Our Shareholders
Commercial success is critically important to the Port as it provides a return for our shareholders investment and delivers a strong dividend to our community.
The Port’s current level of economic performance, measured by return on assets and return on equity, does not give shareholders a fair return on their investment. To sustain strong dividends to our community and investment in infrastructure into the future, the level of economic performance needs to improve. To this end, work is underway to review the Port’s economic model.
The Port looks to sustain and modernise its infrastructure by completing an Infrastructure Masterplan to ensure optimal investment and resilience for the Port’s infrastructure and assets into 2050.
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Goal
Deliver strong and sustained returns to our shareholders
2030 Plan
Strategy 1
A fair and sustained return
Lift our economic profit to provide a fair return to shareholders and build resilient infrastructure
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Our shareholders deservedly expect a sustained and commercial return on their Port investment.
Current levels of financial performance are insufficient to fund the future Port developmental goals, whether these are tangible or intangible goals.
Using economic profit as the core metric, this strategy is aimed at achieving an economic profit that grows shareholder wealth and improves financial performance. In addition, investment in the Port’s infrastructure needs to be optimsed and fit for purpose over the life of the asset. The Port Infrastructure Masterplan is a key guide in this decision making.
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Complete and implement economic profitability strategy that will realise a sustained upward growth trend
Implement Infrastructure and Property Master plan
An asset management plan to optimise infrastructure investment and provide resilience
Electrical infrastructure master plan to ensure port remains operational post any natural disaster and could address the increased electricity demand due to electrification of mobile assets
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Sustained positive economic profit result
RoCE – >5.5% by FY25
Complete infrastructure master plan and include opportunities in annual plans.
Complete asset management plan by end 2023
Complete electrical infrastructure plan by end 23FY and address items as per action plan
Strategy 2
Diversified income
Strengthen returns from our property portfolio and leverage our expertise in logistics for growth
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A challenge Port Nelson faces is cargo unpredictability. The success of Port Nelson’s property portfolio is critical to providing risk diversification for the business. This strategy is aimed at achieving investment property yields that reflect the highest and best use of current Port property investments, at the same time recognising the scarcity of land, in particular, land situated on the port and the changing needs of users. This strategy considers increasing the Port’s exposure to property investment to provide further profit stability. Further the strategy supports the growth of our logistics business, QuayConnect, to leverage its expertise outside of logistic lines related solely to Te Tauihi and to find profitable revenue streams diversified from Te Tauihu imports and exports
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Complete and implement economic profitability strategy that will realise a sustained upward growth trend
Implement Infrastructure and Property Master plan
An asset management plan to optimise infrastructure investment and provide resilience.
Electrical infrastructure master plan to ensure port remains operational post any natural disaster and could address the increased electricity demand due to electrification of mobile assets
-
Sustained positive economic profit result
RoCE – >5.5% by FY25
Complete infrastructure master plan and include opportunities in annual plans.
Complete asset management plan by end 2023
Complete electrical infrastructure plan by end 23FY and address items as per action plan
Challenges
1. Shareholder wealth
Low economic profit performance
Significant infrastructure renewal investment required – replacement, sustainability and climate resilience and implementation of port master plan
2. Property
Low property returns
Long-dated leases, including perpetual leases
Material property leases expiring in the next ten years
Port land intensification
3. Climate Resilience
Investment requirements to mitigate risk from climate change.
2024 Plan
2024 Strategic Initiatives
Shareholders
Aligned with the 2030 plan. The Port will pursue 3 strategic initiatives under ‘Shareholders’ in 2024FY.
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Move forward on revenue improvement initiatives in conjunction with strong customer communications, as well as pursue identified cost savings and areas of continuous improvement that lift profit.
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Complete the slipway redevelopment to budget and programme, as well as establish operational systems that are safe, customer facing and efficient.
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Ensure our team and stakeholders are engaged in final consultation on the plan and the early actions are effectively planned.
2024 Challenges
Ongoing cost increases: With insurance increases at the top, a number of our costs are likely to move at rates at or above CPI.
Increasing charges in a competitive environment: The consequences of increasing charges to achieve fair returns needs to be done with good knowledge of potential consequences.
Sustaining a fit-for-purpose technology platform: The Port maintains a cluster of software packages, many of which are either end-of-life or at key transition points. In addition, cyber security is an ever-present risk. Prioritisation and effective investment are challenges.
Optimised timing for infrastructure investment: The desire to maximise the life of our assets while providing optimal resilience in terms of service and to natural events.
