South Port forecasts further disruption in supply chain

SOUTH PORT NEW ZEALAND LIMITED

NZX Announcement and Media Release

SOUTH PORT HALF YEAR 2022 RESULTS

8 February 2022



South Port forecasts further disruption in supply chain

Net earnings by South Port New Zealand Limited (South Port) have held up relatively
well in the opening half-year, despite significant disruption in the supply chain and
uncertainty created by the pandemic.

South Port’s revenue for the first six months to 31 December 2021 was $23.3 million
(1H21 $23.4 million).

Net profit after tax was $5.9 million (FY2021 $6.1 million).

Container volumes, however, were negatively impacted, showing a 23% decline for
the half-year.

Bulk cargo volumes were consistent with the previous financial period and in line
with expectations, however are expected to decline in the second six months due to
reduced demand in the Chinese log market.

Total cargo activity was 1,745,000 tonnes compared with 1,720,000 tonnes in the
prior year interim period, representing an increase in cargo flows of 25,000 tonnes or
1.5%.

Factors impacting this interim result included:

▪ The log market is currently in a downward cycle due to decreased demand
and high inventory levels in the Chinese market. It is expected that this
market dynamic will improve in the coming months.
▪ International container supply chains continue to be significantly disrupted as
a result of the ongoing COVID-19 pandemic.
▪ Cold storage volumes declined due to a reduction in meat storage and fish
vessels calling at the port
▪ There were increased stock food volumes imported into the Southland region
to service the dairy industry.

“Disruption in the container supply chain is a worldwide phenomenon which has
reached all corners of the globe, including South Port, impacting both volumes of
cargo and the number of ships calling at the Port,” said the Chairman, Mr Rex
Chapman.

Nevertheless, South Port Directors have declared a steady fully imputed interim
dividend of 7.50 cents per share (2021 – 7.50 cents) payable on 8 March 2022.

Cargo

South Port Chief Executive, Nigel Gear said, “increases in cargo were recorded in
stock food (+41,000 tonnes) and aluminium (+28,000 tonnes); however, other bulk
cargoes were negatively impacted with logs (-29,000 tonnes) in comparison to the
prior half-year.”

“Containerised cargo decreased 23% to 20,800 TEU (FY2021 27,000 TEU). The
main decreases were reflected in forestry and fertiliser products.”

“Container vessels transiting the Port were down 32% on the same period last year,
at 17 calls (FY2021 25 calls).”

Operations

The Port’s dairy warehousing operations continue to operate well, handling similar if
not increased volumes of cargo through these facilities.

Cold Storage however has been impacted by a reduction in deep sea fishing vessels
calling to the port and meat stored from local processors.

The New Zealand Aluminium Smelter (NZAS) is operating on an Electricity Supply
Agreement through to 31 December 2O24. Meridian Energy and Contact Energy
are now investigating the establishment of largescale green hydrogen opportunities
in the region to make use of the electricity resources from 1 January 2025, should
the Smelter close.

“South Port, while supporting the work being carried out by the electricity companies,
believes that there is the capacity to support both NZAS and the establishment of a
hydrogen plant in the region post-2024,” noted Mr Gear.

Capital Works

A significant part of the current Kia Whakaū project is the capital dredging of the
entrance channel, swinging basin and berth pockets. South Port has applied for a
resource consent to dredge and remove seabed materials up to 160,000 m
3
of both
soft sediment and rock.

The Port’s new 65 tonne bollard pull Azimuth Tractor Drive (ATD) tug, the Rakiwai,
which was built in Damen Song Shipyards in Vietnam at the cost of $10 million, will
be operational in March 2022.

Mr Gear said, “excellent progress is being made on the upgrade to the Town Wharf
which services the petroleum import activity for Southland and the Wakatipu Basin.”

“The installation of the Impressed Current Cathodic Protection (ICCP) system on the
Port’s Access Bridge is also making good progress.”

Outlook

“The COVID-19 pandemic continues to create uncertainty in the marketplace and to
provide challenges to our business operations,” said Mr Chapman.

“Containerised activity will continue to be impacted by the disruption in the supply
chain which is not expected to improve until 2023 at the earliest.”

“The outlook for export log markets is expected to remain subdued until at least the
second quarter of 2022, post-Chinese New Year, however other bulk cargoes are
expected to hold up well during this time.”

Based on all known factors at the date of releasing its 2022 interim result, South Port
estimates that its full year earnings should fall in the range of $9.70 million to $10.00
million (FY2021 - $10.71 million).

Last year’s record profit of $10.71M resulted in an increased full year dividend of 27
cents per share. In the event that the Company’s FY2022 year-end profit falls within
the forecast range then it is expected that the full year dividend payment will be
maintained at 27 cents per share.

ENDS


FOR FURTHER INFORMATION PLEASE CONTACT:


Mr Nigel Gear
Chief Executive
South Port New Zealand Ltd
Tel: (03) 212 8159
Email: ngear@southport.co.nz

Mr Rex Chapman
Chairman
South Port New Zealand Ltd
Mobile: 027 454 8455
Email: rex.chapman@cplaw.co.nz


MEDIA:

Warren Head
Head Consultants Ltd
Mobile: 021 340 650
Email: headconsultants@xtra.co.nz

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Financial Statements
Statement of Comprehensive Income
SIX MONTH PERIOD ENDED
31 DECEMBER 2021
Total operating revenues
from port services 23,342 23,384 47,291
Total operating expenses (12,802) (12,849) (28,447)
Gross profit 10,540 10,535 18,844

Administrative expenses (2,337) (2,045) (4,174)
Operating profit before
financing costs 8,203 8,490 14,670

Financial income 609 111 340
Financial expenses (468) (183) (367)
Net financing costs 141 (72) (27)
Other income 10 29 36
Surplus before income tax 8,354 8,447 14,679
Income tax (2,490) (2,382) (3,965)
Adjustments relating to tax
legistlation changes – – –
Net surplus after income tax 5,864 6,065 10,714
Other comprehensive income – – –
Total comprehensive
surplus/(loss) after income tax 5,864 6,065 10,714
Basic earnings per share $0.224 $0.231 $0.408
Statement of Cash Flows
SIX MONTH PERIOD ENDED
31 DECEMBER 2021
Cash flows from operating
(note 6) 5,002 5,622 15,827
Cash flows from investing (15,625) (4,464) (11,057)
Cash flows from financing 10,858 (379) (4,372)
235 779 (398)

31/12
2020
$000’s
31/12
2021
$000’s
Year to
30/06/21
$000’s
31/12
2020
$000’s
31/12
2021
$000’s
Year to
30/06/21
$000’s
UnauditedUnauditedAudited
UnauditedUnauditedAudited
Statement of Financial Position
SIX MONTH PERIOD ENDED
31 DECEMBER 2021
TOTAL EQUITY 50,276 46,847 49,528
Non-Current Assets
Property, plant & equipment 72,399 53,612 57,218
Right-of-use assets 289 346 317
Deferred tax asset 397 235 466
Financial assets 190 – –
Total non-current assets 73,275 54,193 58,001
Current Assets
Cash and cash equivalents 1,862 2,008 1,627
Trade and other receivables 6,534 8,559 9,045

Total current assets 8,396 10,567 10,672
Total assets 81,671 64,760 68,673
Non-Current Liabilities
Employee entitlements 38 31 32
Loans and borrowings 25,000 11,000 9,000
Financial liabilities – 639 234
Lease liabilities 252 307 280
Total non-current liabilities 25,290 11,977 9,546
Current Liabilities
Trade and other payables 3,692 3,732 6,553
Employee entitlements 1,461 1,347 1,418
Provision for taxation 897 805 1,393
Financial liabilities – – 182
Lease liabilities 55 52 53

Total current liabilities 6,105 5,936 9,599

Total liabilities 31,395 17,913 19,145
TOTAL NET ASSETS 50,276 46,847 49,528

Net asset backing per share $1.92 $1.79 $1.89
31/12
2020
$000’s
31/12
2021
$000’s
Year to
30/06/21
$000’s
UnauditedUnauditedAudited
NET INCREASE/(DECREASE)
IN CASH

Net cash provided by operating
activities
Notes to the Financial Statements
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2021
Total equity at beginning
of the period 49,528 45,635 45,635
Profit/(loss) after income tax 5,864 6,065 10,714
Other comprehensive income – – –
Total comprehensive surplus 5,864 6,065 10,714
Distributions to shareholders (5,116) (4,853) (6,821)
Total equity at end of the period 50,276 46,847 49,528
31/12
2020
$000’s
31/12
2021
$000’s
Year to
30/06/21
$000’s
UnauditedUnauditedAudited
5 Statement of Changes In Equity
SIX MONTH PERIOD ENDED
31 DECEMBER 2021
Surplus after taxation 5,864 6,065 10,714
Add/(less) items classified
as investing/financing activities – – –
Add/(less) non-cash items 1,515 1,883 3,474
Add/(less) movement in working
capital (2,377) (2,326) 1,639

5,002 5,622 15,827

6 Net Cash Flow from Operating Activities
1 Activities of South Port Group
The Group is primarily involved in providing and
managing port and warehousing services.
2 Accounting Policies
The Group is a Financial Markets Conduct (FMC)
reporting entity for the purposes of the Financial
Reporting Act 2013 and the Financial Markets Conduct
Act 2013. These financial statements comply with these
Acts and have been prepared in accordance with the
New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS) and other applicable
Financial Reporting Standards, as appropriate for profit-
orientated entities. These financial statements comply
with International Financial Reporting Standards (IFRS).
There has been no change in accounting policies. All
policies have been applied on a consistent basis with the
most recent annual report.
3 Taxation
Income tax expense comprises current and deferred tax
at the company tax rate of 28%. Income tax expense is
recognised in the Statement of Comprehensive Income
except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
4 Segmental Reporting
The South Port Group operates in the Port Industry in
Southland, New Zealand, and therefore only has one
reportable segment and one geographical area based
on the information as reported to the chief operating
decision maker on a regular basis. South Port engaged
with one major customer who contributed individually
greater than 10% of its total revenue for the period ended
31 December 2021. This customer contributed
$4.41 million for the six months ended 31 December 2021
(2020: $5.68 million).

Parent Company
South Port New Zealand
Limited
Subsidiary
Awarua Holdings Limited
Group Companies
Nigel Gear
Chief Executive
Geoff Finnerty
Port General Manager
Jamie May
Business Development Manager
Hayden Mikkelsen
Container Manager
Frank O’Boyle
Infrastructure Manager
Lara Stevens
Finance Manager
Murray Wood
Warehousing Manager
Helen Young
Human Resources Manager
Corporate Executives
Rex Chapman
Chairman
Philip Cory-Wright
Nicola Greer
Michelle Henderson
Clare Kearney
Jeremy McClean
Directors

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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
ISIN (If unknown, check on NZX
website)
NZSPNE0001S8
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year Quarterly
Half Year X Special
DRP applies
Record date 23/02/2022
Ex-Date (one business day before the
Record Date)
22/02/2022
Payment date (and allotment date for
DRP)
08/03/2022
Total monies associated with the
distribution
1

$1,967,617.35

Source of distribution (for example,
retained earnings)
Retained Earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.10416667
Gross taxable amount
3
$0.10416667
Total cash distribution
4
$0.07500000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount $0.01323529
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
$0.02916667
Resident Withholding Tax per
financial product
$0.00520833
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

08/02/2022





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

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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 6 months to 31 December 2021
Previous Reporting Period 6 months to 31 December 2020
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$23,342 -0.2%
Total Revenue $23,413 -0.3%
Net profit/(loss) from
continuing operations
$5,864 -3.3%
Total net profit/(loss) $5,864 -3.3%
Final Dividend
Amount per Quoted Equity
Security
$0.07500000

Imputed amount per Quoted
Equity Security
$0.02916667
Record Date 23/02/2022
Dividend Payment Date 08/03/2022
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.92 $1.79
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

08/02/2022

Unaudited financial statements accompany this announcement.