Appendix 4D
Half yearly report
Rules 4.2A
Appendix 4D | |||||||||
Half yearly results | |||||||||
Name of entity | |||||||||
Steamships Trading Company Limited | |||||||||
ARBN | Half year ended ('current period') | ||||||||
055836952 | 30 June 2020 | ||||||||
Results for announcement to the market− | |||||||||
K'000 | |||||||||
Revenues from ordinary operations | Up/Down | 8% | T | 261,722 | |||||
Profit (loss) from ordinary operations after tax | Up/Down | 109% | T | 16,601 | |||||
Profit (loss) attributable to members | Up/Down | 47% | T | 16,079 | |||||
Dividends (distributions) | Amount per security | Franked amount per | |||||||
security | |||||||||
Final Dividend - 2019 | 55t | 0t | |||||||
Interim Dividend - 2020 | 0t | 0t | |||||||
Record date for determining entitlements to the dividend,
Not Applicable
Refer Pages 3 and 4 for commentary
This report is to be read in conjunction with the most recent annual financial report
Appendix 4D Page 1
Appendix 4D
Half yearly report
Directors Report
The directors present their report together with the condensed consolidated financial statements for the half-year ended 30 June 2020.
Directors:
The directors of the company during or since the end of the half-year are:
G.L. Cundle | Chairman since 2015 |
Chairman | |
G Aopi, CBE | Director since 1997 |
R.P.N. Bray | Director since 2018 |
L.M. Bromley | Director since 2019 |
Sir M.R. Bromley, KBE | Director since 2000 |
D.H. Cox OL, OBE | Director since 2004 |
G.J. Dunlop | Director since 1995 |
Lady W.T. Kamit, CBE | Director since 2005 |
M.R. Scantlebury | Managing Director since 2018 |
J.B. Rae Smith | Director since 2019 |
J.H. Woodrow | Director since 2015 |
Appendix 4D Page 2
Appendix 4D
Half yearly report
Commentary
Half Year Report to the Stock Exchange
The Directors of Steamships Trading Company Limited (Steamships) announce an unaudited profit after tax and minority interests of K16.1 million for the 6 months to June 2020, an increase of 47% over the same period in 2019. However, adjusting for significant items (which are considered non-recurring in nature) the underlying profit attributable to shareholders is K16.4m, an increase of 12% over the same period in 2019.
2020 | 2019 | Change | |
K000's | K000's | ||
Net profit attributable to shareholders | 16,079 | 10,913 | 47.3% |
Add back / (less) impact of significant items (post tax & minority interest) | |||
Tax Loss Write Off | - | 4,727 | |
Fixed Assets Write Off | 354 | - | |
Gain on Disposal of Property | - | (1,603) | |
Loss on Disposal of Vessels | - | 622 | |
Total impact of significant items | 354 | 3,746 | |
Underlying profit attributable to shareholders | 16,433 | 14,659 | 12.1% |
The period's results are heavily impacted by the global Covid-19 pandemic and the initial 14 day State of Emergency in PNG in March 2020, with many restrictions continuing or reintroduced recently. Revenue from ordinary operations decreased 8% to K262m compared to the same period last year. Cost saving measures were implemented across all businesses resulting in a slight improvement in underlying profit. In addition, the underlying economy still remains weak from 2019. The disputed closure of the Porgera gold mine in April, and no indication of any progress on the other major new resource projects, is increasing concern that this economic malaise will persist and deepen with the impact of Covid-19 restrictions. Steamships' results have been relatively resilient as the businesses adapt to this tough new environment.
The charge for depreciation for the year to date of K43.7 million compares to K39.8 million in the same period in 2019 (excluding impairments). Capital investment however decreased for the six months, being K38 million against K59 million in 2019, as certain planned discretionary expenditure was either postponed or cancelled in light of the impact of Covid-19. The group's net operating cash flow generation increased to K67.3 million up from K28.3 million in 2019 and the group has K109.7 million cash and term deposits at 30th June 2020 (K100.4 million in 2019).
In light of the uncertainty over the extent of damage Covid-19 will cause to the PNG economy, and Steamships results in 2020, no interim dividend has been declared.
Logistics
The ten entities that comprise the joint venture stevedore companies (including four which have transferred management from the Consort group during 2019) reported a solid first half performance despite the difficult trading environment. The equipment hiring business is starting to gain more traction and customer recognition, with results on an upward trend.
East West Transport reported a decline in revenue for the period as volumes fell, particularly fuel haulage. New business has been won and the development of depot management services is encouraging. Costs are being well managed. The outlook remains positive for a satisfactory result by year end.
Appendix 4D Page 3
Appendix 4D
Half yearly report
Consort Express Lines continues to build capability to deliver enhanced customer service across its business. Schedule and fleet reliability is higher and more stable than prior years. Coastal liner cargo volume fell sharply in April with the first Covid-19 lockdown in PNG but has largely recovered. The projects & charters business has been inconsistent with some large customers seeing their operations adversely impacted by Covid-19, but overall activity has been satisfactory.
Pacific Towing reports stable revenue from its core towage activities (both within PNG harbours and in blue water) but a lack of salvage work in the region has reduced the overall result compared to last year.
Property & Hotels
Pacific Palms Property reported slightly higher revenue for the period to June as overall occupancy improved despite a weaker rental market. Covid-19 has affected the demand for Port Moresby residential units but the breadth of high quality product across the portfolio has minimised this impact. Construction of the mixed use Harbourside South continues with a projected completion in mid-2022.
Coral Sea Hotels experienced a quiet start to the year and has suffered significantly since the outbreak of Covid-19 as both international and domestic travel were heavily restricted and conferences largely cancelled. Two hotels were closed temporarily. The Ela Beach Hotel will reopen with a renovated and improved Food
- Beverage offering. Management have reduced costs significantly. Demand has returned in July but continuing uncertainly is likely to exist for the remainder of the year as the pandemic plays out.
Investments
Colgate Palmolive, a PNG joint venture, reported a reduction in volumes and revenue compared to the same period last year. The Oral and Home care categories demonstrated growth despite limitations on distribution due to provincial border closures. The outlook remains positive as underlying demand is evident.
Trading outlook
The underlying economic weakness of the PNG economy is being further undermined by the contentious closure of the Porgera gold mine following the expiry of the mining lease and the continuing uncertainty around progress of three major resource development projects; P'nyang, Papua LNG and Wafi Golpu. This combined with Covid-19, is likely to result in a negative GDP growth for the year and ongoing uncertainty for 2021. Steamships is adapting to meet the changing demands in the economy and positioning its businesses for a medium term economic recovery.
Subsequent to 30 June 2020 the Group has successfully negotiated the rollover of its existing financing arrangements with its Bankers.
Appendix 4D Page 4
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Steamships Trading Company Limited published this content on 28 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 August 2020 06:02:08 UTC