Capex more than doubled to 48.1% of revenue, swinging FCF to -$9.7m

Capex rose 110.8% to $23.4m, taking capex to 48.1% of revenue from 23.5%, and free cash flow pre-lease swung from +$4.7m to -$9.7m. To fund this, gross borrowings increased from $9.0m to $25.5m, with net debt rising from $7.4m to $24.2m.

Trading was steadier. Revenue rose 2.7% to $48.6m, profit before tax rose 17.0% to $17.2m, and reported NPAT rose 19.6% to $12.8m, helped by the effective tax rate easing from 27.0% to 25.2%. Operating cash flow fell 13.5% to $13.7m despite higher PBT.

Capex of $23.4m exceeded operating cash flow of $13.7m by roughly $9.7m, and that gap was funded by debt rather than reserves. Net debt nearly tripled to $24.2m and total liabilities rose 71.6% to $32.9m. This matters because South Port has moved from a near-debt-free position to one where future returns now need to clear a meaningfully larger interest and amortisation burden.

The headline NPAT growth is partly tax-driven. PBT growth of 17.0% is the cleaner operating read; NPAT growth of 19.6% benefited from the effective tax rate falling 1.8 percentage points to 25.2%. Underlying earnings are still up, but by less than the 19.6% headline implies.

Dividend policy was held on a full-year basis. The full-year dividend was maintained at 27.0 cents per share against the prior 27.0 cents, with the announced final of 19.5 cents being only the FY22 final component. The full-year payout ratio against NPAT eased to 55.2% from 66.2%, but on FCF pre-lease the distribution was not covered this year because FCF was negative.

Seasonality context is limited: HY22 contributed 48% of full-year revenue and 45.7% of full-year NPAT, indicating a modestly second-half-weighted year rather than a strong shape signal.

Because no forward bulk-cargo or container volume outlook accompanies the canonical figures here, the result on its own does not support a view on whether the heavier capex base is a one-year event or the start of a multi-year build. That ambiguity is the central planning question this release leaves open.

PBT of $17.2m on revenue of $48.6m is the cleanest read and is up 17.0% on prior, with ROE strengthening to 23.2% from 21.6%. That said, NPAT growth is flattered by the lower effective tax rate, so investors should anchor on the PBT trajectory rather than the 19.6% NPAT figure when judging operating performance.

Cash quality is the weaker side of the result. Operating cash flow fell 13.5% even as PBT rose 17.0%, and after capex, FCF pre-lease was -$9.7m versus +$4.7m last year — an FCF-to-NPAT ratio of -75.4%. The dividend was therefore funded with debt rather than current-year cash generation. The trade receivables line moved very sharply (from $6.2m to a negligible balance), which has materially distorted receivable days; without management commentary in the supplied excerpts on that movement, its durability and accounting basis cannot be confirmed from this release.

This briefing cannot assess port volume mix, customer concentration, or the underlying drivers of the receivables movement, because none of those are quantified in the supplied canonical or excerpt data.