income — —
Total other comprehensive surplus/(loss) after income tax — —
Total comprehensive surplus/(loss) after income tax 10,714 9,430
Basic earnings per share 16 $0.408 $0.359

In Thousands of New Zealand Dollars
Balance 1 July 2019 9,418 33,608 43,026
Profit/(loss) after income tax — 9,430 9,430
Other comprehensive income — — —
Total comprehensive income — 9,430 9,430
Contributions by and distributions to owners
Dividends paid during the period (refer to note 14) — (6,821) (6,821)
Balance as at 30 June 2020 9,418 36,217 45,635
Balance 1 July 2020 9,418 36,217 45,635
Profit/(loss) after income tax — 10,714 10,714
Other comprehensive income — — —
Total comprehensive income — 10,714 10,714
Contributions by and distributions to owners
Dividends paid during the period (refer to note 14) — (6,821) (6,821)
Balance as at 30 June 2021 9,418 40,110 49,528

88
2021
South Port Annual Report
06 Financials

Statement of Financial Position
OF SOUTH PORT NEW ZEALAND LIMITED AS AT 30 JUNE 2021
On behalf of the Board
Dated 27 August 2021
Chairman of DirectorsDirector
The accompanying notes form part of these financial statements
In Thousands of New Zealand Dollars 2021 2020
TOTAL EQUITY 14 49,528 45,635
NON-CURRENT ASSETS
Property, plant and equipment 11 57,218 51,189
Right-of-use assets 23 317 374
Deferred tax asset 10(d) 466 159
Total non-current assets 58,001 51,722
CURRENT ASSETS
Cash and cash equivalents 12 1,627 1,229
Trade and other receivables 13 9,045 6,460
Total current assets 10,672 7,689
Total assets 68,673 59,411
NON-CURRENT LIABILITIES
Employee entitlements 18 32 38
Deferred tax liability 10(d) — —
Loans and borrowings 17 9,000 5,000
Financial liabilities 20 234 568
Lease liabilities 23 280 333
Total non-current liabilities 9,546 5,939
CURRENT LIABILITIES
Loans and borrowings 17 — 1,500
Trade and other payables 19 6,553 3,728
Employee entitlements 18 1,418 1,321
Provision for taxation 10(c) 1,393 1,055
Financial liabilities 20 182 182
Lease liabilities 23 53 51
Total current liabilities 9,599 7,837

Total liabilities 19,145 13,776
TOTAL NET ASSETS 49,528 45,635
Net asset backing per share 16 $1.89 $1.74

NOTEGROUP
89

The accompanying notes form part of these financial statements
Statement of Cash Flows
OF SOUTH PORT NEW ZEALAND LIMITED FOR THE YEAR ENDED 30 JUNE 2021
In Thousands of New Zealand Dollars 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided by (applied to):
Receipts from customers 47,557 43,377
Payments to suppliers and employees (27,392) (25,956)
Interest received 6 11
Interest paid (358) (420)
Income taxes paid (3,934) (4,752)
Net goods and services tax paid (52) 39

Net cash flow from operating activities 24 15,827 12,299
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided by (applied to):
Proceeds from disposal of non-current assets 62 60
Acquisition of other non-current assets (11,119) (5,187)
Net cash used in investing activities (11,057) (5,127)

CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided by (applied to):
Dividend paid (6,821) (6,821)

Drawdown/(repayment) of borrowings 2,500 (500)
Lease liabilities paid (51) (48)
Net cash used in financing activities (4,372) (7,369)

NET INCREASE (DECREASE) IN CASH HELD 398 (197)
Add cash at beginning of year 1,229 1,426
TOTAL CASH AT END OF YEAR 12 1,627 1,229

NOTEGROUP
90
8184
South Port Annual Report
06 Financials

---

Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at 17 October 2019


Results for announcement to the market
Name of issuer South Port New Zealand Limited
Reporting Period 12 months to 30 June 2021
Previous Reporting Period 12 months to 30 June 2020
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$47,667 6.83%
Total Revenue $47,667 6.83%
Net profit/(loss) from
continuing operations
$10,714 13.61%
Total net profit/(loss) $10,714 13.61%
Final Dividend
Amount per Quoted Equity
Security
$0.19500000

Imputed amount per Quoted
Equity Security
$0.07583333
Record Date 01/11/2021
Dividend Payment Date 09/11/2021
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.89 $1.74
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood

Authority for this announcement
Name of person

authorised
to make this announcement
Lara Stevens – Finance Manager
Contact person for this
announcement
Lara Stevens
Contact phone number 021 108 2113
Contact email address lstevens@southport.co.nz
Date of release through MAP

27/08/2021

Audited financial statements accompany this announcement.

---

Distribution Notice

Updated as at 18 December 2019



Please note: all cash amounts in this form should be provided to 8 decimal places

Section 1: Issuer information
Name of issuer South Port New Zealand Limited
Financial product name/description Fully Paid Shares
NZX ticker code SPN
ISIN (If unknown, check on NZX
website)
NZSPNE0001S8
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies
Record date 01/11/2021
Ex-Date (one business day before the
Record Date)
29/10/2021
Payment date (and allotment date for
DRP)
09/11/2021
Total monies associated with the
distribution
1

$5,115,805.11

Source of distribution (for example,
retained earnings)
Retained Earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.27083333
Gross taxable amount
3
$0.27083333
Total cash distribution
4
$0.19500000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount $0.03441176
Section 3: Imputation credits and Resident Withholding Tax
5

Is the distribution imputed Fully imputed X
Partial imputation
No imputation

1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.

If fully or partially imputed, please
state imputation rate as % applied
6

28%
Imputation tax credits per financial
product
$0.07583333
Resident Withholding Tax per
financial product
$0.01354167
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
N/A
Start date and end date for
determining market price for DRP

Date strike price to be announced (if
not available at this time)

Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)

DRP strike price per financial product

Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms

Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
Lara Stevens – Finance Manager
Contact person for this
announcement
Lara Stevens
Contact phone number 021 108 2113
Contact email address lstevens@southport.co.nz
Date of release through MAP

27/08/2021





6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.

---

SOUTH PORT NEW ZEALAND LIMITED

27 August 2021

NZX Announcement and Media Release

SOUTH PORT NEW ZEALAND LIMITED (NZX SPN)
FULL YEAR 2021 RESULTS


Highlights Full Year ending 30 June 2021:

▪ Reported net profit after tax (NPAT) $10.71 million (+13.6%)
▪ Operating Revenue $47.33 million (+6.0%)
▪ Cargo 3.45 million tonnes (+5.5%)
▪ Final dividend 19.5 cents per share


Cargo surge and hard work lifts South Port

South Port New Zealand Limited (South Port) has achieved a record after-tax profit of
$10.71 million for the year ended 30 June 2021, which is a 13.6% increase on the
$9.43 million recorded in 2020. This result is slightly ahead of the guidance provided
in the Company’s 2021 Interim Report, released on 8 March.

“This is an extremely pleasing result in a sector that continues to face the ongoing
challenges presented by Covid-19,” said South Port Chairman, Rex Chapman.

Total cargo increased 5.5% to 3,450,000 tonnes (2020 - 3,270,000 tonnes).

“The level of profitability this year again reflects the Port’s productivity and diversified
cargo mix,” said Mr Chapman.

Operating revenue for the year was $47.33 million (FY20: $44.61 million).

Pre-tax operating profit was $14.68 million (FY20: $13.35 million).

Earnings per share were $0.408 (FY20: $0.359). Net tangible asset backing was
$1.89 (FY20: $1.74).

In setting the annual dividend, the Board takes into consideration both free cash flows
and reported profit. A higher than forecast profit this year has resulted in a decision
to lift this year’s final dividend to 19.5 cents per share (FY20 18.5cps). This results in
a full year dividend of 27 cents per share, a 4% increase on last year. Full imputation
credits will be attached to all distributions.

The dividend payment represents a gross return of 4.4% (net 3.2%), based on a share
price of $8.48 as at 30 June 2021. This results in a dividend pay-out ratio of 66% for
2021 (using reported NPAT) and equates to 63% of FCF.

P a g e | 2

After the challenges of Covid-19 in the second half of 2020, Mr Chapman noted the
financial benefits of a quick resumption in key trading activities.

“Safety continues to be our highest priority on port ahead of both productivity and
profit,” said South Port Chief Executive Nigel Gear. “This past year the performance
of the team has again been up to a high safety standard. This is a tribute to the hard
work and buy-in of all staff.”

TRADE

Bulk cargo volumes improved by 5.9% with container numbers also increasing by an
impressive 13.3% on the previous financial year.

The two major influencing factors on bulk cargo were a 54% increase in logs and a
19% increase in woodchips handled through the Port, in comparison to the previous
period.

These increases came on the back of lower cargo volumes being exported through
the Port in 2020 due to the Covid-19 Alert Level 4 lockdown.

“Nevertheless, our total log exports of 730,000 tonnes is a record for this cargo, during
a period of high demand for wood fibre worldwide and, in particular, for New Zealand
grown Radiata in China.”

“A record 53,750 TEU were handled through the Port, which is pleasing considering
we experienced an 8% reduction in container vessel calls.”

“The container supply chain worldwide is heavily congested due to the Covid-19
pandemic,” said Mr Gear.

“Several factors are in play, empty containers are stranded across the globe, there is
a shortage of labour supply due to both increased demand for goods and Covid-19.”

“Demand is extremely high due to international travel being put on hold for the
foreseeable future resulting in disposable incomes being spent on household goods
and home construction and renovation.”

Freight rates obtained by major shipping lines on the ‘East West’ trade lanes are far
exceeding the returns being achieved on the ‘North South’ routes which is another
major impediment to service reliability in New Zealand.

“These factors have resulted in irregular vessel calls to the Port creating periods of
heavy congestion in the container terminal and at times a shortage in container
supply.”

“It is expected that these current challenges in the supply chain will not change for at
least the next 18 months.”

P a g e | 3

“The warehousing operations continue to play an important role in the Port supply
chain supporting the Mediterranean Shipping Company (MSC), Capricorn Service,
calling at the Port on a weekly basis.”

“Dairy volumes increased 33% through the Port due to the construction and
commissioning of Open Country Dairy’s third dryer at Awarua.”

“Refrigerated products increased by 20% through the Port with the majority of this
volume being handled at our cold storage facility.”

Volumes continue to grow through the Intermodal Freight Centre. This facility provides
an important competitive option for our clients in Southland.


COVID-19

“Covid-19 continues to impact all aspects of our work and livelihoods and has
continued to require operational vigilance.”

“All of our front-line staff have been vaccinated, follow strict protocols and wear the
appropriate PPE when operating in this environment.”

“Although the Covid event related to the container vessel Mattina in mid-July has
caused some disruption to the Port, we are very proud of the way the team handled
the situation. Our processes established for this scenario worked extremely well. The
safety of our staff, the wider community and the crew members on board the vessel
was ensured. Our port operations continued with minimal impact.”


NEW ZEALAND’S ALUMINIUM SMELTER (NZAS)

On 14

January, NZAS announced a new four-year electricity contract with Meridian
Energy to December 2024.

“This positive announcement was a welcome relief for the region that is highly reliant
on this business for employment and economic activity,” said Mr Gear.

NZAS represents 30% of South Port’s cargo throughput and approximately 20% of net
profit (excluding the licence fee). Should NZAS close, South Port has a Licence
Agreement in place with NZAS until 2043 for the use of the Tiwai Wharf and the
associated causeway in consideration for which South Port receives an annual licence
fee.

“April 2021 marked 50 years of the NZAS operation at Tiwai Point, during which time
the two companies have enjoyed an excellent working relationship.”

“Although there is the potential that the Smelter may close in December 2024, South
Port would hope that NZAS, which produces the highest purity ‘green’ aluminium in
the world (using hydroelectricity), will continue to operate past this date and into the
future,” said Mr Gear.

P a g e | 4


Just Transitions, a division of MBIE is currently engaging with the Southland
community on how the province should transition from NZAS to new industry after
December 2024 (should the Smelter close).

“This process is important for the province as it is crucial that the electricity produced
in Southland remains in the region to help develop new industry and to grow the local
economy.”

“Two emerging opportunities are the current investigations into ‘Open Water
Aquaculture’ (developed out of the Southland Regional Development Strategy
[SoRDS]) and the opportunity of introducing large scale ‘Green Hydrogen’ production.”


INFRASTRUCTURE

2021 represents a significant milestone for South Port which is now at the peak
expenditure point in the current Asset Management Plan (AMP) established in 2016
and forecast out for 20 years to 2036.

“The higher expenditure levels incurred over the past four years have been planned
to coincide with increased cargo throughput to help manage costs and maintain
returns to our shareholders.”

Although we reached our peak maintenance expenditure in FY2021 the port is now
embarking on a significant capital expenditure programme to provide a platform for
future growth and the expectation of additional revenue.

The Port will soon take delivery of a new $10M, 65 tonne bollard pull Azimuth Tractor
Drive (ATD) tug, named ‘Rakiwai’, from Damen Song Shipyard in Vietnam.

Channel Improvement Project

The Company is currently working through the consent process to deepen the Bluff
Port channel, swinging basin and berth pockets from 9.7 metres to 10.7 metres. This
is a complex process which involves extensive consultation with stakeholders.

Provided the consent can be processed in the coming 12 months, the project will
commence in early 2023. The estimated cost of this project will be in the vicinity of
$15M to $20M.


OUTLOOK

Mr Chapman said, “for the coming 12 months we do not envisage that market
fundamentals will change significantly. We expect that the container supply chain will
not improve for the next 18 months, which will have an impact on this sector of the
business.”

P a g e | 5

“Bulk cargoes, however, are expected to be consistent and remain the backbone of
the Company’s business.”

“Peak maintenance expenditure was achieved in FY2021, and the port is now
embarking on a capital expenditure programme that will provide for future growth.”

“The Southland region is working hard to establish new industry in aquaculture and
potentially green hydrogen, in both of which the Port will have a significant role to play
in the future.”

South Port estimates that earnings in FY22 are likely to remain consistent with FY21
reported earnings.

“On the basis of this consistent earnings profile and in the absence of any unforeseen
circumstances, the Directors will be endeavouring to maintain the increased level of
dividend for the FY22 year.”



ENDS


FOR FURTHER INFORMATION PLEASE CONTACT:

Mr Nigel Gear
Chief Executive
South Port New Zealand Ltd
Tel: 0274 94 33 22
Email: ngear@southport.co.nz

Mr Rex Chapman
Chairman
Mobile: 027 454 8455
Email: rex.chapman@cplaw.co.nz